AGA Examination 2: Governmental Accounting, Financial Reporting and Budgeting (GAFRB) GAFRB Question # 13 Topic 2 Discussion
GAFRB Exam Topic 2 Question 13 Discussion:
Question #: 13
Topic #: 2
What is the maximum period of subscription-based information technology agreement (SBITA), including any options to extend, that is classified as short term?
According to GASB Statement No. 96 (Subscription-Based Information Technology Arrangements or SBITAs), a subscription agreement is considered “short-term” if the maximum possible term (including renewal options) is 12 months or less.
Short-term SBITAs are not reported as subscription liabilities and are accounted for as outflows (expenses or expenditures) when incurred.
Relevant References:
GASB Statement No. 96 – SBITAs (Issued May 2020)
GASB Implementation Guide No. 2021-1 – Q&A on SBITAs
GFOA Advisory – Cloud Computing and Subscription Agreements
Answer: B. 12 months
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit