GASB 96 - Subsequent Measurement

After initial recording of the Subscription Asset and Subscription Liability, the asset should be amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT Asset. 

• Amortization should begin at the commencement of the subscription term
• This amortization is recorded as an outflow of resources 
• Record interest on the remaining liability
  • This is the discount rate divided by 12 and multiplied by the remaining liability. This is recorded monthly and reduced when payments are made.
• Record short and long-term liability adjustments to account for the liability due in the next 12 months

Modifications & Terminations

• Includes amendments and partial terminations
  • This will include changes that allow for additional access to underlying assets or increasing in payments. Also includes changes to the index or rate on which variable payments depend
  • If an SBITA terminates early, we’ll reduce the carrying value of the Subscription Asset and Subscription Liability and recognize a gain or loss for the difference