Industry Insights

FASB Issues Final Standard on Cloud Computing

April 2015

On April 15, 2015, the Financial Accounting Standards Board (FASB) issued a final standard to eliminate diversity and simplify the application of generally accepted accounting principles (GAAP) by providing clear guidance for customer fees paid in a cloud computing arrangement. Accounting Standards Update 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):  Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, requires customers to determine whether a cloud computing arrangement includes a software license, using the same guidance cloud service providers apply to determine whether they are selling a license to software or providing a service. 

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