Cloud computing arrangement
A cloud computing arrangement, or CCA, is a hosting arrangement in which a customer accesses software running on the vendor's infrastructure. Where the arrangement is a service contract rather than a software licence the customer controls, ASU 2018-15 governs when the arrangement's implementation costs may be capitalised.
Service contract versus licence
If the arrangement includes a software licence the customer controls, it is accounted for as an intangible; if it conveys only a right to a service, it is a service contract ASU 2018-15350-40-15. Most hosted AI tooling and managed model endpoints are service contracts.
Implementation costs
For a service-contract CCA, qualifying implementation costs are capitalised on the internal-use software model and amortised over the arrangement term; the recurring service fees are expensed ASC 350-40350-40-25.
- S4FASB Accounting Standards Codification, PwC Viewpoint (US GAAP). https://viewpoint.pwc.com/dt/us/en/fasb/GAAP/Codification/Codification/228073.html
- S5ASU 2025-06 on internal-use software costs, BDO (US GAAP). https://arch.bdo.com/new-asu-on-internal-use-software-costs-guidance