# ASC 985-20: Software to Be Sold

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.

**In plain terms:** if you build software to sell, lease, or license to customers, ASC 985-20 says you can't capitalize development costs until the product is technically proven. Before that, it's research.

ASC 985-20 (Software — Costs of Software to Be Sold, Leased, or Marketed) hinges on **technological feasibility**. All development costs incurred before technological feasibility is established are research and development, expensed as incurred. Once it's established — evidenced by a completed detailed program design, or a working model confirmed through testing — coding and testing costs are capitalized, until the product is available for general release.

This is the counterpart to [ASC 350-40](/software-capitalization/glossary/asc-350-40), which covers software built for internal use rather than for sale.

**See also:** [software to be sold in the capitalization guide](/software-capitalization#software-to-be-sold).

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