GASB proposes guidance for subscription-based IT arrangements

Cloud and remote-access computing are growing more popular.

State and local governments would account for subscription-based information technology arrangements under many of the same provisions they use for lease accounting under a proposal published by GASB.

Subscription-based IT arrangements have become increasingly popular in recent years, and stakeholders have asked GASB about the proper accounting for, and reporting of, cloud computing and other remote-access software application and data storage that are subscription-based.

Existing GASB guidance addresses on-premise computer software that is either internally developed or acquired through perpetual licensing arrangements. Subscription-based IT services are a category unto themselves, however, and the recently issued guidance is meant to reduce confusion over the accounting for these services.

The exposure draft proposes applying many of the provisions of GASB Statement No. 87, Leases, to the subscription-based arrangements.

The proposal would take effect for fiscal years beginning after June 15, 2021, and all reporting periods thereafter. Early application would be encouraged.

Comments can be submitted through Aug. 23 by emailing director@gasb.org.

  • New proposal for partnership arrangements. GASB proposed new guidance that it said is intended to improve accounting and financial reporting for public-private and public-public partnership arrangements (both referred to as PPPs) and availability payment arrangements (APAs). The proposal includes definitions for PPPs, service concession arrangements, and APAs. Comments are due Sept. 13 and can be emailed to director@gasb.org.

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