Effective immediately, the Governmental Accounting Standards Board (GASB) 87 lease question has been updated within the Contracts+ contract request form and Purchase Requisition Form in iBuy to include acknowledgement of the presence of subscription-based IT arrangements for GASB 96 reporting.
Here Is Why
All state/local government agencies, including public universities throughout the United States will be required to implement a new subscription-based IT arrangement accounting standard issued by the GASB effective July 1, 2022. The University of Illinois System has hundreds of active subscription-based IT arrangements, such as software and vendor network access.
Currently, payments for subscription-based IT arrangements are classified as an expense. Effective July 1, GASB requires these payments to be broken out between principal and interest, with few exclusions. These arrangements will actively be tracked by University Accounting and Financial Reporting (UAFR) and amortized over their term.
What you need to do
UAFR has begun reviewing active subscriptions to identify what falls under this new standard. In order to identify all future arrangements, it is essential that university units identify any subscription-based IT arrangements when making requisition or contract requests through Contracts+ and iBuy.
Effective immediately, please begin selecting this option when applicable to ensure that UAFR is notified of any subscription-based IT arrangements and that future payments are recorded to the appropriate account code. The University of Illinois System must be compliant with GASB’s new reporting requirement.
Contact
To avoid consequences of non-compliance, any questions regarding this new process can be addressed by the following contacts:
Danielle Stoner, CPA
University Accounting and Financial Reporting
Financial Accounting & Reporting Analyst
dstoner@uillinois.edu
217-300-1631
Courtney Englehardt, CPA, MSA
University Accounting and Financial Reporting
Associate Director of Financial Reporting
hampton2@uillinois.edu
217-244-8739
