An accounting model proposal of software cost according to Turkish accounting standards

Software is the main source of incomes of IT companies. The relationship of these companies with the software collected in two main categories. There are two sub-groups in each main category. The main categories are: Production for sales and acquire for use. Software development processes occur and produce product when sale of software is purposed. This production can be for special order or responding to general needs (package program). Therefore there are two different situation although the processes are the same. Therefore accounting records will also be different. Business has two options for the acquisition of software. First is to buy from market; second is make own production. Here the same purpose is intended, but processes is different. Therefore accounting records will be very different.IT companies need to use other software while producing software. Thus, IT companies may take parts for above 4 processes. There are worth-analyzing companies in terms of market value which are producing software that are trading on Turkey and International Stock Markets. These companies present annual financial reports. Therefore TMS-11, TMS-18 and TMS-38 standard were analyzed. Especially TMS is not clear about how to report for producing software. Therefore different standards (US-GAAP) were examined. Related issues with software purchasing, producing, capitalizing, selling on contract and revenues were researched. A model development is made about outcomes of the project management system that needs to record the above transactions. Accordingly, the accounting is done with detailed scenarios. In the meantime, it is proposed some new account name with reasons for Turkey practice. Some companies in International and Turkey stock market have been examined. Model in this study was compared with reports and disclosure of companies. At the same time results which subject to different standards (US-GAAP) could be followed.