accountingMy company just received a promotional credit through the AWS Activate program and I’m unsure on the related accounting procedures. From a taxation standpoint, I believe the only important transaction is expense reduction, so when the credit is applied I’ll just have to record the expense with a matching contra expense account.
However, it’s unclear whether or not I should record any sort of asset with a corresponding credit account now that we have access to this money. I’ve been reading Financial Accounting Standards Board publications and I can’t find anything directly related to this issue. We don’t receive anything unless we incur AWS expenses, so I’m inclined to believe we just track the balance internally and don’t enter anything on the books but I would rather not make the IRS angry. Am I missing something here?
Receiving a credit for AWS is not a taxable event so the IRS isn’t going to care.
From an accounting perspective, I wouldn’t record it at all. When you use up the credit and start actually paying money to AWS you will record your actual expenses, but until then I don’t see any point in recording the credit.
Lot’s of websites have free trials and this is basically the same thing.
If you do want a better understanding of your business expenses long term (or to build up a history of business for something like a Line of Credit) you could account for it on your books as an expense (what was used each month) and a reimbursement income of some kind.
Totally depends on your tax filing methods (Cash vs Accrual) as to what specific category and account these need to report under.
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