The ASU indicates the following regarding the presentation of implementation costs capitalized in a CCA that is a service contract: The ASU specifies that an entity would be required to amortize capitalized implementation costs over the term of the hosting arrangement “on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which the entity expects to benefit from access to the hosted software.” The term of the hosting arrangement should include the fixed noncancellable periods plus renewal periods the customer is reasonably certain to exercise, termination periods the customer is reasonably certain to not exercise, and periods covered by an option to extend (or not to terminate) that is controlled by the vendor. Deloitte Risk & Financial Advisory Amortization of capitalized costs may differ depending on whether a module or component is ready for its intended use and does not depend on the completion modules or components. Certain services may not be available to attest clients under the rules and regulations of public accounting. 33-10762; Update … If there is a distinct good or service (or a bundle of goods or … This message will not be visible when page is activated. For entities with multiple plans that provide aggregated disclosures, the following information for defined benefit pension plans should be disclosed: The projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess … See Terms of Use for more information. Discover Deloitte and learn more about our people and culture. Deloitte & Touche LLP, Paul Pochmara FASB Updates Presentation of Pension and Other Postretirement Benefit Plan Costs. Business Combinations Business Combinations — SEC Reporting Considerations Carve-Out Transactions Comparing IFRS Standards and U.S. GAAP Consolidation — Identifying a Controlling Financial Interest Contingencies, Loss Recoveries, and Guarantees Contracts on an Entity's Own Equity Convertible Debt Current … Please see www.deloitte.com/about to learn more about our global network of member firms. ASU 2018-15 does not change the accounting for the service component of a CCA. The ASU’s changes related to disclosures are part of the FASB’s disclosure framework project, which the Board launched in 2014 to improve the effectiveness of disclosures in notes to financial statements. ASU 2018-14 is based on a proposed ASU issued on January 26, 2016, and discussed in Deloitte’s January 28, 2016, Heads Up.Key provisions of the final ASU are summarized below. ASU 2018-15. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. This box/component contains JavaScript that is needed on this page. For public business entities, the ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods. Eric is a senior consultation partner in the Professional Practice Group at Deloitte & Touche LLP with more than 25 years of experience. When prospective transition is chosen, entities must apply the transition requirements to any eligible costs incurred after adoption. Do not delete! The information currently required by ASC 350-40, which does not contain specific disclosure requirements but instead refers users to other relevant guidance in US GAAP. Taking action against systemic bias, racism, and unequal treatment, Key opportunities, trends, and challenges, Go straight to smart with daily updates on your mobile device, See what's happening this week and the impact on your business. ASU 2018-15 is based on the consensus-for-exposure that the Emerging Issues Task Force (EITF) reached at its January 2018 meeting, which was further deliberated by the EITF at its June 7, 2018, meeting, where the Task Force reached a final consensus for issuance of ASU 2018-15 (see Deloitte’s June 2018 … Heads Up newsletter is a periodic newsletter that analyzes important accounting developments, such as new FASB and IASB pronouncements or exposure drafts. Mandatory effective dates … He leads Deloitte’s revenue recognition subject-matter team and... More. ASU 2018-15 addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. Deloitte has developed a methodology to assist organizations as they transition to the new cloud computing accounting standard. DTTL (also referred to as "Deloitte Global") does not provide services to clients. DTTL (also referred to as "Deloitte Global") does not provide services to clients. Heads Up: Understanding the key provisions of ASU 2018-15, Part of the For Cloud Professionals podcast series. Key Provision 1 – Apply Internal Use Software Guidance The new guidance is effective for public business entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. What is ASU 2018-08 and will it Impact Me? Deloitte Risk & Financial Advisory In a manner consistent with ASC 350-40, ASU 2018-15 requires an entity to apply the impairment model in ASC 360-10-35 to its capitalized implementation costs of a hosting arrangement that is a service contract. 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