Unified Front

Insights

ASU 2025-06 A New Era in Internal-Use Accounting Software

Published: October 1, 2025 | Bryan Joseph Alfonso

Think fast – accounting rules are finally keeping pace with the fast development of technology.

In September 2025, the Financial Accounting Standards Board (FASB) released ASU 2025-06, a sweeping update to ASC 350-40 on Internal-Use Software. For nearly three decades, ASC 350-40 has guided how businesses account for the costs of software they build for their own use. The core question it answered was simple but consequential: should software costs be treated as an investment or written off as an expense?

Back in 1998, when the rule was first drafted, software development looked a lot like building a house. You drew the plans, laid the foundation, and only once the entire structure was complete could you move in. Accounting rules mirrored that linear progression, with rigid stages—preliminary design, development, and implementation—marking when costs could be capitalized.

But software no longer grows brick by brick. It's released in bursts, tested, tweaked, and re-released—more like a living organism than a finished structure. The old accounting framework couldn't keep pace. Enter ASU 2025-06, a modernization built for today's agile, iterative software world.

Goodbye Stages, Hello Simpler Rules

This shift means finance teams need to focus less on labeling stages and more on proving that risks have been cleared and management is fully behind the project.

What Stayed the Same

While the structure has changed, some fundamentals remain untouched. ASU 2025-06 does not alter:

In other words, the update sharpens the recognition model for internal projects, but leaves other long-standing rules in place.

The Bigger Picture for Businesses

For companies, this update trades rigid stage-based rules for a principles-based test. That means more flexibility, but also more responsibility. The line between expense and asset now depends on how well management can document both its commitment and the project's likelihood of success.

In practice, though, this means finance leaders will need to strengthen governance over IT initiatives, align more closely with project managers, and keep clear records that auditors can follow.

For agile and fast-moving organizations, the new model may actually better mirror reality – but it requires sharper judgment and better controls to get right.

Turning Advancements into Advantage

For our clients, the implications are even clearer. You'll likely see more questions from auditors, more documentation requirements during project reviews, and potentially shifts in how quickly costs hit the balance sheet. Projects that rely on cutting-edge features, or that pivot frequently, may stay in the “expense” column longer than before.

That's where Unified Global comes in. Our dedicated Technical Accounting & Assurance Group (TAAG) is ready to help you navigate these new thresholds: assessing when costs qualify for capitalization, advising on adoption methods, and ensuring your project governance is airtight.

Moving Forward Together

Ultimately, ASU 2025-06 recognizes that software development is no longer linear, and accounting shouldn't be either. Moving forward, companies that embrace this shift early will have cleaner reporting, stronger controls, and fewer surprises down the line.

At Unified Global, this is an opportunity to help our clients turn a regulatory update into a competitive advantage. By modernizing your accounting policies now, you can align them with your business's existing approach: fast, flexible, and forward-looking.

Unified Accounting

goes beyond basic bookkeeping. We manage everything from multi-entity consolidations and accrual adjustments to financial close processes, cash flow analysis, and reconciliations. For business owners, that means clearer numbers, faster reporting, and less back-office stress. Whether scaling up or staying compliant, we bring high-level efficiency to every ledger.

Bryan boasts a decade of experience as a CPA and TAAG manager at Unified Global. He specializes in applying IFRS and US GAAP to elevate financial reporting across industries like crypto, real estate, mining, SaaS, manufacturing, and NPOs.

Want this applied to your business advantage?

Let's talk plans

Learn More Insights

Now that ASC 350-60 allows companies to measure crypto at fair value, the spotlight shifts to how clearly those assets are reported. Numbers on a balance sheet don't mean much if they're buried in vague categories or missing key context. That's where disclosures come in. For businesses holding crypto, they're a way to show investors, auditors, and internal leadership that your digital assets are being handled with structure, transparency, and care. Unified Global has worked with clients across industries to prepare crypto disclosures that meet audit scrutiny while providing decision-useful insight.

We're huge advocates of building healthy, human relationships with clients. They're our bread and butter after all. But when payments come too early or too late -- which, by the way, 93% of organizations experience – you can only point to their patterns for so long. You have to check your own yard too. The next time you're caught up on invoices, ask yourself: “is client behavior to blame, or are my systems just struggling to speed up?”

Congrats! All your financial records are finally caught up. Once your books are back in order, the next challenge is making sure they stay that way. Good bookkeeping is a process of perfection. The key is building a routine that keeps errors small, if not non-existent, and prevents major messes from forming in your financial anatomy. Unified Global's gold standard for bookkeeping consists of several complex tasks that keep our clients’ records in top shape. For the benefit of small businesses, we’ve managed to narrow them down to three knowledge tidbits.

Holding crypto on your balance sheet doesn't automatically mean you can report it under ASC 350-60. The new standard offers fair value treatment, but only for assets that meet a strict set of criteria. If they don't, they must follow the older, more limited accounting rules. Feel free to reach out to Unified Global for a clearer distinction between the two.

Receipts in drawers, raw screenshots on your phone, random email threads – does this sound like your small business’ accounting system right now? If you think, as a self-owned or single-handed business, that no one will notice, then you have a bigger problem on your hands.

Let’s face it: nobody raises capital with a pristine balance sheet. And if they do, they’re probably not the ones pitching investors; they’re the ones making the investments. The rest of us? We’re founders growing businesses, solving real problems, and trying to juggle customer demands, payroll, and investor decks on a timeline that always feels too tight.

Every owner will tell you that running a business is no small feat. You have to juggle sales, stuff, and basically survival, so it’s no surprise that bookkeeping sometimes falls through the cracks. But when mismatched numbers, missing invoices, or tax-time panic start piling up, it’s time to pause and figure out just how messy things have gotten.

In the world of business, there are only a few things more frustrating than delayed payments. No one wants the challenge of having to chase money that you’re entitled to – it’s like finishing a marathon, only to find out that the race host had run off with your medal. In fact, one-third of merchants claim that payment delays put their business at risk of closure.

The U.S. is once again at the cusp of sweeping tax reform. The One Big Beautiful Bill Act of 2025 (OBBBA) is here, and it promises deep rate cuts, streamlined rules, and fewer regulatory hurdles. Where others see this as just a headline, we at Unified Global's view this change as a set of real-life implications that clients must navigate carefully. Let’s comb through the critical provisions and what they could mean for different stakeholders.

Before Unified Global had to follow ASC 350-60, companies holding cryptocurrency faced a frustrating problem: there was no specific accounting standard to guide them. Most businesses defaulted to treating crypto as an intangible asset under ASC 350, not because it made the most sense, but because it was the closest match.