skip to content

AcG-20 - Customer's Accounting for Cloud Computing Arrangements Accounting

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.

Read the document


BDO can help you navigate the road ahead

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.

Contact us today to start the conversation

This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our privacy statement for more information on the cookies we use and how to delete or block them.

Accept and close