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Worked-example setupScope and assumptions
- Linden Peak Instruments, every project, amount, purpose, date, and accounting-scope conclusion are fictional and supplied for instruction.
- The 2027 internal-use project has not early adopted ASU 2025-06 and uses the declared current Subtopic 350-40 lane.
- For the non-entry standards comparison, the $45,000 preliminary work precedes authorization and commitment to fund; significant integration uncertainty remains through the first $60,000 of application-development work; the uncertainty then resolves and probable completion and intended use are supported before the remaining $120,000.
- The hosting arrangement is stipulated to be a service contract; the $80,000 configuration cost qualifies under the supplied activity facts.
- For the separate subsequent-period illustration, the $80,000 deferred hosting implementation cost is ready for use January 1, has a 36-month hosting term with no qualifying renewal period, and uses straight-line recognition.
- The marketed-product technological-feasibility date is supplied as July 1 and availability for sale as October 1; the learner does not perform the feasibility assessment.
- Period
- Annual reporting period ending December 31, 2027
- Units
- US dollars and calendar dates
- Rounding
- Dollar schedules retain full precision and display to cents
Cover sheet: four clocks, one reporting period
The cost file spans four supplied routes. Ordinary laboratory work follows the Topic 730 lane. The internal automation project is for internal use in 2027 and has not early adopted ASU 2025-06. The hosted workflow arrangement is a service contract. The device-control product is marketed externally and has a supplied July 1 technological-feasibility date and October 1 availability date.
Those premises are not calculated. They are the entry ticket to the ledger.
Schedule 1: ordinary R&D and the legal-right line
| Cost | Supplied activity | Destination |
|---|---|---|
| Laboratory payroll | Ordinary internal R&D | $240,000 expense |
| Consumed prototype materials | Ordinary internal R&D | 60,000 expense |
| Successful patent filing work | Separate finite-lived legal-right cost | 18,000 capitalized |
The $300,000 R&D subtotal does not move when the patent filing succeeds. The filing line receives its own supported route; it does not rewrite the earlier activity.
A separate testing chamber is omitted from the numeric schedule because its alternative-use evidence is incomplete. The engineering file shows technical reuse, but no approved later assignment or remaining-service estimate. The workpaper asks for those facts rather than choosing zero or inventing a resale amount.
Schedule 2: current internal-use content
The declared current model expenses $45,000 of preliminary alternatives work, capitalizes $180,000 of application-development activity, and expenses $30,000 of training. The following comparison uses the same costs and additional supplied timing evidence. It is an analysis column, not a second 2027 entry.
| Cost slice | Amount | Current content | Hypothetical early-adopted pending content |
|---|---|---|---|
| Preliminary work before authorization and funding commitment | $45,000 | Expense | Expense |
| Application work while significant integration uncertainty remains | 60,000 | Capitalize | Expense |
| Application work after uncertainty resolves and completion and intended use are probable | 120,000 | Capitalize | Capitalize |
| Training | 30,000 | Expense | Expense |
| Total capitalized | $180,000 | $120,000 | |
| Total expensed | 75,000 | 135,000 |
The $60,000 difference follows the supplied trigger evidence. It does not mean that pending content always capitalizes less, or that a project-stage label can be combined with the pending uncertainty condition.
Schedule 3: hosting service implementation
The hosting arrangement is stipulated to be a service contract. The activity analysis defers $80,000 of qualifying configuration and interface work, expenses $20,000 training, and routes the $90,000 annual subscription to service expense. The deferred amount is not labeled owned software.
In the separate subsequent-period illustration, the $80,000 deferred amount is ready for use January 1 and the supported hosting term is 36 months with no qualifying renewal. Straight-line recognition produces $2,222.22 per month, $26,666.67 for twelve months, and a $53,333.33 ending balance. Full precision is retained before display rounding. This schedule does not change the 2027 cost-routing entry.
Schedule 4: marketed product
| Window | Cost | Destination |
|---|---|---|
| Before July 1 feasibility | $200,000 | R&D expense |
| July 1–September 30 | 150,000 | External-use software asset |
| After October 1 availability | 30,000 | Post-availability maintenance expense |
The design review, sprint completion, and beta date do not replace the supplied feasibility threshold.
Reconciliation
The twelve lines total $1,143,000. Expense destinations total $715,000: $500,000 R&D and $215,000 other period cost. Capitalized destinations total $428,000: $18,000 finite-lived legal right, $180,000 internal-use software, $80,000 hosting implementation, and $150,000 external-use software.
$715,000 expense + $428,000 capitalized = $1,143,000 cost ledger
The Python and workbook checks verify this disposition after the supplied scope decisions. They do not prove alternative future use, adoption, hosting contract scope, technological feasibility, or cost eligibility.
Quantitative companions
Choose from 2 ways to work with this calculation.
Verified calculation · intangible asset analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- cost events
- 13 fields
Inspect data
{
"application_development_after_uncertainty_resolution": {
"amount": 120000,
"destination": "internal_use_software"
},
"application_development_before_uncertainty_resolution": {
"amount": 60000,
"destination": "internal_use_software"
},
"hosting_configuration": {
"amount": 80000,
"destination": "hosting_implementation"
},
"hosting_subscription": {
"amount": 90000,
"destination": "other_period_expense"
},
"hosting_training": {
"amount": 20000,
"destination": "other_period_expense"
},
"internal_software_training": {
"amount": 30000,
"destination": "other_period_expense"
},
"laboratory_payroll": {
"amount": 240000,
"destination": "research_and_development_expense"
},
"post_availability_maintenance": {
"amount": 30000,
"destination": "other_period_expense"
},
"post_feasibility_product_work": {
"amount": 150000,
"destination": "external_use_software"
},
"pre_feasibility_product_work": {
"amount": 200000,
"destination": "research_and_development_expense"
},
"preliminary_internal_software": {
"amount": 45000,
"destination": "other_period_expense"
},
"prototype_materials": {
"amount": 60000,
"destination": "research_and_development_expense"
},
"successful_patent_filing": {
"amount": 18000,
"destination": "finite_lived_intangible"
}
}Recomputed result
| Measure | Value |
|---|---|
| application development after uncertainty resolution amount | 120,000 |
| application development before uncertainty resolution amount | 60,000 |
| external use software total | 150,000 |
| finite lived intangible total | 18,000 |
| hosting configuration amount | 80,000 |
| hosting implementation total | 80,000 |
| hosting subscription amount | 90,000 |
| hosting training amount | 20,000 |
| internal software training amount | 30,000 |
| internal use software total | 180,000 |
| laboratory payroll amount | 240,000 |
| other period expense total | 215,000 |
| post availability maintenance amount | 30,000 |
| post feasibility product work amount | 150,000 |
| pre feasibility product work amount | 200,000 |
| preliminary internal software amount | 45,000 |
| prototype materials amount | 60,000 |
| research and development expense total | 500,000 |
| successful patent filing amount | 18,000 |
| total capitalized | 428,000 |
| total cost events | 1,143,000 |
| total expense | 715,000 |
| total finite life ending carrying amount | 0 |
| total goodwill impairment | 0 |
| total indefinite life impairment | 0 |
| total period amortization | 0 |