KPMG reports on the EITF’s deliberations on the accounting for implementation costs incurred in a cloud computing arrangement (i.e. a hosting arrangement) that does not contain a software license. The EITF directed the FASB staff to perform additional research on two alternative models and deliberations are expected to continue at the September 14, 2017 meeting.
Customers’ accounting for implementation costs incurred in a cloud computing arrangement that does not contain a software license may change.
The EITF requested the staff to perform additional research on two alternative models:
Alternative B on Issue 3 in the EITF paper. Implementation costs associated with a cloud computing arrangement that does not contain a software license would be recognized as an asset or an expense when incurred on the basis of other existing GAAP (ASC 340, ASC 350-40, ASC 360, and ASC 720-45) first, and if the costs are not covered by other GAAP, the customer would:
At this meeting, the SEC Observer also announced relief for certain public business entities. See our Defining Issues. Alternative C on Issue 3 in the EITF paper. Implementation costs associated with a cloud computing arrangement that does not contain a software license would be accounted for the same as if they were incurred as part of a software licensing arrangement within the scope of ASC 350-40.
Receive timely updates on accounting and financial reporting topics from KPMG.
Receive timely updates on accounting and financial reporting topics from KPMG.