Tag Archives: asset aquisition

The accounting challenges of cloud services

Cloud computing is generally defined as using a shared pool of computing resources accessible via the internet. Those resources can be rapidly acquired as needed, with minimal management effort or service provider interaction.

However, operators who provide cloud services face a number of complex accounting challenges. In particular, bundling cloud services with non-cloud services will likely complicate revenue recognition patterns. Adding cloud services to the equation means operators may face problems in pricing mechanisms and revenue allocation amongst the various elements. There are also re-seller arrangements to consider (in which it is sometimes difficult to determine the principal and agent) thereby making things even more complex. Some arrangements could result in embedded leases, where an operator is providing exclusive use of an asset.

PwC has considered some of the key accounting issues in relation to cloud services offered by operators in a newly issued report: Making sense of a complex world: Cloud computing – the impact on revenue recognition


Real estate trends in Europe: the top six investment markets for 2009 are Munich, Hamburg, Istanbul, Zurich, London and Moscow

A recent report of Urban Land Institute (ULI) and PricewaterhouseCoopers – “Emerging Trends in Real Estate Europe” (now in its sixth edition) provides an outlook on European real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues.

As the report concludes, the top six investment markets for 2009 are Munich, Hamburg, Istanbul, Zurich, London, and Moscow. German markets in general are relatively stronger compared to most other cities in Europe. Istanbul and Moscow are still underserved by high-quality product in many sectors and have better growth potential than all other cities.

London is correcting rapidly and will offer opportunistic plays later in the year. Zurich is a relatively stable market and prospects there have not fallen as much as those in other markets, raising its relative rank. Development prospect ratings place Istanbul in first place, followed by Zurich, Munich, and Moscow. Moscow is rated as the riskiest city, followed closely by Dublin and Madrid.

For individual property types, most of them are viewed as offering “fair” prospects. Retail is the leading major property sector, followed by hotels, mixed use, rental apartments, office, industrial/distribution, and residential for sale, in that order.

The range amongst the top six of these is very narrow and none really stands out. Looking at subsectors, central city office clearly is preferred over suburban office. The concern about quality is reflected in the preference for deep liquid markets and city centre locations.

For more details you may download the full report from:

Global opportunities of crisis

“Crisis is a blessing for countries and people for it magnetizes progress. Crisis is a trigger for great inventions and strategies. Whoever overcomes crisis, overcomes himself.”
Albert Einstein, The Saturday Evening Post, 26 October 1929

Anyone who went through a crisis sometime in his/her life, regardless of its nature, can emphasise Einstein’s words above. Even Plato, in “The Republic,” made this now familiar statement: “Necessity is the mother of invention.” So, let’s take a look at what necessities resulting from this financial crisis might concretize into global opportunities:

  • Humanity is moving towards greater humility, recognising their inter-dependence within the global community;
  • Small to medium size businesses have an opportunity in their ability to reinvent processes in all kinds of economic conditions;
  • For some particular businesses, asset acquisition becomes affordable and tending towards value-for-money over time;
  • The use of advanced technologies may reduce costs and the innovators of these technologies will benefit from the present global crisis in the years ahead;
  • The American, European and Russian crises may be an opportunity to Japan, China and India to improve their global significance. China and India may also remain preferred destinations for capital at the expense of other emerging nations;
  • The ongoing financial crisis may show that the US and US dollar are going to remain significant but they are not going to be the only preferred destination and currency. There is a great opportunity for the Japanese Yen, among others.

Of course, this is just a glimpse on a global perspective of opportunities; the list is endless if we tend to be exhaustive. In future articles, we’ll also take a look at some opportunities closer to particular businesses.