Rented model access (third-party LLM APIs)
Metered access to a third-party model you do not control is a hosting service contract. The access fee is expensed as the service is received and is almost never capitalized ASU 2018-15. Only distinct implementation work to integrate the hosted model can be capitalized under US GAAP; under IFRS the IFRIC March 2021 decision generally expenses configuration and customisation IFRIC 2021.
Rented intelligence is a service
When you call an external model API you are buying a service, not acquiring software you control. That fee is operating expense as consumed, or cost of revenue when the model is a direct input to a paid product. There is no intangible asset because you control no software.
No entry
The only capitalizable slice
Distinct implementation and integration work around the rented model can be capitalized under ASU 2018-15 on the internal-use software basis. Under IFRS, that same configuration is generally expensed unless it creates a separate intangible you control IFRIC 2021.
Questions this posts answers
- Does ASU 2018-15 apply to AI inference spend?
- It applies to the arrangement. The metered inference fee is a service expense; ASU 2018-15 only lets you capitalize distinct implementation costs of integrating the hosted model.
Posts to
Primary sources
- [S2] KPMG: Cloud computing implementation costs post ASU 2018-15 (US GAAP)
- [S6] IFRS Interpretations Committee: Configuration or customisation costs in a cloud computing arrangement (IAS 38) agenda decision, March 2021 (IFRS)
Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.