The Accounting Standards Board (AcSB) considered its priorities for projects related to private enterprises and not-for-profit organization accounting standards. The AcSB decided to add accounting for cloud computing arrangements to its 2020-2021 Annual Plan.
Stakeholders have informed the AcSB that there is diversity in the accounting for cloud computing arrangements. In addition, stakeholders have expressed concerns with the accounting outcome for expenditures on implementation activities in an arrangement that is a service contract and the complexity involved in applying existing guidance.
In response to stakeholder input, the AcSB undertook a project to address the financial reporting issues related to cloud computing arrangements for private enterprises and not-for-profit organizations. The AcSB decided to address the issues through an Accounting Guideline because it thinks having the guidance in one location would be simpler for stakeholders and the guidance is specific to cloud computing arrangements. Accounting Guidelines are a primary source of generally accepted accounting principles. They set out how existing Sections shall be applied in specific cases or the Board’s conclusions on other particular issues of concern with respect to financial reporting.