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GASB 96 SBITA CalculatorSubscription Liability and Subscription Asset

What do these figures come to once the work is shown?

Subscription liability, subscription asset with capitalized initial implementation costs, the outlays expensed and amortization for a government SBITA.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Subscription liability at commencement
$440,770
Subscription asset at commencement
$640,770
Outlays expensed (preliminary project stage and training)
$40,000
Drawn to one scale
Subscription liability at commencement$440,770
Subscription asset at commencement$640,770
Outlays expensed (preliminary project stage and training)$40,000
Interest expense, first year$15,427
Subscription liability after the first year$456,196
Amortization expense per year (straight-line)$128,154
All results
MeasureResult
Subscription liability at commencement$440,770
Subscription asset at commencement$640,770
Outlays expensed (preliminary project stage and training)$40,000
Interest expense, first year$15,427
Subscription liability after the first year$456,196
Amortization expense per year (straight-line)
Over 5 years
$128,154
How this was worked out
Work shownrecomputed as you type
Subscription liability = present value of subscription payments due after commencement
Subscription asset = liability + payments at commencement + capitalizable initial implementation costs - vendor incentives
Preliminary project stage and training costs are expensed
Amortization over the shorter of the subscription term and the useful life of the IT assets

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Subscription liability = present value of subscription payments due after commencement
  • Subscription asset = liability + payments at commencement + capitalizable initial implementation costs - vendor incentives
  • Preliminary project stage and training costs are expensed
  • Amortization over the shorter of the subscription term and the useful life of the IT assets

How it works

GASB Statement 96 applies the lease model to subscription-based information technology arrangements. The subscription term commences when the initial implementation stage is complete (paragraph 15). The subscription asset is the initial liability plus payments made to the vendor at commencement and capitalizable initial implementation costs, less vendor incentives received at commencement (paragraph 25), amortized over the shorter of the subscription term and the useful life of the IT assets (paragraph 27).

Outlays in the preliminary project stage are expensed (paragraph 34), initial implementation stage outlays are generally capitalized (paragraph 35), and training is expensed in every stage (paragraph 39). A SBITA with a maximum possible term of 12 months or less is short-term, and its implementation costs are expensed (paragraph 36). Operation and additional implementation stage outlays follow paragraphs 37 and 40 and are not modeled here.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What happens to payments made before commencement?

Paragraph 26 reports them as a prepayment, reclassified into the subscription asset at commencement. Include them in implementation costs or as a payment at commencement when you enter them here.

When does a SBITA with several modules commence?

Paragraph 30: when initial implementation is complete for the first independently functional module, or the first set of interdependent modules, even if other modules are still being implemented.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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