Why the Contract Execution Date Matters
While the subscription term (the period the software is in use) typically begins later (when the organization gains control of the software) the execution date is still important. It marks the official commitment to the agreement and can impact:
- Timing of implementation activities
- Planning for budgeting and resource allocation
- Internal control and documentation requirements
However, GASB 96 does not require recognition of a subscription asset or liability at the execution date–recognition begins when the subscription term starts.
What's Important Here?
The contract execution date marks when a SBITA becomes legally enforceable, even though financial reporting under GASB 96 begins at the start of the subscription term. Understanding this distinction helps organizations manage timelines, plan implementation efforts, and maintain compliance with documentation and audit requirements.
