Prepaid assetIllustrative scenario

A $2M/yr reserved GPU commitment, posted line by line

The posting

The buyer's exact case: a $2M per year reserved GPU commitment over three years. At signing it is a prepaid asset, not a $6M expense. As capacity is drawn down it unwinds to cost of revenue, expense or a capitalized build. Every figure below is an illustrative example, not client data, to show the shape of the postings ASU 2018-15.

At signing

Assume the first year is prepaid at $2,000,000. Book the advance as prepaid compute; nothing hits the P&L yet because nothing is consumed.

Prepaid assetIllustrative example, not client data

CapEx / Balance sheet

OpEx / P&L

DrPrepaid compute (asset)$2,000,000

CrCash$2,000,000

Year 1 prepaid at signing. Illustrative example, not client data.

As capacity is drawn down

Say 60% of the year's capacity serves production inference for a paid product and 40% funds an internal build in its development window. Release the prepaid accordingly.

SplitIllustrative example, not client data

CapEx / Balance sheet

OpEx / P&L

DrSoftware asset (intangible)$800,000

DrCost of revenue$1,200,000

CrPrepaid compute (asset)$2,000,000

Year 1 consumption split 60% COGS / 40% capitalized. Illustrative example, not client data.

Prepaid unwinds across the three-year term

US GAAP vs IFRS

Under US GAAP the capitalized 40% follows ASC 350-40-25 gated by ASU 2025-06. Under IFRS the same portion is capitalized only if the IAS 38.57 development criteria are met IAS 38-57; otherwise it is expensed, so the split can differ between frameworks.

Posts to

Primary sources

Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.