# ASC 720-45-55: Other Expenses — Business and Technology Reengineering — 55 Implementation Guidance and Illustrations

Source: FASB Accounting Standards Codification, Basic View

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## ASC 720-45-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/720/45/#55-implementation-guidance-and-illustrations)

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#### Implementation Guidance

##### [720-45-55-1](https://asc.understandingaccounting.org/asc/720/45/#720-45-55-1)

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The following table sets forth the accounting for typical components of a business process reengineering/information technology transformation project based on whether the item should be:

1.  a
    
    Expensed as incurred in accordance with the guidance contained in this Subtopic
    
2.  b
    
    Expensed as incurred in accordance with internal-use software guidance contained in Subtopic 350-40
    
3.  c
    
    Capitalized in accordance with internal-use software guidance contained in Subtopic 350-40
    
4.  d
    
    Capitalized as part of the cost of acquiring a fixed asset in accordance with a company's existing policy.
    

(Note that letters in the grid refer to the corresponding guidance listed above.)

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-C13FBC10-DAC6-403B-B430-8C749D60705A-low.gif)
    
    Third Party Internal Steps Expense Capitalize Expense Capitalize Business process reengineering and information technology transformation: Preparation of request for proposal a a Current state assessment a a Process reengineering a a Restructuring work force a a Preliminary software project stage activities: Conceptual formulation of alternatives b b Evaluation of alternatives b b Determination of existence of needed technology b b Final selection of alternatives b b Application development stage activities: "Design of chosen path, including software configuration and software interface" c c Coding c c Installation to hardware c c "Testing, including parallel processing phase" c c Data conversion costs: a. Costs to develop or obtain software that allows for access of old data by new system c c b. All other data conversion processes b b Training b b Post-implementation/operation stage activities: Training b b Application maintenance b b Ongoing support b b Acquisition of fixed assets: "Purchase of new computer equipment, office furniture, or work stations" d N/A N/A Reconfiguration of work area—architect fees and hard construction costs d d
    

Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance:

[350-40-65-4](https://asc.understandingaccounting.org/asc/350/40/#350-40-65-4)The following table sets forth the accounting for typical components of a business process reengineering/information technology transformation project based on whether the item should be:

1.  a
    
    Expensed as incurred in accordance with the guidance contained in this Subtopic
    
2.  b
    
    [Subparagraph superseded by Accounting Standards Update No. 2025-06](https://asc.understandingaccounting.org/updates/asu-2025-06/).
    
3.  c
    
    [Subparagraph superseded by Accounting Standards Update No. 2025-06](https://asc.understandingaccounting.org/updates/asu-2025-06/).
    
4.  d
    
    Capitalized as part of the cost of acquiring a fixed asset in accordance with a company's existing policy
    
5.  e
    
    Capitalized or expensed in accordance with the internal-use software guidance contained in Subtopic 350-40.
    

(Note that letters in the grid refer to the corresponding guidance listed above.)

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-960B46E9-0EF8-4D2A-8260-05C8D4907350-low.gif)
    
    Third Party Internal Steps Expense Capitalize Expense Capitalize Business process reengineering and information technology transformation: Preparation of request for proposal a a Current state assessment a a Process reengineering a a Restructuring work force a a "Acquire, develop, or implement internal-use software" e e e e Acquisition of fixed assets: "Purchase of new computer equipment, office furniture, or work stations" d N/A N/A Reconfiguration of work area—architect fees and hard construction costs d d