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
Accounting Standards Codification Updated for Revenue Recognition and Leases Standards
The Financial Accounting Standards Board has issued Accounting Standards Update (“ASU”) No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. This Update adds, amends, and replaces Securities and Exchange Commission (“SEC”) paragraphs of the Accounting Standards Codification (“ASC”) concerning the adoption and transition rules of ASU No. 2014-09, Revenue from Contracts with Customers and ASU No. 2016-02, Leases, for public companies. ASU No.. Read More.
Topics: Accounting Standards Update "ASU", Emerging Issues Task Force "EITF", FASB, lease accounting, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, Securities and Exchange Commission "SEC"
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
FASB Task Force to Address Cloud Computing
The Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“Task Force”) has been ordered to investigate how companies should account for cloud computing services. Announced on May 10, the Task Force must address whether businesses should consider cloud computing setup fees as assets that are amortized throughout the life of the contract, or should the fees be recognized as an expense during the period they are incurred. The FASB is pushing for clarity on a growing concern among businesses with cloud computing contracts for company-wide applications like enterprise resource planning and customer relationship management. Board member Harold Monk said. Read More.
FASB Task Force Approves Proposed Guidance on Infrastructure Deals
An update to U.S. GAAP could provide clearer guidance on certain agreements between government entities and private-sector businesses. On March 16, the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) unanimously approved an amendment which covers deals involving a private organization that operates public infrastructure. The operator normally pays a fee to the government, and in turn receives all, or a part of, the revenues. In some arrangements, the government entity pays the private company to operate the facility but collects a portion of the proceeds. The EITF-approved amendment is part of Proposed Accounting Standards Update No. EITF-16C. Read More.
Topics: Emerging Issues Task Force "EITF", FASB, Financial Accounting Standards Board "FASB", Infrastructure, Proposed Accounting Standards Update, Service Concession Arrangements (Topic 853), U.S. GAAP