FASB's new software cost guidance
PwC's accounting podcast
Key changes in the new standard
Pat Durbin summarizes the targeted improvements and why the board kept changes narrow and focused.
In this episode, we explore the FASB’s new software cost guidance and its impact on accounting for internal‑use software—what’s in scope, how to evaluate the revised capitalization criteria, the effective date and transition, and other key changes. We also take a deeper dive into AI‑related software development.
In this episode, we discuss:
- 0:00 – Background and scope on the FASB’s new ASU on internal-use software costs
- 11:10 – Capitalization criteria, including “significant development uncertainty”
- 20:38 – Examples of evaluating “significant development uncertainty”
- 30:50 – Other insights and updates related to the software costs guidance
- 34:00 – Effective date of the ASU and transition methods
- 37:41 – Accounting considerations for AI-related software development
For more: FASB updates software cost guidance, Software costs guide
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About our guests
Pat Durbin is a PwC National Office Deputy Chief Accountant. He has over 30 years of experience consulting with our clients and engagement teams on complex accounting matters, including issues related to revenue, compensation, income taxes, and inventory under both US GAAP and IFRS.
Mike Coleman is a partner in PwC's National Office who specializes in accounting for revenue and software arrangements and has served technology clients for much of his career. In addition, Mike has represented the firm on the AICPA Software Task Force.
About our host
Heather Horn is the PwC National Office Sustainability and Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com
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