08 - 116 Subscription-based IT Agreements


This document sets forth system-wide standards for financial accounting and reporting of subscription-based IT agreements (SBITA) as set forth by Statement No. 96 of the Governmental Accounting Standards Board (GASB 96) to ensure that the policies and procedures related to financial accounting and reporting of SBITA are documented, communicated, clearly understood, and consistently applied.


This policy applies to all component institutions of USNH.


GASB 96 defines a SBITA as a contract that conveys control of the right to use another party’s information technology (IT) software, alone or in combination with tangible capital assets (the underlying assets), as specified in the contract for a period of time in an exchange or exchange-like transaction. Control over the use of the SBITA asset means that USNH has:

  • The right to obtain the present service capacity from use of the underlying asset
  • The right to determine the nature and manner of use of the underlying asset.


Beginning with July 1, 2022, all SBITA agreements will be recorded as described in this policy. GASB 96 does not apply to the following:

  • Contracts with an initial subscription term of 12 months or less not including optional periods
  • Perpetual licensing arrangements

Contracts that include the right-to-use combination of both IT software and tangible assets that meet the definition of a lease, should be accounted for under the significant component (component with most value) and do not need to be bifurcated. (Example - a computer with operating software or a smart copier that is connected to an IT system, whichever asset, physical or IT, is of more value will determine if Right of Use asset is GASB 87 or GASB 96 respectively.)


A department that wishes to enter into a SBITA agreement of more than one year must contact USNH Contract Office (under USNH Procurement Services). If the agreement is to be charged to or to fund a sponsored program, departments need to request approval from the Support Team for Administration of Research (STAR) prior to contacting the USNH Contract Office. USNH Procurement staff will work with campus Finance and Administration Officers and/or the USNH Treasury office, legal counsel for review and approval of SBITA agreements. In certain circumstances, additional approval may be required from the USNH Board of Trustees for certain agreement that may have a significant impact to USNH’s debt profile. Any relevant IT needs and security assessments are still required.


1. Reporting requirements. USNH Procurement Services will provide access to all SBITA agreements to USNH Financial Services for USNH FOC accounting to (a.) determine the appropriate recording of each agreement based on accounting standards (b.) accumulate data for disclosure in the annual audited financial statements, and (c.) track outstanding agreement commitments system-wide for management information purposes.

2. Accounting impacts. USNH Accounting FOC will recognize a right-to-use asset and a subscription liability at the inception of the agreement. The liability amounts are reduced as payments are made, excluding the interest expense portion of the payments, and the asset is amortized on a straight-line basis over the remaining agreement term.

3. Recording payments. All SBITA payments should be encumbered at the time of contract through the execution of a Banner PO document using account codes provided by USNH FOC Accounting.

Please note that all other campus related IT requirements related to the acquisition of a software still applies.


A comprehensive guide describing detail processes to ensure compliance with GASB 96 is available on USNH Finance Hub.

GASB 96 Decision Tree


Policy Owner: Manager, Accounting and Financial Reporting

USNH FOC Accounting: foc.accounting@usnh.edu

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