Cloud Computing – AcSB

Date recorded:

At its meeting on September 15-16, 2021, the AcSB continued its discussion of the issues regarding the customer’s accounting for fees paid in a cloud computing arrangement and the related implementation costs. The Board discussed a proposal that involves:

  1. clarifying the application of existing guidance;
  2. permitting entities to apply a simplified approach to account for cloud computing arrangements; and
  3. capitalizing directly attributable implementation costs when the arrangement is a software service.

The simplified approach is aimed at permitting entities to expense the amounts in a cloud computing arrangement without having to perform a complex analysis. The Board tentatively decided to proceed with the simplified approach but directed the staff to consider how the approach could be applied in a manner that alleviates the current complexity in practice. The AcSB also tentatively decided to proceed with developing guidance for entities to capitalize directly attributable implementation costs in a situation when the cloud computing arrangement is a software service. The Board began discussing how such costs would be presented in the financial statements. The AcSB will continue its discussions on developing the proposals, including considering presentation, disclosure, and transitional provisions, at its October 2021 meeting.

Review the Executive Summary on the AcSB's Web site.

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