Hit your CapEx target without the audit anxiety.
Teams default to OpEx because the rules are too complicated to remember. Capitalisable work goes uncapitalised, the CFO finds out at close, and someone gets a Sally email.
Flowstate classifies every piece of effort against ASC 350-40 and FRS 102, splits creation from maintenance automatically, and stops the backdated reclassification scramble.
The rules just changed. Most companies haven’t.
ASC 350-40 was redrawn in September 2025. The capitalisation question is no longer about development stages — it’s about whether your effort tracking is precise enough to support a defensible split.
All references to “development stages” are gone. Two new criteria: management authorisation, and probable completion. Effective for annual periods after Dec 15, 2027 — early adoption permitted.
FASB, Accounting Standards Update 2025-06 (PDF) →“Many companies fail to allocate engineer hours with sufficient precision, leading to either undercapitalization or overcapitalization.” The new principles-based regime makes that gap more visible, not less.
CFO commentary on ASC 350-40 reform, 2025 →Auditors increasingly expect contemporaneous evidence — not a backdated allocation built in March. Flowstate captures the classification at the moment the effort happens.
KPMG, FASB final ASU on software cost accounting →The modules that solve this
Two products that turn capitalisation from a year-end exercise into a daily output.
Stop reclassifying at close.
Book a demo. We’ll show your capitalisation rate, your splits, and the rationale your auditor will accept — running continuously on your data.