Skip to content Menu

The Governmental Accounting Standards Board (GASB) has issued an exposure draft (ED), Additional Proposal for Implementation Guidance Update-2023, that adds one new question and answer (Q&A). The Q&A covers subscription-based information technology arrangements (SBITA). NACUBO submitted a comment letter requesting changes to the Q&A item.

Question 4.10 of the ED addresses whether cloud computing arrangements meet the definition of a SBITA. The proposed guidance states that such an agreement may or may not be a SBITA, depending on whether the agreement conveys control of the right to use the service provider’s underlying IT assets.

NACUBO expressed concern that GASB’s answer obscures the key point they were trying to make: that cloud computing arrangements fall within the scope of GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The Q&A discussion of the control criterion results in additional confusion, not increased clarity. We proposed that the question be modified to succinctly state the key issue, and that the answer begin with the statement that cloud computing arrangements fall within the scope of Statement 96.

In addition, our comment letter suggests that an additional Q&A item be added to the implementation guidance to more clearly define the term “underlying IT assets.” We also suggested that GASB provide additional clarification noting that the notion of control must be determined within the context of the contract.


Chris Leach

Accounting Policy Analyst


Related Content

FASB Issues Accounting Standards Update on Leases

The ASU only applies to institutions without any public debt.

FASB Issues Proposed Guidance on Crypto Assets

FASB recently issued a proposed Accounting Standards Update addressing the accounting for and disclosure of crypto assets.

Department of Education Seeks No-Cost Extension for HEERF Funds

The Department of Education will make a no-cost extension form available to grantees needing up to an additional 12 months to spend remaining HEERF balances.