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GASB 96 – Subscription-Based IT Arrangements

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The Governmental Accounting Standards Board (GASB) Statement No. 96, subscription-based IT arrangements (SBITAs) is effective for the District’s 2023 year-end.

This Statement’s objective is to require recognition of certain lease assets and liabilities for leases that previously were classified as operating leases based on the payment provisions of the contract. The standard establishes a single lease accounting model that leases are financings of the right to use the underlying asset.

Under this Statement, the government will recognize an intangible asset for the right-to-use subscriptions and the corresponding subscription liability. The subscription liability should be initially measured at the present value of subscription payments expected to be made during the subscription term.

The subscription asset should be initially measured as the sum of the initial subscription liability amount, the payments made to the SBITA vendor before the commencement of the subscription term, and capitalizable implementation costs, less any incentives received from the SBITA vendor at or before the commencement of the subscription term. A government should recognize the amortization of the subscription asset as an outflow of resources over the subscription term.

There is an exception for Short-term SBITAs. Short-term SBITAs have a maximum possible term under the SBITA contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Subscription payments for short-term SBITAs should be recognized as outflows of resources.

classroom with students

Budget adjustments may be necessary with the adoption of GASB 96. New agreements entered in the current year would be recorded as capital outlay and payments on existing arrangements as debt service.

Additional descriptive disclosures are required under the statement, such as the amount of the subscription asset, accumulated amortization, other payments not included in the measurement of a subscription liability, and principal and interest requirements for the subscription liability.

Maner Costerisan’s Education group is monitoring these and other crucial accounting updates.

Please reach out to us if you have any questions on accounting, grants, or funding at

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