The probable-to-complete threshold
ASU 2025-06 permits capitalizing internal-use software cost once management has authorized and committed funding and it is probable the project will be completed and the software used for its intended function ASU 2025-06. Applied to a training run, this means capitalization can begin only when completion and use are probable, not merely when the budget is approved.
What probable means here
Probable is the established high US GAAP threshold: the future event is likely to occur. For a training run it asks whether it is likely the run completes and the resulting model is put to its intended use. Approving spend is necessary but not sufficient; you also need a credible basis that the project will succeed and be deployed.
Applying it mid-project
Costs incurred before the threshold is met are expensed. Once it is met, subsequent directly attributable compute is capitalized. If completion later becomes improbable, stop capitalizing and test the asset for impairment.
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Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.