Respondents to the FASB’s Invitation to Comment (ITC) have requested changes to address agile software development and the increasingly blurred lines between internal- and external-use software.
- Companies that undertake internal- and/or external-use software development
- Changing US GAAP accounting for software development costs was named a priority by many respondents to the ITC.
- Respondents suggested the FASB revise the cost capitalization guidance to conform with agile software development.
- Respondents also suggested that the cost capitalization guidance in US GAAP should not differ so wildly for internal- and external-use software.
- Respondents were split between recommending:
- that no distinction should exist between internal- and external-use software; and
- aligning the guidance for software that is licensed to customers and software that is used by customers only on a hosted basis, but retaining a separate model for ‘true’ internal-use software.
- Introduction and background
- Key impacts
- Existing guidance not suited to agile software development
- Divergent internal- and external-use software accounting models