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CIPFA: Exploring Accounting for the Cloud [ITC]

Next steps:

As a first step, CIPFA has produced a paper to explore some of the issues and would like to invite comments from interested and informed parties to see if additional guidance would be helpful.

Last up­dated:

No­vem­ber 2016

Overview

Cloud computing is in the process of revolutionizing the way that IT services are provided across public services. The UK Government has adopted a “cloud first” policy since 2013, inspired by the promises to radically reduce costs through economies of scale and greater flexibility, and there is an expectation that almost all organizations will be using cloud technologies by 2020.

Cloud computing can, however, create problems for finance teams as it means that software and technology are purchased “as a service”, with expenditure potentially moving from capital to revenue. Plus, where charges are based on use, there may be less certainty over future costs. There may also be VAT implications.

CIPFA, as the leading body advising on public sector accounting, has been asked to look at issues raised by “accounting for the cloud” on behalf of its members and their employers. As a first step, it has produced a Paper to explore some of the issues and would like to invite comments from interested and informed parties to see if additional guidance would be helpful. 

CIPFA is inviting feedback on the following points: (i) Is your organization experiencing or expecting to experience any difficulties in financing the transition to use of cloud based software systems? And (ii) if so, what will be your approach, and can you offer a case study or any additional insights?

Other de­vel­op­ments

No­vem­ber 2016

On No­vem­ber 22, 2016, the CIPFA is­sued a Paper, which explores some of the accounting issues involved and invites comments from interested parties to see if additional guidance would be helpful.

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