Mechanics

Term length and amortization

The posting

The commitment term drives the schedule. A prepaid unwinds over the period the committed capacity is consumed, and a capitalized asset funded by that commitment cannot have a useful life longer than the term. A three-year deal supports at most a three-year unwind or amortization, regardless of how long you hope the asset lasts IAS 38-97.

The term sets the ceiling

Two schedules flow from the term: the prepaid unwind and, for capitalized capacity, the amortization. Both are capped by the term. Stretching amortization past the committed period assumes benefits you have no contractual right to.

Schedule across a three-year term

Posts to

Amortization and useful life
Commitment vs consumption
Spend: reserved GPU commitment
Spend: committed-use discount

Primary sources

[S5] IFRS Foundation: IAS 38 Intangible Assets (IFRS)
[S1] KPMG: Hot Topic: Accounting for internal-use software (ASC 350-40) (US GAAP)

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