FASB Could Take Up Cloud Computing Project
A cloud computing project could be in the works for the Financial Accounting Standards Board (“FASB”). During the April 4 Private Company Council meeting , most council members said they want implementation accounting for cloud computing software to be similar to the accounting for constructing on-site systems. Lining up the accounting for both would allow companies to potentially capitalize set-up costs, allowing them to postpone disclosing the expense as a long-term asset. David Hirsch, a council member, remarked that the current cloud computing guidance is confusing. In his opinion, cloud- and on-premises software implementation expenses must be recorded similarly.
Highlights from the Private Company Council’s Tuesday Meeting
The following is a recap of Financial Accounting Standards Board (“FASB”) projects discussed at Tuesday’s Private Company Council (“PCC”) meeting: Disclosure Framework. Numerous PCC members expressed support for the project, particularly the inventory exposure draft. The PCC also provided feedback on various portions of the project. Financial instruments—Hedge Accounting. Many PCC members favor the standard, including guidance to give private companies additional time to disclose hedge effectiveness. Liabilities and Equity—Targeted Improvements. Feedback received on the Exposure Draft was discussed, as well as the FASB’s research on an alternative to help streamline financial instruments accounting with “down round” features. The FASB was encouraged. Read More.
Topics: Cloud Computing, FASB, FASB Disclosure Framework Project, Financial Accounting Standards Board "FASB", Hedge Accounting, liabilities and equity, Private Company Council "PCC", Variable Interest Entity "VIE"
FASB Approves Technical Corrections to U.S. GAAP
A handful of routine corrections and clarifications to U.S. GAAP will soon be published as final amendments. Approved October 19 by the Financial Accounting Standards Board (“FASB”), two of changes were introduced in April as part of Proposed Accounting Standards Update (ASU) No. 2016-220, Technical Corrections and Improvements: Subtopic 820-10, Fair Value Measurement — Overall. The updated guidance clarifies the difference between a valuation approach and a valuation technique. An organization now must disclose when it changes to a valuation approach or valuation technique, and explain why the change occurred. ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting. Read More.