Accounting for cloud computing – common but complex

Accounting for software held in the cloud is complex and can be treated as a lease, intangible asset or service contract, but what is the best approach under IFRS, ask Glynnis Carthy CA (SA) and Rachel Farris FCA CTA

It is becoming more and more common for software used by businesses to be hosted on remote servers rather than installed locally. The question then arises as to how this software, and the costs associated with it, should be accounted for.

In this article, we look at some of the key International Financial Reporting Standards (IFRS) accounting considerations in these situations.

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