More than half of public company executives say their organizations are in the cloud now (53.9%) and an additional 25.5% say their organizations will move into it in the year ahead, according to a January 2020 Deloitte poll. Yet, just 33.7% of public company executives say their organizations have begun to implement the Financial Accounting Standards Board’s (FASB) cloud computing accounting standard — mandatory for cloud-using U.S. public company financial reporting for fiscal years started on or after Dec. 15, 2019 based on current guidance.
Read Also: SalesTech Star Primer: What Is Lead Generation?
“Before the FASB cloud accounting standard took effect, cloud service arrangement costs had an immediate impact on earnings that sometimes affected the timing of cloud investments. But, once the new standard is adopted, it should reduce immediate impact on earnings by deferring some costs that will now be recognized as assets and amortized over the period of service,” said Chris Chiriatti, Audit & Assurance managing director, Deloitte & Touche LLP. “Some companies may find that the FASB standard could help accelerate cloud investment timing by easing budgetary constraints previously posed by near-term impacts to key financing metrics. Implementing the right processes to properly identify and account for cloud related costs is critical.”
Read Also: How to Increase Your Brick-And-Mortar Sales Without Risking Profit Margins
Sean Torr, Deloitte Risk & Financial Advisory managing director, Deloitte & Touche LLP added, “Because cloud computing decisions can sometimes be made fractionally across an organization, the new accounting standard is a good reason for IT and finance teams to meet and work more closely to get organized and take advantage of what the standard offers. Approaching cloud economics or cloud cost optimization without financial and IT leaders at the table may not only result in a sub-optimized economic view of a cloud deployment, but may also complicate an organization’s compliance efforts.”
Read More: Videos For Sales Outreach? Yes, Please!
