# Software Capitalization Glossary

The standards and terms behind capitalizing software costs — in plain English.

The accounting behind software capitalization comes wrapped in code names. Here's what each one means and where it fits — for the business-level picture, start with the [software capitalization guide](/software-capitalization).

- [ASC 350-40: Internal-Use Software](/software-capitalization/glossary/asc-350-40) — ASC 350-40 is the U.S. GAAP standard for capitalizing internal-use software — software built or bought to run your own business, not to sell.
- [ASC 350-50: Website Development Costs](/software-capitalization/glossary/asc-350-50) — ASC 350-50 is the U.S. GAAP standard for capitalizing website development costs — which build costs become an asset, and which are expensed.
- [ASC 720-45: Business and Technology Reengineering](/software-capitalization/glossary/asc-720-45) — ASC 720-45 governs the accounting for business-process and technology reengineering costs — which are expensed, even when bundled into a software project.
- [ASC 730: Research and Development](/software-capitalization/glossary/asc-730) — ASC 730 sets the default for research and development costs — expensed as incurred — the baseline the software-capitalization rules carve their exceptions out of.
- [ASC 985-20: Software to Be Sold](/software-capitalization/glossary/asc-985-20) — ASC 985-20 is the U.S. GAAP standard for capitalizing the cost of software you build to sell, lease, or market — keyed to technological feasibility.
- [ASU 2025-06: Performance Requirements](/software-capitalization/glossary/performance-requirements) — A term ASU 2025-06 defines as what the software needs to do — its functions and features; until the significant ones settle, capitalization waits.
- [ASU 2025-06: Probable-to-Complete Threshold](/software-capitalization/glossary/probable-to-complete) — The ASU 2025-06 threshold for capitalizing internal-use software — capitalize once funding is committed and the project is probable to be completed and used as intended.
- [ASU 2025-06: Significant Development Uncertainty](/software-capitalization/glossary/significant-development-uncertainty) — A condition introduced by ASU 2025-06 that blocks capitalizing internal-use software costs until novel technology is proven or requirements stabilize.