SBITA Liability
Category
GASB 87/96
A SBITA liability is the present value of subscription payments expected to be made during the subscription term under GASB 96. It is the IT subscription equivalent of a lease liability, measured at commencement using the entity's incremental borrowing rate.
Why it matters
The SBITA liability represents the total financial obligation for IT subscriptions, discounted to present value. For government entities with dozens or hundreds of SaaS subscriptions, the aggregate SBITA liability can be material and affects fund balance reporting and budgetary analysis.
Lease accounting platforms that support GASB 96 calculate the SBITA liability using present value of subscription payments and maintain it through interest accretion and payment reduction.
How Arvexi handles this
Arvexi calculates SBITA liabilities using the present value of subscription payments, generates amortization schedules with interest and principal components, and produces the journal entries required by GASB 96 for each reporting period.
Explore how Arvexi automates this: Lease Accounting