The development window
The development window is the span during which token and compute spend on an internal-use build can be capitalized. It opens when the preliminary stage ends and application development begins, and closes when the software is substantially complete and ready for use ASC 350-40-25. Spend outside the window, before it or after go-live, is expensed.
When the window opens
Until ASU 2025-06 is adopted, it opens once the preliminary project stage, conceptual evaluation and vendor selection, is complete, management has committed funding, completion is probable, and coding, configuration and directly attributable build compute begin. After adoption (annual periods beginning after 15 December 2027) there are no stages: it opens when funding is committed and the probable-to-complete threshold is met, which it is not while significant development uncertainty exists.
When it must close
It closes when the software is substantially complete and ready for its intended use. After that, operation and maintenance are post-implementation costs, expensed ASC 350-40-25.
Posts to
Primary sources
- [S7] FASB: ASU 2025-06, Intangibles, Goodwill and Other, Internal-Use Software (Subtopic 350-40): Targeted Improvements (issued September 2025; reproduces the amended ASC 350-40 text) (US GAAP)
Ledger current as of 2026-10-23. A position and a citation, not accounting advice. See how we cite.