GASB 96 - Stages of Implementation
GASB 96 implementation involves three stages: the Preliminary Project Stage, where costs like consultant fees for software selection are expensed as incurred; the Initial Implementation Stage, where configuration, coding, testing, and installation costs are capitalized as part of the subscription asset and recorded differently depending on timing relative to transition; and the Operation and Additional Implementation Stage, where maintenance and troubleshooting costs are expensed, but costs to enhance functionality are capitalized, while training costs are always expensed.
Preliminary Project Stage
This stage includes:
- Conceptual formulation and evaluation of alternatives
- Determination of the existence of needed technology
- Final selection of alternatives
Accounting treatment: Expense as incurred.
Example: Cost of a consultant to help in determining which software is right for your government.
Initial Implementation Stage
This stage includes:
- Ancillary charges related to configuration, coding, testing, and installation of the chosen subscription asset
This stage is completed when the subscription asset is placed into service.
Accounting treatment: Capitalized as part of the Subscription Asset.
Example: Costs of migrating data into the software.
- To add this to the Lease Accounting software at transition to GASB 96, enter an Existing Balance on the Lease Payments tab.
- To add this to the Lease Accounting software after transition to GASB 96, enter as an Initial Direct Cost on the Lease Payments tab.
Operation and Additional Implementation Stage
This stage includes:
- Maintenance, troubleshooting, and other activities associated with the government’s ongoing access to the IT assets
Accounting treatment: Expensed as incurred.
This stage also includes increasing functionality or efficiency of the Subscription Asset.
Accounting treatment: Capitalized as part of the Subscription Asset.
Training costs are always expensed as incurred.