CapitalizeEval-suite build
Eval-suite build
The posting
Building an evaluation and test harness for internal use is internal-use software. Direct build costs incurred in the application-development stage are capitalized ASC 350-40-25, while running the evaluations afterward is a period cost. The harness carries a future benefit you control, which is what distinguishes the build from the recurring compute of running it.
Build vs run
The eval suite splits cleanly. Designing and coding the harness, the scorers, the datasets tooling and the pipeline is development, capitalizable once the gate is cleared. Executing eval runs against models, and maintaining the suite, is operation, expensed as incurred.
CapitalizeIllustrative example, not client data
CapEx / Balance sheet
OpEx / P&L
DrSoftware asset (intangible)X
CrCashX
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)
- [S4] Weaver: Navigating internally developed software costs: U.S. GAAP vs tax treatment (US GAAP)
Ledger current as of 2026-10-23. A position and a citation, not accounting advice. See how we cite.