Forecast For Cloud Service Providers: More SEC Scrutiny

Law360, New York (August 12, 2013, 4:25 PM EDT) -- Cloud computing service providers face significant challenges in determining their proper revenue recognition model. IBM’s recent announcement of an ongoing U.S. Securities Exchange Commission investigation into its cloud-related revenue recognition practices is an indication that the accounting for these arrangements has gotten the attention of regulators — and at a time when cloud services are becoming widely embraced across industries. With the proliferation of cloud computing services and complex accounting rules, many technology companies may soon be impacted by increased scrutiny from the SEC.

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