FASB addresses accounting for implementing certain cloud-computing arrangements

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By Ken Tysiac

FASB issued a proposed Accounting Standards Update on Thursday that would clarify the accounting for implementation costs related to a cloud-computing arrangement that is a service contract.

The proposal also would add new disclosure rules for implementation costs for internal-use software and cloud-computing arrangements.

In issuing the proposal, FASB is addressing concerns that arose after the board issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customeŕs Accounting for Frees Paid in a Cloud Computing Arrangement. That standard was designed to help companies evaluate the accounting for fees paid by a customer in a cloud-computing hosting arrangement. The standard includes guidance for determining when the arrangement includes a software license.

Several stakeholders asked FASB to provide additional guidance on accounting for costs of implementation activities performed in a cloud-computing arrangement that is a service contract. FASB issued the proposal Thursday to address diversity in practice that arose because existing guidance is not explicit in that area.

Continue reading at Journal for Accountancy

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Microsoft Beats AWS in Cloud Revenues for the First Quarter of 2018

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By Linda Hardesty

Last week Microsoft, Amazon, and Alphabet all reported strong growth in their cloud businesses. Microsoft won the quarter in terms of revenue, compared to Amazon Web Services (AWS), and followed by Alphabet́s Google Cloud.

Microsoft́s commercial cloud revenue for its fiscal third quarter of 2018 was $6 billion, increasing 58 percent year over year. As part of its commercial cloud business, its Azure cloud service revenue grew a whopping 93 percent in the quarter, compared to the same quarter the previous year.

Microsoft CEO Satya Nadella said the intelligent cloud and the intelligent-edge era is here. “We took significant steps this quarter to put this at the forefront of everything we do, realigning our entire engineering organization to accelerate innovation,” he said, according to transcripts.

During the recent quarter, Microsoft also announced Azure Sphere, which uses Linux software to power tiny chips for Internet of Things (IoT) devices. The technology includes three components: a thumbnail-sized micro-controller unit, a Linux-based operating system, and a cloud-based security service.

On the earnings call with investors, Nadella said, “Wére innovating in silicon to help customers realize the promise of a connected world of devices and things. Our just-announced Azure Sphere is a first of its kind highly secure edge solution that combines chip design and IoT operating system and a cloud service to secure more than 9 billion microcontroller-powered devices entering the market each year.”

AWS
For its first quarter of 2018, Amazon reported that its AWS business generated $5.4 billion in revenue, up 49 percent compared to the same quarter last year. Brian Olsavsky, Amazońs CFO, said AWS is seeing an increased pace of new enterprise customers, and they are trying new services. “We are seeing people move more and more of their workflows to AWS and at a faster pace,” said Olsavsky. “And customers are moving databases to AWS as Aurora continues to grow at a very rapid clip.”

Amazon Aurora is a MySQL and PostgreSQL compatible relational database built for the cloud. AWS says it combines the performance of high-end commercial databases with the simplicity and cost-effectiveness of open source databases.

AWS recently announced that the Aurora service is the fastest growing service in the history of the company with tens of thousands of users, a number that has increased by about two-and-a-half times in the last year.

Continue reading at SDXCentral.com

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