Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 8 – Leases/SBITAs
Subscription-based IT Arrangements

Agencies must disclose in notes to financial statements the following information about their subscription-based information technology Arrangements (SBITAs) (which may be grouped for purposes of disclosure) other than short-term SBITAs:

• A general description of its subscription arrangements, including the:
  • Basis, terms and conditions on which variable payments not included in the measurement of the subscription liability are determined
    —AND—
  • Existence, terms and conditions of residual value guarantees provided by the agency not included in the measurement of the subscription liability.
• The total amount of subscription assets (and the related accumulated amortization) is disclosed separately from other capital assets. (Disclosed in Note 2).
• The variable subscription payments recognized during the reporting period that are not included in subscription liability.
• Any residual value guarantees that are not included in the subscription liability, including the terms and conditions of the guarantees.
• The present maturity analysis of subscription liability balances:
  • Payments for each of the first five years
  • Payments in five-year increments thereafter
  • Disclose principal and interest separately
• The subscription commitments (other than short-term SBITAs) for which the subscription term has not yet begun.
• The components of any loss associated with an impairment (gross impairment loss less any related change in subscription liability).

For disclosure purposes, subscription liabilities are not considered debt that is subject to the disclosure requirements in GASB 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements.

Note: Agencies are required to submit changes in subscriptions through the LNSS web application.