With increasing reliance on a multitude of subscription-based software solutions, public sector entities need to understand GASB 96 and how it will fundamentally change their accounting practices – our Implementation Guide can help.  

What is GASB 96?

GASB 96 provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for public sector entities. It requires them to record a right-to-use subscription intangible asset and corresponding subscription liability. 

According to the Governmental Accounting Standards Board (GASB), Statement No. 96: 

• Defines a SBITA  
• Establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability 
• Provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA 
• Requires note disclosures regarding a SBITA 

Why was GASB 96 issued?

Public sector entities are increasingly using subscription-based IT services, such as Office 365, Zoom, and DocuSign. Contracts for these services, known as SBITAs, have similar traits to traditional leases, and GASB 96 is intended to: 

• Improve comparability in financial reporting by governments (consistency); and, 
• “Enhance the relevance and reliability of a government’s financial statements by requiring a government to report a subscription asset and subscription liability for a SBITA” (transparency). 

Does GASB 96 apply to my organization?

GASB 96 applies to all public sector entities that follow Generally Accepted Accounting Principles (GAAP) in filing their annual financial statements, including: 

• Local government (counties, municipalities, school districts) 
• Higher education (public colleges and universities) 

• Public hospitals and healthcare providers 

Which contracts are within the scope of GASB 96:

To know if GASB 96 is applicable, first you need to determine that the contract is a SBITA. GASB defines a SBITA as: 

A contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.  

A contract may be exempt from GASB 96 if it: 

• Meets the definition of a lease under GASB 87, Leases  
• Falls under the scope of GASB 94, Public-Private and Public-Public Partnerships and availability Payment Arrangements  
• Falls under the scope of GASB 51, Accounting and Financial Reporting for Intangible Assets  
• Is a short-term SBITA, having 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 

When are GASB 96 requirements effective?

The requirements of GASB 96 are effective for fiscal years beginning after  
June 15, 2022 and all reporting periods thereafter.   

How to start GASB 96 implementation?

Complying with GASB 96 can be a time-intensive process, but it doesn’t have to be. Using lease and SBITA management software can help speed up and automate the process, relieving much of the burden from staff. With the right software, users don’t have to be experts in GASB requirements – it’s baked in. 

Civix’s industry-leading  software  was designed specifically for the public sector, and it can help ensure GASB compliance. 

Implementation is as Easy as 1, 2, 3

• Civix’s public sector accounting experts begin by understanding your needs and structures, and then we configure your GASB solution accordingly. 
• Innovative import tools allow you to import all SBITA data at once – easily, quickly, and accurately. Then, all you do is validate it; and you won’t need to do anything else! 
• Civix software can automatically identify and segregate data between what’s required by GASB 96 and what’s not. 

Scalable for Any Agency

• Beyond its ability to simplify compliance, the beauty of Civix’s enterprise solution is that it can scale to meet the needs of states, cities, counties, school districts, and agencies alike. 

Robust Functionality

• With a centralized document center, Civix software allows users to easily locate, access, assign roles to, and monitor electronic documents. 
• It also allows for bulk actions, such as mass updates.  

Bypass Procurement and Get the Best Price

• Contracting vehicles like NCPA and GSA allow members to bypass lengthy procurement processes and get Civix software solutions at the best prices possible. 

What to look for in a lease management and SBITA software solution?

When thinking about GASB compliance, you should choose a software solution that will serve you over the long term with a range of features, such as: 

• Broad Functionality – Choose a software that provides a full spectrum of functionality beyond lease management, such as managing billing and invoicing, tenants, property and space, fixed revenue activity, and accounts receivable. 
• Automated Processes – It should automatically collect data elements within each lease or SBITA to track components that are subject to GASB compliance and apply the established rules. And robust software solutions should incorporate calendarized alerts and event notifications to automate recurring activities. 
• Seamless Integration – Select an application with standard extensible API hub for those that want to integrate with their general ledger. 
• Configurability – Make sure the system offers configurable landing pages, fields, reports and data sets. 
• Proven Success – Look for a solution that’s been real-world tested and is backed by a team of experts and licensed CPAs. 
• Secure – It should be hosted on a cloud region that is designed to meet the higher-level security and compliance needs for sensitive, dedicated, public sector workloads.  

Of course, Civix offers software with all these features – and more. Our industry-leading Public Sector Business and Revenue Manager (PBRM) is a complete solution for managing government business operations effectively and complying with the requirements of GASB. Our integrated GASB module provides guidance that ensures compliance and manages an organization’s data for GASB 87, GASB 96, and beyond. 

>> Check out our GASB 87 Implementation Guide