Clearing the Fog: ASC 350-40 and Accounting for Cloud Contract Costs


Navigating the ever-evolving landscape of cloud computing can feel like an attempt to "clear the fog" without a roadmap. This course serves as that roadmap for CPAs and accounting professionals looking to understand and apply the guidelines set forth under ASC 350-40 for cloud computing costs. This course covers the latest accounting standards for cloud computing and:

  • demystifies the term "cloud computing"
  • describes and explains different types of cloud computing arrangements and cloud environments
  • demonstrates how cloud arrangements affect financial statements and financial ratios
  • provides insights into hosting contracts and their accounting implications
  • explains the guidelines for accounting for costs during various stages of cloud software development and implementation

So, what's changed over the years? Internal-use software has evolved considerably. In the past, many companies licensed software that was installed and run locally on their own physical servers. However, many of these arrangements have evolved over time to various types of cloud computing arrangements and "as a service" type offerings. The Financial Accounting Standards Board (FASB) has keenly followed this evolving trend and released several important Accounting Standard Updates (ASUs) impacting the accounting and financial reporting for cloud computing.

Learning Objectives

Upon completion of this course, you will be able to:

  • recall aspects of the concept and evolution of cloud computing
  • identify key requirements for accounting for implementation costs
  • remember rules for capitalizing implementations costs and for using the appropriate amortization period
  • differentiate between computer software that is and is not used for internal use and recognize proper application of the rules in ASC 350-40, Intangibles-Goodwill and Other- Internal-Use Software

Designed For

CPAs, financial accountants, managers


1-2 years accounting experience and/or some familiarity with cloud arrangements accounting

Advanced Preparation


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