IFRS/IAS on Cloud-Based Solutions Expenses or Capitalized?
International Financial Reporting Standards (IFRS) do not contain specific guidance on cloud-security practices which lead to diversity in practice. This was recently resolved by the IFRS Interpretations Committee. Frank Richter at KPMG explains the Committee’s decisions.
Cloud-based software ranges from simple application software to complex solutions like enterprise resource planning (ERP) systems. Complex solutions usually involve significant implementation costs. The accounting depends on whether the cloud-based software classifies as a software intangible asset or a service contract.
For software intangible assets, the requirements of IAS 38 Intangible Assets apply. For the latter, the IFRS Interpretations Committee (IFRS IC) developed specific principles to determine the accounting for each individual implementation service (or cost). Questions to consider are:
- Who is performing the implementation service?
- Is the implementation service distinct from the access to the software?
- Does the expenditure give rise to a separate intangible asset under IAS 38?
When do you need to apply the decisions made by the IFRS IC?
If your existing accounting policy needs to be amended, it will trigger a change in accounting policy, meaning that you will need to apply the new rules retrospectively. This requires adjusting the opening balance of equity for the earliest prior period presented and comparative amounts for each prior period presented as if the new accounting policy had always been applied.
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Die Implementierungskosten für Cloud Computing-Vereinbarungen können erheblich sein – Unternehmen müssen analysieren, ob diese Kosten bei Anfall als Aufwand erfasst oder aktiviert werden müssen. Die Entscheidung des IFRS Interpretations Committee («IFRS IC») vom März 2021 stellt klar, wie diese Analyse für Implementierungskosten durchgeführt wird, die in einem Cloud-Servicevertrag anfallen – d.h. wenn der Kunde keine Kontrolle über einen immateriellen Vermögenswert (Software) hat.