ACCOUNTING FOR PROPERTY ACQUISITIONS – RIGHT-TO-USE SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (SBITA) - 8632.1

Governmental Accounting Standards Board (GASB) Statement No. 96 establishes uniform accounting and financial reporting requirements for subscription-based information technology arrangements (SBITAs). GASB Statement No. 96 reporting is effective for the fiscal year ending June 30, 2023. For information on SBITAs, see SAM Section 8615.5. For detailed information on reporting SBITAs, see the State Controller’s Office’s GASB 96 Reporting Instructions webpage.

Short-Term SBITA

A short-term SBITA is a SBITA that, at the commencement of the subscription term, has a maximum possible term under the lease contract of 12 months or less, including any options to extend, regardless of their probability of being exercised. Because the term is 12 months or less, no capital asset is recognized, and the subscription payments are expensed in the period incurred.

SBITA

A SBITA is a contract that conveys control of the right to use another party’s (i.e., a SBITA vendor’s) 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 SBITA has a minimum noncancelable contract term greater than 12 months. For information about the measurement and recognition of the right-to-use SBITA asset, see SAM Section 8615.5.