Company: VSAT
Filing Date: 2025-02-10
Form Type: 10-Q
Source: 0000950170-25-016993
Chunk: 155

Company: VIASAT INC
Filing Date: 2025-02-10
Form: 10-Q
Item: Part I, Item 8
Chunk 155
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 into certain cloud-based software hosting arrangements that are accounted for as service contracts. Costs incurred for these arrangements are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and postimplementation activities. The Company amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in other current assets within the prepaid expenses and other current assets caption, and other assets (long-term) on the Company's condensed consolidated balance sheets.The Company has entered into several cloud computing arrangements that are hosted services contracts mainly as part of projects related to the continuous transformation of technology, integration and implementation of an ERP system. As of December 31, 2024 and March 31, 2024, gross capitalized implementation costs incurred in cloud computing arrangements was $78.9 million and $63.6 million, respectively. As of December 31, 2024 and March 31, 2024 the related accumulated amortization was $15.0 million and $9.5 million, respectively. The Company recognized amortization of capitalized implementation costs of $2.2 million and $5.4 million for three and nine months ended December 31, 2024, respectively, and an insignificant amount and $2.2 million for the three and nine months ended December 31, 2023, respectively.Leases Lessee accountingIn accordance with ASC 842, the Company assesses at contract inception whether the contract is, or contains, a lease. Generally, the Company determines that a lease exists when (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all economic benefits from use of the asset, and (3) the Company has the right to direct the use of the asset. A lease is classified as a finance lease when one or more of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset, (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (5) the asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease is classified as