Accounting Policy Choice 15th July 2015 Product Development Costs: CapEx or OpEx ? Nowadays there are very few areas where accounting standards give you a big choice over what accounting treatment you can adopt. The costs of developing a new product (once it has passed its research phase) are one such area. Tech companies have the choice of accounting treatment – expense as operating costs (OpEx) to P&L, or capitalise (CapEx) to balance sheet and amortise over its predicted useful economic life. Factors to consider: Accountability, How bad you are prepared for the P&L to look, Balance sheet strength (including credit rating), Maintaining distributable reserves, Industry norms. If you are in a dilemma, why not talk it through with us.