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FASB clarifies guidance on cloud computing arrangements

  • FASB (US Financial Accounting Standards Board) Image

Aug 29, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” in response to the EITF’s consensus on Issue 17-A.

The ASU clarifies certain aspects of ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which was issued in April 2015. Specifically, ASU 2018-15 “align[s] the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).” The ASU does not affect the accounting for the service element of a hosting arrangement that is a service contract.

For more information, see Deloitte’s related Heads Up newsletter as well as the press release and ASU on the FASB’s Web site.

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