Applying financial reporting standards can be quite complex. The BDO team can help you assess your situation and prepare for the opportunities and challenges involved.
Applies to accounting for a customer's expenditures in a cloud computing arrangement and determining whether a software intangible asset exists in the arrangement.
Expenditures on tangible elements of the arrangement such as property, plant and equipment and right to use a tangible asset are dealt with in S3061 Property, Plant and Equipment, & S3065 Leases.
- Cloud computing is the on-demand delivery of computing resources over the internet or a private network.
- Computing resources include software, servers, data storage, network capabilities and more.
- Delivery models describe the combination of computing resources a vendor provides.
- Common types of delivery models: Software as a Service (“SaaS”), Platform as a Service (“PaaS”), Infrastructure as a Service (“IaaS”).
- The way computing resources are delivered is referred to as the deployment model. A deployment model is the computing environment in which the computing resources reside, such as cloud-based, on-premises or hybrid environment.
- The purchase of a software license has started to shift to a subscription fee to access the software. The subscription fee enables the customer to access the software residing on a vendor's cloud environment (which provides the infrastructure to support running the software, including providing the latest software updates) during the arrangement term.
- An enterprise may enter into a multiple-element arrangement with a vendor that includes a software element, hardware element & implementation activities.