FASB Accounting Standards Update (ASU), Intangibles— Goodwill and Other —Internal-Use Software (Subtopic 350-40)

Published: Sep 14, 2025

TXCPA’s Professional Standards Committee backs the proposed ASU on internal-use software costs, supporting modernized standards, clearer guidance, simplified disclosures, and flexible adoption to improve transparency and reduce complexity.

    The Texas Society of CPAs' Professional Standards Committee (PSC) expressed support for the proposed Accounting Standards Update (ASU) on internal-use software costs, emphasizing its potential to modernize accounting practices and improve transparency. The PSC agrees with the proposed classification of capitalized software costs as investing cash outflows and supports the alignment of standards with current software development practices. They recommend further guidance on assessing "significant" performance requirements and support simplified disclosure requirements to reduce preparers' complexity. Additionally, the PSC endorses the proposed adoption methods, with flexibility for private companies to adopt at their own pace, while allowing early adoption.

    Read the full comment letter here. View TXCPA PSC comment letter here.

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