Capitalize: token and compute spend as an asset
Capitalizing token or compute spend means recording it as a software asset on the balance sheet rather than an expense in the period. Under US GAAP only directly attributable costs incurred in the application-development stage of internal-use software qualify ASC 350-40-25, gated by ASU 2025-06. The asset is measured at cost and amortized over its useful life once available for use.
Which costs enter the asset
- Directly attributable compute and engineering to build the software in the development window ASC 350-40-25.
- External direct costs of materials and services consumed in building it.
- Not: preliminary-stage evaluation, post-implementation operation, training, or general overhead.
Start and stop dates
Under the classic ASC 350-40 model, capitalization starts when the preliminary stage ends and the application-development stage begins, and stops when the software is substantially complete and ready for its intended use. Under ASU 2025-06, capitalization starts once the probable-to-complete threshold is met and no significant development uncertainty remains.
Which instruments land here
- Eval-suite build, integration code and the build portion of a prompt registry, vector DB or MLOps pipeline.
- One-off training and fine-tuning runs that produce an owned internal artifact, once the gate is cleared.
Instruments and standards that land here
Primary sources
- [S1] KPMG: Hot Topic: Accounting for internal-use software (ASC 350-40) (US GAAP)
- [S5] IFRS Foundation: IAS 38 Intangible Assets (IFRS)
Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.