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Software Development Costs (Notes)

3 Months Ended

Mar. 31, 2020

Research and Development [Abstract]

Research, Development, and Computer Software Disclosure [Text Block]

SOFTWARE DEVELOPMENT COSTS

Software development costs consists of the following:

	March 31, 2020				December 31, 2019
Software development costs	$	2,724,021			$	2,673,017
Less accumulated amortization	(1,253,687		)		(1,153,037		)
Software development costs, net	$	1,470,334			$	1,519,980

The Company developed its web-based advertising and content exchange platform, IZEAx, to enable native advertising campaigns on a greater scale. The Company continues to add new features and additional functionality to IZEAx to facilitate the contracting, workflow, and delivery of direct content as well as provide for invoicing, collaborating, and direct payments for the Company’s self-service customers. The Company capitalized software development costs of $51,004 and $346,789 during the three months ended March 31, 2020 and 2019, respectively. As a result, the Company has capitalized a total of $2,724,021 in direct materials, consulting, payroll and benefit costs to its internal use software development costs in the consolidated balance sheet as of March 31, 2020.

The Company amortizes its software development costs, commencing upon initial release of the software or additional features, on a straight-line basis over the estimated useful life of five years, which is consistent with the amount of time its legacy platforms were in service. Amortization expense on software development costs that is presented separately from cost of revenue and recorded in depreciation and amortization expense in the accompanying consolidated statements of operations was $100,650 and $74,842 for the three months ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, future estimated amortization expense related to software development costs is set forth in the following schedule:

	Software Development Amortization Expense
Remainder of 2020	$	304,039
2021	393,283
2022	337,916
2023	297,127
2024	115,206
Thereafter	22,763
Total	$	1,470,334

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- References

No definition available.

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- Definition

The entire disclosure for research, development, and computer software activities, including contracts and arrangements to be performed for others and with federal government. Includes costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility and in-process research and development acquired in a business combination consummated during the period.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 985
-SubTopic 730
-URI http://asc.fasb.org/subtopic&trid=2197926

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