Required Financial Statement Disclosures for SBITAs
Governments must include the following information in their financial statements when reporting SBITAs:
1. General Description
- A brief overview of significant SBITAs
- The basis, terms, and conditions of the arrangements
2. Total SBITA Assets
- The value of the subscription asset recognized on the statement of net position
- Any accumulated amortization of the asset
3. Short-Term vs. Long-Term Liabilities
- The portion of subscription liabilities due within one year
- The portion due after one year
4. Interest Expense
- Total interest expense recognized during the reporting period related to SBITAs
5. Amortization Expense
- Total amortization of subscription assets during the fiscal year
6. Other Payments Not Included in the Liability
- Disclosure of variable payments, termination penalties, or other costs excluded from the SBITA liability6. Other Payments Not Included in the Liability
7. Future Scheduled Payments
- A table of principal and interest requirements for each of the next five years, and in five-year increments thereafter
Why These Disclosures Matter
- Transparency: Stakeholders can clearly see the organization’s ongoing IT-related obligations.
- Audit Readiness: Proper disclosure helps ensure compliance with GASB 96 and supports a clean audit.
- Long-Term Planning: Full visibility into software subscription commitments aids in budget forecasting and cash flow planning.
- Comparability: Standardized disclosures allow for meaningful comparisons across entities and reporting periods.
What's Important Here
GASB 96 requires detailed financial disclosures for SBITAs to improve visibility into software subscription obligations. Organizations must report asset values, payment schedules, amortization, and interest expenses, among other details.
For government and nonprofit teams, staying compliant with these disclosure requirements is important to maintaining transparency, audit readiness, and informed decision-making.
