I think the obvious implication is that software development is expensive, ongoing and tends to result in relatively short term ROI, and therefore the amortization schedule of 5 years increases the likelihood smaller business will never collect most of it, while larger business that can absorb more up-front costs will be able to collect it pretty easily.

That is not an argument for tax treatment of whether something is an asset

I wasn’t trying to make that argument, but I were I would argue that software itself is more like a liability, or, at the most, a current asset[0]. Source code has no inherent value, and in fact the more you have the more expensive it is.

[0] https://www.investopedia.com/terms/c/currentassets.asp

That interpretation is deeply removed from how accounting works, but even if it were a current asset it would still not be an expense

Yeah, I agree it doesn’t fit well in any of the usual accounting boxes. But I think that’s the point, right?

Building tools or products is clearly an investment

Because most software devs don’t stick around long enough to write software that can stand the test of time. It requires a few things: like don’t use libraries unless they are well funded (includes frameworks) or have already stood the test of time (like bootstrap for the FE or React, etc); don’t hide logic deep in the code, put logic as high level as possible (like in controllers, which is the exact opposite of short-lived software; and many other little things.

I have several projects running in prod, at several companies, for over a decade. They are easy to maintain, easy to extend and build on, and easy to understand.

You can be changing the code every day and it’s still the same asset yhough

Because the world changes.