{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/985/20/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"985","topic_title":"Software","subtopic":"985-20","subtopic_title":"Costs of Software to Be Sold, Leased, or Marketed","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Amortization of Capitalized Software Costs","paragraphs":[{"citation":"985-20-35-1","para":"35-1","html":"
Capitalized software costs shall be amortized on a product-by-product basis. The annual amortization shall be the greater of the amounts computed using the following:
  1. a
    The ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product
  2. b
    The straight-line method over the remaining estimated economic life of the product including the period being reported on.
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Because a net realizable value test, which considers future revenues and costs, must be applied to capitalized costs (see paragraph 985-20-35-4), amortization shall be based on estimated future revenues. In recognition of the uncertainties involved in estimating revenue, amortization shall not be less than straight-line amortization over the product's remaining estimated economic life.
","snippet":"Because a net realizable value test, which considers future revenues and costs, must be applied to capitalized costs (see paragraph 985-20-35-4), amortization shall be based on estimated future revenues. In recognition o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:81e58179773217f2dd39092659f6c0755fab4713db6d50c658e6675e347f7920","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}},{"citation":"985-20-35-3","para":"35-3","html":"
Amortization shall start when the product is available for general release to customers.
","snippet":"Amortization shall start when the product is available for general release to customers.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:724eeb3160612d961faf830a0034c87914614b2f0fd00b657ce29e8bd417c88b","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:159ec06c6f3b161d9f898810e2668d34e7a12db47fde10fc96cdf40b63e17b18","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}},{"block":null,"heading":"Net Realizable Value of Capitalized Software Costs","paragraphs":[{"citation":"985-20-35-4","para":"35-4","html":"
At each balance sheet date, the unamortized capitalized costs of a computer software product shall be compared to the net realizable value of that product. The amount by which the unamortized capitalized costs of a computer software product exceed the net realizable value of that asset shall be written off. The net realizable value is the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and customer support required to satisfy the entity's responsibility set forth at the time of sale. The reduced amount of capitalized computer software costs that have been written down to net realizable value at the close of an annual fiscal period shall be considered to be the cost for subsequent accounting purposes, and the amount of the write-down shall not be subsequently restored.
","snippet":"At each balance sheet date, the unamortized capitalized costs of a computer software product shall be compared to the net realizable value of that product. The amount by which the unamortized capitalized costs of a compu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b6fae47f9fade3edf881f350c609549dbb41a9b7454da5e79a3428b4df713e0","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2572b97380cab7aa948006db6414b5c911d1d8880f2b4df5d545dfb3d86472e3","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ac3f4fade182b3e601f13d783d1d7c8e23bbba93ab46a7648b45aa4b9f4d282","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ac3f4fade182b3e601f13d783d1d7c8e23bbba93ab46a7648b45aa4b9f4d282","downloaded_from":"2026-09-10T02:28:40.274Z","last_downloaded_at":"2026-09-10T02:28:40.274Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481342","source_sha256":"4ae2395a5ebb1fb2c4f92860f2726b16f9348737a487ef5b9dd27b84a15710d8"}}