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Task Force to Issue Final Consensus on Cloud Computing Arrangements

The Emerging Issues Task Force (“EITF”) has agreed to issue a final consensus on its project to clarify the accounting for implementation expenses for a cloud computing arrangement that is a service contract. Voted on at a recent EITF meeting, 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,” will include the following decisions in the final consensus: Businesses will be required to capitalize the implementation costs of a hosting arrangement that is a service contract using the guidance under Goodwill and Other—Internal-Use. Read More.

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