New publication on accounting for internal-use software costs

Our Financial Reporting Insights (FRI), FASB modernizes the accounting for internal-use software costs, explains the requirements of the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU modernizes the accounting for internal-use software costs to reflect the evolution of software development practices and address stakeholder concerns about the operability and relevance of existing guidance.

Our publication addresses the key amendments in ASU 2025-06, including the new capitalization threshold and the evaluation of whether significant development uncertainty exists.