# ASC 985-10: Software — Overall Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/985/10/) 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. Source downloaded (UTC): 2026-09-10T02:28:16.187Z to 2026-09-10T02:28:23.457Z Record version: sha256:c5339b6a5f834084b88d6ba77500f8788383a5874a62e7351c275ea726f31c04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 985-10: Software — Overall ### Machine-generated study aids ```json { "summary": "ASC 985-10 is the Overall subtopic of the Software Topic, which sets the scope umbrella for the industry-specific software guidance (costs of software to be sold, leased, or marketed; inventory; intangibles—goodwill and other; provision for losses; cost of sales and services; and research and development). The Topic provides only incremental industry-specific guidance—entities within its scope must also apply all other applicable GAAP (985-10-15-1). It applies to all entities and to computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process (985-10-15-2 through 15-3).", "key_points": [ "The Software Topic includes the Overall, Costs of Software to be Sold, Leased, or Marketed, Inventory, Intangibles—Goodwill and Other, Revenue Recognition—Provision for Losses, Cost of Sales and Services, and Research and Development Subtopics (985-10-05-1).", "The Software Subtopics provide only incremental industry-specific guidance; entities in scope must also comply with applicable guidance outside the Topic (985-10-15-1).", "The guidance applies to all entities (985-10-15-2).", "Scope covers computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process (985-10-15-3).", "Subtopics 985-20, 985-330, 985-350, 985-705, and 985-730 do not apply to software created for internal use, which is addressed by Subtopic 350-40 (985-10-15-3(b)).", "Those same Subtopics do not apply to arrangements to deliver software or a software system requiring significant production, modification, or customization of software, which fall under Topic 606 and Subtopic 340-40 (985-10-15-3(c)).", "Former software revenue recognition scope guidance in 985-10-15-3(a) was superseded by ASU 2014-09." ], "categories": [ "Industry-specific", "Recognition", "Intangibles and goodwill" ], "audience_level": "introductory", "student_note": "This subtopic is mostly a roadmap: its practical value is knowing which software costs go to ASC 985-20 (externally marketed software) versus ASC 350-40 (internal-use software) versus ASC 606/340-40 (customized software arrangements). A common misunderstanding is treating ASC 985 as a self-contained regime—it is only incremental guidance layered on top of general GAAP, and the old software revenue recognition rules were superseded by ASC 606.", "related_topics": [ "985-20", "350-40", "606", "340-40", "985-330", "985-730" ], "key_concepts": [ "software to be sold, leased, or marketed", "internal-use software", "incremental industry-specific guidance", "scope", "significant production, modification, or customization", "computer software costs" ] } ``` Source downloaded (UTC): 2026-09-10T02:28:16.187Z to 2026-09-10T02:28:16.187Z Record version: sha256:ae1e3089c7b8a5746c14b22107a074ef107754d19ae66125a017ab82a9637e4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 985-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/985/10/#00-status) SEC content: no ##### [985-10-00-1](https://asc.understandingaccounting.org/asc/985/10/#985-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:16.187Z to 2026-09-10T02:28:16.187Z Record version: sha256:f6170c5ce3c1d344a70a54be7036d4e186148a2e885f20b41f0d16ab68d5d698 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
985-10-05-1AmendedMaintenance Update 2018-12 (PDF)09/10/2018
985-10-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
985-10-15-3AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T02:28:19.969Z to 2026-09-10T02:28:19.969Z Record version: sha256:a3dbb5fc3e4bb8d3ee141654932417aa78b50ba710eae740591ee319f413c682 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 985-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/985/10/#05-overview-and-background) SEC content: no ##### [985-10-05-1](https://asc.understandingaccounting.org/asc/985/10/#985-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:19.969Z to 2026-09-10T02:28:19.969Z Record version: sha256:5f3badaee9ab933c8f289b0ab890912b299b5e2fe594371d1ceb9721f45e4fdd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Software Topic specifies standards of financial accounting and reporting for certain computer software. This Topic includes the following Subtopics: 1. a Overall 2. b Costs of Software to be Sold, Leased, or Marketed 3. c Inventory 4. d Intangibles—Goodwill and Other 5. e Revenue Recognition—Provision for Losses 6. f Cost of Sales and Services 7. g Research and Development 8. h [Subparagraph superseded by Maintenance Update 2018-12](https://asc.understandingaccounting.org/updates/maintenance-updates-2018/). ##### [985-10-05-2](https://asc.understandingaccounting.org/asc/985/10/#985-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:19.969Z to 2026-09-10T02:28:19.969Z Record version: sha256:32ce6c2d881b8c47f567aba3e56841777f11b39fc4b6017be93cc48388326d8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. \[Not used\] ##### [985-10-05-3](https://asc.understandingaccounting.org/asc/985/10/#985-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:19.969Z to 2026-09-10T02:28:19.969Z Record version: sha256:29edce37bcca19f4a61a8f588b2eb37df09c663955f32b50dafafad9dec2a4b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. \[Not used\] ##### [985-10-05-4](https://asc.understandingaccounting.org/asc/985/10/#985-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:19.969Z to 2026-09-10T02:28:19.969Z Record version: sha256:94354f3d54b816119a9a94618e621a5960e5529670c3ab42dab49619a71d0ef5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. \[Not used\] Source downloaded (UTC): 2026-09-10T02:28:23.457Z to 2026-09-10T02:28:23.457Z Record version: sha256:e771259bd7410da3242d12e67d08c44e35c91fc774aa534ea4f8fdff54003783 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 985-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/985/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [985-10-15-1](https://asc.understandingaccounting.org/asc/985/10/#985-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:23.457Z to 2026-09-10T02:28:23.457Z Record version: sha256:5c72bdec7c820088420c013d72647876c5bbba77db5c4752722aafbcfeda7432 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Subtopics within the Software Topic only provide incremental industry-specific guidance for entities defined in this Scope Section, or as further defined in the Scope Sections of the individual Software Subtopics. Entities within the scope of this Topic shall also comply with the applicable guidance not included in this Topic. #### Entities ##### [985-10-15-2](https://asc.understandingaccounting.org/asc/985/10/#985-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:23.457Z to 2026-09-10T02:28:23.457Z Record version: sha256:b8be220b862598f51071cd3d41a8ffda40ce92831b5ae0ac618cd808cbf7bfbf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Software Topic applies to all entities. #### Transactions ##### [985-10-15-3](https://asc.understandingaccounting.org/asc/985/10/#985-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:23.457Z to 2026-09-10T02:28:23.457Z Record version: sha256:ab158c10e56281543c72aabd5a7781292a9ab41871b837c0bb765cf203a4ac8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as follows, the guidance in the Software Topic applies to computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process: 1. a [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 2. b Subtopics 985-20, 985-330, 985-350, 985-705, and 985-730 do not apply to software created for internal use (see Section 350-40-15). 3. c Subtopics 985-20, 985-330, 985-350, 985-705, and 985-730 do not apply to arrangements to deliver software or a software system, either alone or together with other products or services, requiring significant production, modification, or customization of software (see Topic 606 on revenue from contracts with customers and Subtopic 340-40 on costs related to a contract with a customer).