In order to properly account for leases identified during its ASC 842 adoption, Presto purchases a license to a cloud-based lease accounting software system (LeaseAccount). Presto paid a third-party consulting company $90,000 to assist in customizing the Lease Account system and integrating the system with its current internal accounts payable and general ledger software. That is, the lease software, as purchased out of the box was not yet customized to Presto, and Presto incurred costs in integrating and customizing the new software.

Required:

1) Research US accounting standards to determine the appropriate accounting for the fees paid to the consultant, assuming Presto is headquartered in the United States.

2) Research international accounting standards to determine the appropriate accounting for the fees paid to the consultant, assuming Presto has to also file financial statements under international accounting standards with a French regulator.

Write a letter to the president of Presto summarizing your findings and indicating what authority supports your conclusions for both US and International accounting standards. Hint: U.S. and international standards are not aligned on this subject. Specifically, international standards are more general than the U.S. standards. We suggest you research the US accounting standards before researching the international accounting standards. US standards should help you in identifying the international standards.