Software Cost Policies: All Together Now!: Until March 4, 1998, there's never been a published generally accepted accounting principle governing the treatment of software expenditures for running a firm's business. On that date, the Accounting Standards Executive Committee of the American Institute of CPAs released its Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." The lack of a standard in this area led to various practices: some firms capitalized the costs of developing the software used to run their business, others treated such costs as period costs, while others capitalized costs paid to outside developers but expensed the costs linked to their own employees. Needless to say, when the software development programs represent major investments, there's no comparability of balance sheets and income statements between companies with differing policies. The new standard will go a long way toward standardizing the policies of American companies - but until the standard is adopted by all companies, some analytical pitfalls remain at quarterly earnings release time. Early adopters of this standard may gain a competitive edge in the great "quarterly earnings expectations derby".