SplitSplit
Split: allocating one commitment across lines
The posting
A split posting allocates one spend item across capitalize, prepaid and expense because a single commitment funds more than one activity. A reserved commitment used partly to build an internal asset and partly to run production, or a RAG spend split between build and run, must be apportioned on a defensible, documented basis rather than posted to a single line ASC 350-40-25.
When a split is required
- One commitment funds both a capitalizable build and period operation.
- A platform spend covers both development-window work and ongoing run.
- Reserved capacity serves internal build, production inference and experimentation at once.
Setting the allocation
Base the split on usage that is measurable and evidenced: capacity hours by activity, token volumes, or engineer time in the development window. Document the basis at the time, because the capitalizable share is the number an auditor will test.
Illustrative capitalizable share of a split40 - 60%
CapitalizeExpense
Instruments and mechanics that land here
Primary sources
- [S1] KPMG: Hot Topic: Accounting for internal-use software (ASC 350-40) (US GAAP)
- [S2] KPMG: Cloud computing implementation costs post ASU 2018-15 (US GAAP)
Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.