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GASB 96 - SBITA Term

This article covers subscription term and other relevant factors for SBITAs

Subscription Term: Period in which a government has a non-cancelable right to use the underlying IT assets, plus:
  • Government's option to extend if it is reasonably certain
  • Government's option to terminate if it is reasonably certain it will not exercise 
  • SBITA vendor's option to extend if it is reasonably certain
  • SBITA vendor's option to terminate if it is reasonably certain it will not exercise

Periods where the government and SBITA vendor have an option to terminate without permission from the other party are considered cancelable and excluded from the term.

Fiscal funding or cancellation clause: Allows a government to cancel a SBITA (typically annually) if the government did not appropriate the funds for the subscription payments. This type of clause should affect the subscription term only if reasonably certain.

At commencement, access all relevant factors:

  • Contract based
  • Underlying IT Asset based
  • Market-based
  • Government Specific
  • Economic Incentive