Definition: Gross investment in software

Category:

Software is defined (by the OECD) as the mandatory set of instructions for digital instrument operations. These comprise: system software, tools software, application software. For practical purposes it is proposed to include in investment the expenditure on the purchase of both packaged and customised software, including license payments for the use of software, as well as software produced in-house. The latter should be valued at production cost and only included if its useful life is at least one year. Systems software and other bundled software which is invoiced with hardware is excluded and is assumed to be included in the tangible investment figures.

Sometimes, but less frequently, investment in software entails the creation of licences. These licences are recorded as fixed assets.