Capitalizing Software Costs: Update

Up to 2024, U.S. firms capitalized investment in software only past the point of “technical feasibility.” Software investments are large for many corporations today and that threshold is rather fuzzy.

June 2024, the FASB proposed capitalization of software costs at the point when executives sign off on the project with the likelihood that the project will be completed and the software will carry out its intended use. This does not apply for software developed for customers.

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