ASU 2025-06: 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.
In plain terms: you can’t start capitalizing software costs while the big unknowns are unresolved — either the technology is unproven, or you don’t yet know what the software must do.
Significant development uncertainty is a concept introduced by ASU 2025-06. It gates the “probable-to-complete” threshold: capitalization can’t begin while it exists. Under ASC 350-40, it exists if either:
- the software has novel, unique, or unproven technology whose uncertainty has not been resolved through coding and testing; or
- the significant performance requirements aren’t identified yet, or keep being substantially revised.
For agile teams it maps to two familiar moments: a spike or proof-of-concept burning down technical risk, and a backlog settling once scope stops churning. Until both resolve, the work is expensed.
See also: ASU 2025-06, the probable-to-complete threshold.
Capitalize software development costs in Jira — without the manual work
Quantify turns Jira activity into audit-ready software-capitalization data automatically — no manual timesheets.