A new FASB standard reduces the complexity in accounting for the costs of implementing a cloud computing service arrangement.
Accounting Standards Update 2018-15 aligns 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 standard, issued in August 2018, went into effect for public business entities in fiscal years beginning on or after Dec. 15, 2019, and will take effect for all other entities for reporting periods beginning after Dec. 15, 2020. Learn more.