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EITF recommends asset treatment for some cloud costs

Tammy Whitehouse | June 19, 2018

The Emerging Issues Task Force at the Financial Accounting Standards Board has arrived at some conclusions about how companies should account for certain cloud computing arrangement costs.

FASB’s EITF at a recent meeting arrived at a consensus that customers in cloud computing arrangements set up as service contracts should apply guidance found in the Accounting Standards Codification under Subtopic 350-40 relating to internal-use software to determine which implementation costs should be recognized as an asset. The difference is important because asset recognition means it is added to the balance sheet and capitalized or...

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