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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.

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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.

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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.

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