Accounting For Service Contract

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After Update was issued, several stakeholders separately contacted the FASB staff requesting that the Board provide additional guidance on accounting for implementation costs incurred in a cloud computing arrangement that is considered a service contract, due to the diversity in practice..Customers should carefully evaluate costs related to this type of contract to determine whether the costs should be expensed or capitalized, depending on the specific services that are provided. The FASB intended for customers to account for licenses of software they acquire as intangibleets under the new guidance..