Stay Informed
iLeasePro Newsletter

Expert Knowledge to Your Inbox - SignUp Now!

GASB 96: Understanding Subscription-Based IT Arrangements (SBITAs)


GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs), was issued in May 2020. The statement establishes guidelines for state and local governments for accounting and financial reporting of subscription-based information technology arrangements (SBITAs), which are essentially cloud computing and other IT service arrangements.

GASB 96 is effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Early application of the statement is encouraged.

GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs), provides guidance for state and local governments on accounting and financial reporting for subscription-based information technology arrangements. This statement was issued in May 2020 and addresses the accounting treatment for cloud computing and other IT service arrangements in the public sector.

The main specifics of GASB Statement No. 96 include:


  1. Definition: GASB 96 defines a Subscription-Based Information Technology Arrangement (SBITA) as a contract that conveys control of the right to use a vendor's IT software, alone or in combination with tangible capital assets (such as hardware), as specified in the contract, for a period of time in an exchange or exchange-like transaction.

  2. Capitalization: GASB 96 requires governments to capitalize subscription-based IT arrangements as right-to-use subscription assets, which are intangible assets, and recognize a corresponding subscription liability. This treatment is similar to the approach used for leases under GASB Statement No. 87.

  3. Measurement: The initial measurement of the subscription asset should be based on the total subscription liability, which includes the present value of future payments for the SBITA, plus any one-time payments made at the beginning of the contract, minus any incentives received from the vendor.

  4. Amortization: The subscription asset should be amortized over the shorter of the SBITA's useful life or the contract term, including any options to extend if it is reasonably certain those options will be exercised.

  5. Recognition of outflows: Outflows of resources (e.g., implementation costs) incurred by the government in a subscription-based IT arrangement should be recognized as expenses, unless they meet the criteria for capitalization.

  6. Disclosures: Governments should provide note disclosures in their financial statements related to the SBITA, including a general description of the arrangement, the total amount of the subscription asset, and the total amount of outflows of resources recognized for the arrangement.

GASB Statement No. 96 is effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Early application is encouraged.




Related: iLeasePro Free Trial, iLeaseXpress, iLeaseXpress Unlimited, ASC 842 Financial Reporting, ASC 842 Balance Sheet Reporting, ASC 842 Income Statement Reporting, ASC 842 Cash Flow Reporting, ASC 842 Statement of Shareholder Equity, ASC 842 Disclosure Notes, ASC 842 Management Discussion, ASC 842 Comprehensive Income, ASC 842 Glossary of Terms, ASC 842 Journal Entries, ASC 842 Software, When Is the ASC 842 Compliance Date, FASB Lease Accounting Software, Understanding the New FASB ASC 842 Lease Accounting Standard, How Does a Lease Balance Sheet Change After the New Standard?, Tracking Lease Details After ASC 842, Deferred Rent Explained Under the ASC 842, Guide to Lease Classification, Overview of Relevant Borrowing Rate, ASC 842 Footnote Disclosure, Lease Accounting, What Does Lease Accounting Software Do?, Key Features of A Lease Accounting Software, How to Never Miss Important Lease Dates, Scaling Your Lease Accounting Software to Your Business Needs, How to Select the Right Lease Solution, How to Set Up Lease Accounting Software, What is the Best Lease Accounting Software?, Overview of the Types of Leases, Equipment Lease Software, How the Right Lease Management Software Makes Equipment Leases Easier, Lease Tracking Software, How The Right Software Can Help You Manage Lease Data, Five Benefits of a SaaS Lease Management Solution, A Centralized Lease Portfolio Making Asset Management Easier, Lease Analysis 101, Lease Analysis: The Financial Metrics, Lease Abstraction, The Importance of Lease Abstraction for Lessees, The Lease Data an Abstract Should Include, What Software Do I Need for Lease Abstracting?, Navigating The ASC 842 Accounting Audit, Ultimate Lease Accounting Audit Checklist, Essential Guide To Engaging Auditors, Leveraging AI for Enhanced Year-End Audits Transitioning to the ASC 842 Standard Lease Document Management ASC 842 Short-Term Leases Practical Expedients Lease Modifications & Remeasurements Lease Variable Payments Embedded Leases Monitoring Critical Lease Dates Transportation - Navigate the ASC 842 The Impact of the ASC 842 on Regulatory Policies in Lease Management & Lease Accounting Integrating Lease Accounting into Your Month-End Closing Process The Modified Retrospective Approach in ASC 842 Determining the Incremental Borrowing Rate