Committed-use discount, savings plans and reserved instances
A committed-use discount trades a spending commitment for a lower rate. Amounts prepaid are a prepaid asset; a pay-as-you-go commitment with a minimum is an executory contract, expensed as the service is consumed with the discount reducing each period's charge ASU 2018-15. The discount is never a standalone asset, and an unavoidable unused minimum can create a loss.
The commitment, not the discount, drives the posting
A CUD is an accounting question about the commitment. If you prepay, you hold a prepaid asset that unwinds as you consume. If you commit to a minimum spend over a term without prepaying, the contract is executory: you expense the service as received, and the discount simply lowers the per-unit charge. Do not book the headline discount as a gain or an asset.
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Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.