So you're saying that the advice you got was that if it's a launched product, you can treat software development as an operating expense and just ignore the fact that 174 says software development is an R&E expense?

I mean that sounds great to me...I just also feel like it's probably a very "liberal" interpretation indeed.

The part I'm getting hung up on is essentially, previously R&E expenses (as you note) were a lot more fungible, it depended on a number of factors including how risky the endeavor was. Things that you just do day-to-day in the service of keeping your company afloat (which for a launched SaaS for example would include fixing bugs or even developing basic features) were likely not R&E. Maybe if you embarked on a journey to develop a totally new product, it would have been.

It seems like the most basic reading of this is pretty straightforward: they've taken that decision making away and said "if it's software dev, it's R&E." Not "if it's software dev for a new feature, but hey existing bug fixes and maintenance don't count," just, "software is R&E now always."

Obviously everyone has their own risk tolerance for how they interpret things and what definition they use.