As more public sector organizations use the cloud for their IT needs, subscription-based software agreements have increased.
GASB Statement No. 96 (GASB 96) responds to these changes by providing guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs).
GASB 96, which applies to all state and local government entities, including higher education, public hospitals, and public healthcare providers, drastically changes how organizations need to account for SBITA contracts. Like the recent leasing standard GASB Statement No. 87 (GASB 87), the new guidance requires significant effort to implement the standard and maintain compliance going forward.
Considering the ongoing maintenance needed for GASB 87 and GASB 96 compliance, governments might reconsider their workflow processes and technology solutions for relevant accounting and financial reporting.
A look into GASB 96 details can help public sector organizations determine their next steps.