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When is the GASB 96 Implementation Date?

Written by Debtbook Team | Apr 1, 2024 6:11:54 PM

GASB 96 implementation date for municipalities

The new subscription accounting standard, GASB 96, is meant to improve the transparency and consistency of financial reporting for governments that engage in subscription-based IT contracts. It helps governments accurately reflect the financial impact of these arrangements in their financial statements, thereby enhancing the quality and comparability of financial information. The biggest change with GASB 96 is that qualifying subscriptions will be reported on the financial statements

The official implementation date for GASB 96 was June 15, 2022. When governments need to adhere to this new standard depends on their fiscal year start dates. For entities with a reporting period starting after June 15, 2022, their implementation date will be whenever their next fiscal year begins. 

For governments with a fiscal year that begins July 1, the official implementation date was July 1, 2022. Thus, they presented financials that adhered to GASB 96 for the first time when their 2023 fiscal year ended June 30, 2023. Note that in the application, the “GASB 96 Implementation Date” will reflect the last day of the fiscal year GASB 96 was implemented – June 30, 2023 in this example.

For essentially all governments that adhere to Government Accounting Standards Board (GASB) accounting standards, the creation of financial statements based on GASB 96 started with fiscal year 2023. If an entity presents the current fiscal year financials, as well as the previous year or two for comparative purposes, they'll need to restate the financial statements for the previous year(s).

Example:

A municipality that adheres to GASB presents its 2023 fiscal year results, as well as its fiscal year 2022 for comparative purposes, to stakeholders. Its fiscal year starts on July 1; thus, it has a GASB 96 implementation date of July 1, 2022, and it presents its fiscal 2022 according to the new subscription standard. But it must also restate financials for fiscal year 2022 — July 1, 2021, to June 30, 2022, period — as if GASB 96 was in effect for that year. 

What’s important here?

Almost all municipalities will implement GASB 96 on their financials, starting with the date they present their fiscal 2022 financial statements. Most entities will present GASB 96-adhering financials for their fiscal year starting July 1, 2022 or later, but will have to restate financials for previous years if they’re presented for comparative purposes.