Guidance on Accounting for Software as a Service (SaaS)

The guidance document above sets out updated Crown accounting policy and implementation guidance for the treatment of access fees and software configuration and customisation costs in Software as Service (SaaS) arrangements, also known as cloud computing arrangements.

The update was required because two IFRIC* agenda decisions were published (one in 2019 and one in 2021), which focus on how entities should account for the costs of software provided by a supplier in a SaaS arrangement. 

All entities within the Government Reporting Entity that report to the Treasury for the purposes of preparing the financial statements of the Government, including forecast financial statements, using Crown accounting policies must apply these updated SaaS accounting policies: 

  • for the first time in the preparation of entities’ five-year fiscal forecasts for Budget 2022, and
  • subsequently for the annual financial statements for the year ending 30 June 2022 and reporting periods beyond that.

The requirements/guidance also includes one section specifically for departments in relation to appropriation, baseline and Budget 2022 implications (refer Section 6).

*International Financial Reporting Interpretation Committee of the International Accounting Standards Board (IASB).