IFRIC final agenda decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) published in an addendum to March 2021 IFRIC Update

In its meeting held on 16 March 2021, IFRIC had finalised its agenda decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets).

In accordance with the Due Process Handbook, the IASB discussed the agenda decision in its April 2021 meeting and did not object to the agenda decision.

The final agenda decision is now published in an addendum to the March 2021 IFRIC Update.

The agenda decision provides guidance on accounting by a customer for costs of configuring or customising a supplier’s application software in a Software as a Service (SaaS) arrangement.

The Committee considered following questions when analysing the issue:

• whether, applying IAS 38, the customer recognises an intangible asset in relation to configuration or customisation of the application software; and
• If an intangible asset is not recognised, how the customer accounts for the configuration or customisation costs.

The IFRIC Update may be accessed here.