# ASC 730-985: Research and Development — Software

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/730/985/)

Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.

Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure.

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## ASC 730-985: Research and Development — Software

### Machine-generated study aids

```json
{
  "summary": "ASC 730-985 is a \"link\" subtopic: it contains no substantive rules of its own but points readers from the research and development Topic to the software guidance. It directs users to 985-20-25-1 for costs incurred to establish the technological feasibility of software to be sold, leased, or otherwise marketed, and to 985-20-25-8 through 25-10 for the cost of purchased software to be marketed.",
  "key_points": [
    "This Subtopic only provides links to guidance on research and development costs of computer software (730-985-05-1).",
    "Paragraph 985-20-25-1 governs the treatment of costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed (730-985-25-1).",
    "Paragraphs 985-20-25-8 through 25-10 govern the cost of purchased computer software to be sold, leased, or otherwise marketed (730-985-25-2).",
    "Because the Subtopic is purely a cross-reference, no recognition, measurement, or disclosure requirements originate here."
  ],
  "categories": [
    "Recognition",
    "Intangibles and goodwill",
    "Industry-specific"
  ],
  "audience_level": "introductory",
  "student_note": "Know the navigation point: software R&D questions are answered in ASC 985-20, not in ASC 730 itself. The common misunderstanding is thinking ASC 730 sets a separate rule for software costs — it simply expenses costs until technological feasibility is established under 985-20.",
  "related_topics": [
    "985-20",
    "730-10",
    "350-40",
    "350-30"
  ],
  "key_concepts": [
    "research and development costs",
    "computer software to be sold, leased, or otherwise marketed",
    "technological feasibility",
    "purchased computer software",
    "cross-reference subtopic",
    "software capitalization"
  ]
}
```

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## ASC 730-985-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/730/985/#05-overview-and-background)

SEC content: no

##### [730-985-05-1](https://asc.understandingaccounting.org/asc/730/985/#730-985-05-1)

Pending content: no

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This Subtopic only provides links to guidance on research and development costs of computer software.

Source downloaded (UTC): 2026-09-10T01:16:08.583Z to 2026-09-10T01:16:08.583Z

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## ASC 730-985-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/730/985/#25-recognition)

SEC content: no

#### Costs to Establish Technological Feasibility

##### [730-985-25-1](https://asc.understandingaccounting.org/asc/730/985/#730-985-25-1)

Pending content: no

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Paragraph [985-20-25-1](https://asc.understandingaccounting.org/asc/985/20/#985-20-25-1) specifies the treatment for costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed.

#### Costs of Purchased Computer Software

##### [730-985-25-2](https://asc.understandingaccounting.org/asc/730/985/#730-985-25-2)

Pending content: no

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See paragraphs

[985-20-25-8 through 25-10](https://asc.understandingaccounting.org/asc/985/20/#985-20-25-8)

for guidance regarding the cost of purchased computer software to be sold, leased, or otherwise marketed.