Building a Successful Cloud Provider Service: Accounting and Tax Considerations examines the wide-ranging financial reporting and tax implications Cloud Service Providers (CSPs) need to consider to succeed in today’s rapidly evolving cloud marketplace.
Since our first cloud report on these topics in 2009, growing cloud adoption has heightened the importance for CSPs to proactively manage and plan for the accounting and tax issues associated with operating in the cloud.
This publication is focused on the following areas:
- Revenue recognition
- Are cloud arrangements subject to software guidance?
- Separation criteria
- Allocating revenue to separate units of accounting
- Limitations on allocating the consideration
- Timing of revenue recognition
- Accounting for costs incurred to develop, maintain, and deliver cloud services
- Costs to develop internal-use software and website development
- General considerations
- U.S. Federal tax considerations
- Classifying cloud computing transactions
- Sourcing income from cloud computing transactions
- Outbound and inbound tax considerations
- State and local tax considerations
Evolving cloud business models are constantly creating new opportunities and risks. CSPs that proactively manage and plan for the accounting and tax issues associated with operating in the cloud may unlock incremental value for their business models.