Overview

The Accounting Standards Board (AcSB) considered its priorities for projects and decided to add accounting for cloud computing arrangements to its 2020-2021 Annual Plan. 

The Board is undertaking research to better understand different types of cloud computing arrangements entered into by private enterprises and not-for-profit organizations – and the accounting issues related to these arrangements.

At its meeting on September 9, 2020, the AcSB received feedback from its Private Enterprise Advisory Committee (PEAC) and Not-for-Profit Advisory Committee (NFPAC) on the issues relating to cloud computing arrangements. Based on the feedback, the Board tentatively decided that the two main issues to consider are:

• the customer’s accounting for fees paid in a cloud computing arrangement; and
• accounting for the related implementation costs.

The AcSB noted that these arrangements are prevalent for both private enterprises and not-for-profit organizations. The Board discussed various options to address these two issues, such as producing educational materials or undertaking standard-setting activities. The Board directed staff to gather more information on the various cloud computing arrangements occurring in practice to better inform its decision on the appropriate way forward.