FASB Issues Final Rules On Cloud Computing Software Arrangements

The Accounting Policy & Practice Report ® provides financial accounting policy makers, advisors, and practitioners with the latest news, expert insights, and guidance on emerging, evolving, and complex accounting issues. Expert News & Commentary.

April 15 — The Financial Accounting Standards Board issued final rules to clarify that if a cloud computing arrangement includes a software license, a customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses.

If a cloud computing arrangement doesn't include a software license, the customer should account for the arrangement as a service contract, the FASB states.

The guidance, issued April 15, will not change generally accepted accounting principles for a customer's accounting for service contracts, the FASB says.