Final answer:
Costs incurred after technological feasibility is established should be capitalized as an intangible asset, representing an investment in software that can provide future economic benefits. These costs are amortized over the useful life of the software once it is available to customers.
Step-by-step explanation:
The costs incurred after technological feasibility is established but before the software is available to customers should be capitalized as an intangible asset. This is because these costs are essential for bringing the software to market, and as such, they provide future economic benefits through the generation of sales. Capitalizing these costs aligns with accounting principles, which allow for the deferral of certain costs that can be directly linked to the development of an asset that will provide future economic benefit. Once the software is available for general release, the capitalized costs are then amortized over its useful life.
In the context of financial decision-making, firms must consider the raising of financial capital to fund their ventures, especially during the early stages. They might opt to use early-stage investors, reinvest profits, borrow through banks or bonds, or sell stock. Initial investments in technology or software development are critical as they can provide a substantial competitive advantage and future returns, further emphasizing the necessity to capitalize these costs.