An internal workflow platform and a product sold to customers can share code, developers, and cloud infrastructure while following different accounting models. Write the software's purpose and delivery facts before classifying a single labor hour.
The scope file should identify who uses the software, whether it is marketed, whether customers receive a license or a service, what project or component is being analyzed, and which entity controls the resulting resource. A later plan to market the product, dual-purpose development, or a hosting arrangement can require additional research.
Once internal-use scope is supported, the cost schedule still needs a period and adoption status. Current Subtopic 350-40 and ASU 2025-06 pending content do not share the same capitalization trigger.
Apply the distinction
An employee scheduling system can share developers and code with a customer product without sharing its accounting route. Document users, marketing plans, delivery rights, and the component being analyzed before classifying development costs.
Authority
Read ASC 350-40-15-2A for the characteristics of internal-use software.
Put the concept to work
Apply this concept
- Use supplied purpose, marketing, delivery, authorization, component, and hosting facts to establish or withhold the internal-use software scope conclusion.
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- Asset — Apply
To apply this concept: Required. Software scope still begins with the controlled resource and its intended use.
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Use this idea next
- Cloud computing implementation cost — Analyze
Required level here: apply. Helpful. The hosting-service implementation model borrows an activity analysis without turning the arrangement into owned software.
- Current internal-use software capitalization — Apply
Required level here: apply. Required. The project-stage model applies only after internal-use scope is supported.
- Internal-use software standards clock — Analyze
Required level here: apply. Required. The standards clock is applied only after the software scope conclusion.
Show 1 more next steps
- Software to be sold, leased, or marketed — Apply
Required level here: apply. Helpful. Contrasting internal and external purpose prevents technology labels from deciding scope.