Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38) — Finalisation of agenda decision (Agenda Paper 12A)

At its March 2021 meeting, the IFRS Interpretations Committee (Committee) decided not to add a standard-setting project to the work plan in response to a submission about the customer’s accounting for costs of configuring or customising the supplier’s application software in a Software as a Service (SaaS) arrangement. The Committee instead decided to finalise an agenda decision that would include material explaining how the applicable principles and requirements in IFRS Standards apply to the fact pattern described in the submission.

Some respondents to the tentative agenda decision highlighted shortcomings in the requirements of IAS 38 in their application to intangible asset arrangements linked to digitalisation. As previously reported to the Board, respondents to the tentative agenda decision (Customer’s Right to Receive Access to the Supplier’s Software Hosted on the Cloud (IAS 38)) also made similar comments.

While voting to finalise the agenda decision, the Committee suggested that the Board consider such feedback as part of its Third Agenda Consultation.

The purpose of this meeting was to ask the Board members whether they object to the Committee’s decision that a standard-setting project should not be added to the work plan and the Committee’s conclusion that the agenda decision does not add or change requirements in IFRS Standards.

Board decision

There was no discussion on this topic. None of the Board members objected to the agenda decision.

IFRIC Update March 2021 (Agenda Paper 12B)

The staff presented the March 2021 IFRIC Update to the Board. None of the Board members had any questions or comments.