The authoritative accounting guidance in Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements (GASB 96), is effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.

This implementation is challenging governments in many of the same ways we were challenged by GASB Statement No. 87, Leases (GASB 87), and in some different ways as well. Like leases, subscription-based information technology arrangements (SBITAs) are often not centrally managed, so just gathering information about contractual arrangements that might be—or contain—SBITAs from multiple departments can be a time-consuming first step. Like for leases, the information necessary to properly classify contracts as being SBITAs or containing SBITA components, to determine the subscription term, and to recognize and measure subscription liabilities and assets, may require legal expertise for interpretation.

But for SBITAs, there is arguably more complexity to measurement of subscription assets than there is for lease assets, as certain development costs are included. The good news is that GASB has already issued a substantial amount of implementation guidance for lessees, much of which can be applied by analogy to governments in SBITAs, and that identifying the additional capitalizable costs has considerable precedent in preexisting generally accepted accounting principles (GAAP) applicable to internally generated computer software, so it will be familiar to some.

GFOA has prepared two examples of SBITAs (available online at as part of GFOA's GASB Resource Center), each based on a different subscription model.

• Publication date: June 2023
• Author: Michele Mark Levine