Since intangibles are almost always considered a flat out deduction (as opposed to depreciation) when you have the choice of expensing it or amortizing it over time, the cost of each "improvement" (for lack of a better word) is treated on it's own merits as it's own stand alone entity, but only to a degree.
For example, if you amortized the base product (I use the word "product" because I can't think of any other way to describe an intangible asset at this time) then it's generally expected any future additions, enhancements or upgrades to that produce will also be amortized. Now I've not looked at the detail in the IRS pubs myself. But I would think the IRS would have issues with you amortizing some aspects of the base asset, while expensing other parts. So if you start out expensing, I would suggest you keep improvements the same.
To decide which is best for the long term (and I reiterate "long term") you have to look at the current, as well as the impact on the current and projected impact on the future projected tax liability. Some discussion on this follows.
If the business has the taxable income from which to expense it, then expense it. But don't just take that comment at face value. While expensing it the first year can get your taxable business income to zero with any excess carried over to the next year, if the excess carried over won't lower your tax bracket that next year, then amortization "may" be the better way to go over the long term.
If the business does not have the taxable income from which to expense it, then amortize it and deduct it over 5 or 7 years (Can't recall the schedule for software).
Another consideration too, is that if amortizing it over a number of years has the potential to bump you into a lower tax bracket for one or more of those years (excluding the first year) then by all means, amortize.
You may need to work this through the program to give you more accurate data to work with for your future predictions of tax liability down the road, so you can make a more educated decision on what you believe is best at this time.
