What are Implementation Costs?
Implementation costs are the expenses incurred to get a SBITA ready for use. These may include:
- Configuring the software
- Integrating it with other systems
- Testing and troubleshooting
- Data migration
- Training necessary personnel
These costs occur after the preliminary project stage (when options are being evaluated) and before the subscription term begins.
GASB 96 requires governments to capitalize implementation costs, meaning they are recorded as an asset on the balance sheet and then amortized (expensed) over the life of the subscription. This treatment aligns with how capital assets are handled, even though the government doesn’t own the underlying software.
What’s important here?
Implementation costs are a critical part of SBITA accounting under GASB 96. When governments identify and capitalize these costs correctly, governments can stay compliant, improve transparency, and better reflect the true value of their technology investments in financial statements.
