Business organizations going into the cloud computing field agreements must decide whether they are purchasing intangible assets, acquiring the right of use, or entering into service contracts. In accounting perspective, intangible assets are products that are not physical in nature; longterm physical investments are plants, properties, as well as equipment.

Because they are not physical in nature, cloud computing software acquisitions are classed as intangible assets, rather than PPE (that is, property, plant, and equipment). To evaluate if cloud computing software constitutes property, plant, and equipment, a company can make use of 2 rules. If cloud computing software gets utilized for providing services and goods, in this case, it is considered a plant, property, and equipment. And cost associated with purchasing the software exceeds $100000, therefore, it is considered property, plant, and equipment. It is an intangible asset because the preceding conditions are not satisfied. As a result, cloud computing software is categorized as property, plant, as well as equipment as an intangible asset depending on its cost.

Overall, plant, property, and equipment are assets which are projected to provide economic gains and revenues for a long time. Purchasing plant, property, and equipment shows that a company believes in its longterm prospects as well as profitability.