FASB Discusses Accounting for and Disclosure of Software Costs

At its June 18, 2024, meeting, the FASB discussed its project on the accounting for and disclosure of software costs, including stakeholder feedback regarding the Board’s recent tentative decision (at its March 20, 2024, meeting) to make targeted improvements to the guidance on internal-use software in ASC 350-40. Specific aspects of the guidance that would be affected by the changes include the “probable to complete” recognition threshold, significant development uncertainties, and unresolved high-risk development issues.

In addition, the Board decided that the guidance in ASC 350-50 on Web site development costs would be superseded and incorporated into ASC 350-40. The Board also made decisions related to the presentation and disclosure requirements as well as transition.

The staff has been directed to draft a proposed Accounting Standards Update for a vote by written ballot. For more information, see the tentative Board decisions on the FASB’s Web site.