Final Amendments Approved for Reporting Cloud Computing Fees

February 25, 2015 Off By David

Grazed from Reuters. Author: Editorial Staff.

The FASB agreed to amend U.S. GAAP to clarify how cloud computing clients report fees they pay to suppliers. Cloud computing customers are expected to use the amended guidance to determine whether they have a license to use the software or a service contract.

The FASB agreed on February 18, 2015, to finalize amendments to U.S. GAAP to clarify how cloud computing clients report fees they pay to suppliers. A draft of the amendments was published in August in Proposed Accounting Standards Update (ASU) No. 2014-230,Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement…

With the amendments, the FASB is addressing an issue that had been overlooked in U.S. GAAP, which hadn’t explained how customers should report cloud-computing fees. For some financial professionals, the lack of a clear standard made reporting the fees complicated and costly. Some professionals told the FASB that the lack of a standard led to inconsistent reporting of the fees…

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