Companies may no longer have to evaluate the stage of their software project to determine how to expense costs

  • The Financial Accounting Standards Board (FASB) is proposing new accounting rules on software costs
  • The proposal would require companies to report cash amounts tied to their software costs
  • Companies would no longer have to evaluate the stage of their software project to determine how to expense the costs
  • The proposal aims to reduce compliance costs and provide clarity for companies
  • The FASB plans to issue a formal proposal by the end of the year

The Financial Accounting Standards Board (FASB) is moving forward with a proposal to update accounting rules for software costs. The proposal would require companies to report cash amounts tied to their software costs and eliminate the need to evaluate the stage of their software project to determine how to expense the costs. This would provide more clarity and reduce compliance costs for companies. The FASB plans to issue a formal proposal by the end of the year.·

Factuality Level: 7
Factuality Justification: The article provides a detailed and factual overview of the proposed changes to accounting rules regarding software expenditures. It includes quotes from relevant sources and explains the potential impact on companies and investors. The information is presented objectively without sensationalism or bias.·
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the proposed changes in accounting rules for software expenditures, including the implications for companies and investors. It explains the current rules, the proposed changes, and the reasoning behind them. The article includes quotes from experts and companies affected by the changes, adding depth to the discussion. Overall, the article stays on topic, supports its claims with examples, and offers valuable insights for readers interested in accounting and finance.·
Public Companies: Autodesk (not available)
Key People: Rich Jones (FASB Chairman), Scott Ehrlich (Managing Director at Mind the GAAP), Stephen Hope (Chief Accounting Officer at Autodesk), Sandy Peters (Senior Head of Advocacy at the CFA Institute), Christine Botosan (FASB Board Member)

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Financial Relevance: Yes
Financial Markets Impacted: Software and tech companies
Financial Rating Justification: The article discusses the potential impact of new accounting rules on software costs for U.S. public and private companies, which could affect how they report their cash spending on software in their financial statements. This would change the way companies account for internal use of software and software development costs, potentially reducing compliance costs. It also mentions that some tech companies have been seeking new accounting rules on licensing software.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: ·

Reported publicly: www.wsj.com