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GASB issued accounting and financial reporting guidance Friday for subscription-based information technology arrangements used by state and local governments.

The accounting guidance for these subscriptions, which have become increasingly common in recent years, is included in GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The new standard is based on the rules established in Statement No. 87, Leases.

Statement 96:

• Defines a subscription-based technology arrangement as a contract that conveys control of the right to use a vendor’s software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period in an exchange or exchange-like transaction.