FASB recently issued an Accounting Standards Update (ASU) that amends its guidance on accounting for internal-use software costs.
The amendments in the new ASU apply to all entities subject to guidance in FASB Accounting Standards Codification Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software.
FASB said the amendments in the ASU improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future.
The amendments in the ASU are effective for all entities for annual reporting periods beginning after Dec. 15, 2027, and interim reporting periods within those annual reporting periods. FASB will permit early adoption of the guidance at the beginning of an annual reporting period. Read more.