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Scope of this reference
Inspect the standard and the scope used in the teaching material. The verification date describes the stored review.
- Authority
- Financial Accounting Standards Board
- Standard
- ASU 2025-06 / ASC Subtopic 350-40 pending content
- Version
- ASU 2025-06 issued amendments
- Issued
- 2025
- Where it applies
- United States GAAP
- Entities covered
- All entities for annual periods beginning after December 15, 2027, including interim periods within; early adoption permitted
- Last source check recorded
- Aug 8, 2026
- Status recorded at review
- future
- Effective from
- 2027-12-16
Inspect the source: ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software
Check the applicable effective dates and later amendments in the source before applying this reference.
Earlier reference: FASB ASC Subtopic 350-40 — current internal-use software model
Concepts using this reference (2)
Instructional scope
The pending lane begins capitalization only after management has authorized and committed to funding the project and it is probable the project will be completed and used as intended. When unresolved high-risk development factors create significant uncertainty, capitalization does not begin until that uncertainty is resolved. Website-specific development guidance moves into the same Subtopic.
Transition
Mandatory application begins with annual periods after December 15, 2027, including interim periods within. Early adoption is permitted. A learner must apply the lane selected by the case's period, adoption status, and transition facts.
Limitations
The update does not settle externally marketed software delivered through cloud arrangements, unit of account, upgrades and enhancements, AI training, or data-conversion costs. Those are evidence requests, not implied answers.