Gartner Research

Accounting Rule Changes Will Drive Increased Cloud Adoption

Published: 19 May 2014

ID: G00263209

Analyst(s): Darryl Carlton

Summary

In 2017, changes to the accounting rules (FAS13 and IAS17) dealing with leased assets will force organizations to reconsider how they fund IT investments and will make cloud arrangements more attractive. IT leaders need to immediately start looking at how these changes will affect their businesses.

Table Of Contents
  • Impacts

Analysis

  • What's Changing
  • Obtain Independent Financial and Legal Advice

Impacts and Recommendations

  • Where asset control and ownership can be traced to an organization, CIOs must realize that lease arrangements are unlikely to meet the standards for expensing those costs
  • FAS13 and IAS17 will require CIOs to capture and report all lease agreements
  • Multiyear lease arrangements will result in CIOs seeing an increase in the reporting of assets and liabilities on the balance sheet
  • CIOs will be forced to re-evaluate the make/buy and hosting decisions for new application deployments

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