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This excerpt taken from the WBMD 8-K filed Nov 21, 2006. Product
Development
Costs incurred in the classification and organization of
listings and information within the Company’s website and
the development of new products and enhancements to original
products are charged to expense as incurred. The Company
accounts for product development costs under
SOP 98-1,
“Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use”
(“SOP 98-1”).
Development costs relate to costs that are incurred for the
development of project plans and for ongoing updates to the
website graphics. During the six months ended June 30, 2006
and the year ended December 31, 2005, the Company
capitalized approximately $498,000 (unaudited) and $970,000,
respectively, of product development costs under
SOP 98-1
that were incurred for the development of new products and the
development of added functionality to existing products. The
capitalized costs are being amortized over their estimated
useful lives, which have been determined by management to be two
to three years.
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