Task Force to Release Consensus-for-Exposure on Cloud Computing Implementation Costs
Emerging Issues Task Force (“EITF”) members plan to release a consensus-for-exposure concerning EITF Issue No. 17-A, “Customer’s Accounting for Implementation, Setup, and Other Upfront Costs (Implementation Costs) Incurred in a Cloud Computing Arrangement That Is Considered a Service Contract.” The consensus-for-exposure is likely to address income statement alignment of implementation costs expensed with other expenses related to a cloud computing contract. The EITF has yet to announce whether the changes from Issue 17-A can be applied via analogy to contracts outside of the project’s scope. Such contracts include those that allow the use of intangible assets. In related news, the. Read More.
Topics: Cloud Computing, Cloud Computing Arrangements, Consensus-for-Exposure, Emerging Issues Task Force "EITF", FASB, Financial Accounting Standards Board "FASB", Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40)
FASB Task Force Addresses Cloud Computing Accounting Issue
The Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) has resolved a longstanding accounting issue concerning the costs for setting up various types of cloud-managed business services. During its October 12 meeting, the EITF affirmed that customers of cloud computing arrangements must account for them similarly to a software license for a large business application with Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. Last week’s decision could lead to an accounting change to U.S. GAAP. If so, the final amendment will allow companies to capitalize more costs related to installing cloud services such as employee training and creating interfaces. Read More.
Topics: Cloud Computing, Cloud Computing Arrangements, Emerging Issues Task Force "EITF", FASB, Financial Accounting Standards Board "FASB", Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40), U.S. GAAP
PCC Members Want Consistency on Cloud Computing Guidance
With the Financial Accounting Standards Board (“FASB”) continuing to research ways to improve guidance for cloud computing accounting, private organizations and their accountants are pushing for a simplified approach. At a September 19 meeting, Private Company Council (“PCC”) representatives expressed to the FASB their desire for the accounting guidance for implementation costs related to setting up cloud-based business software packages to be consistent with the board’s guidance for similar software licenses. Beth van Bladel, a PCC member and director of CFO for Hire LLC, argued in favor of cloud computing being treated similarly as software licensing. van Bladel said she preferred that companies decide on how to organize the contractual agreement based on the terms and. Read More.
FASB Looks to Resolve Accounting Issues with Cloud Computing Costs
A solution is in the works to help frustrated organizations account for their cloud computing software costs. At the Financial Accounting Standards Board’s (“FASB”) Not-for-Profit Advisory Committee meeting on September 8, Project Manager Jamie Dordik stated that the FASB’s research staff is currently reviewing opportunities to improve transparency of the accounting guidance for expenses associated with implementing cloud computing arrangements. Research staff members are looking at accounting options the FASB’s Emerging Issues Task Force (“EITF”) had considered at its July meeting. In that meeting, the EITF failed to reach a consensus on providing clear cloud computing guidance to businesses. One. Read More.
Topics: and Equipment (Topic 360), Cloud Computing, Cloud Computing Arrangements, Emerging Issues Task Force "EITF", FASB, FASB Not-for-Profit Advisory Committee, Financial Accounting Standards Board "FASB", Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40), Other Assets and Deferred Costs (Topic 340), Other Expenses — Business and Technology Reengineering (Subtopic 720-45), Plant, property
Separating Fact from Fiction About Cloud Technology: Part 2
It might seem like every company on the planet is migrating to “the cloud” – but does that mean every business should be connected to the cloud? Is cloud computing right for every company – or have its benefits been overstated? In Part 1 of “Separating Fact from Fiction About Cloud Technology,” we examined some of the logistical features of cloud computing that make work easier for people, such as being able to connect remote teams and giving startups and small companies more affordable access to big-company business services. Part two of this series is going to look at the technical features of cloud computing, as we take the time. Read More.
Separating Fact from Fiction About Cloud Technology: Part 1
Is every company on the planet really migrating to “the cloud” – that magical place where data and applications live, so we mortals can have instant access to everything from trivia facts to client databases on our phones and laptops? Cloud computing has gone from being a trendy novelty to a necessity – even a way of life. We connect to the cloud every time we check social media, use GPS, or work on projects in Google Drive or Office 365. Cloud computing is popular, because it has some clear advantages for businesses and even makes day-to-day life a little. Read More.