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
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