Does your unit incur expenses throughout the year for various types of subscriptions? If so, see below for some tips to keep in mind to ensure proper financial reporting:
- The Governmental Accounting Standards Board (GASB) has issued an accounting statement (Statement No. 96) which outlines parameters surrounding subscription expenses. These parameters must be followed to ensure proper accounting and financial reporting.
- In order to help ensure compliance with these accounting standards, it’s essential that the proper expense account code is used when purchasing a subscription.
- See below for guidance to keep in mind when determining which account code to use on your various subscription purchases:
- 141500, Product or Service Subscriptions : This account code should be used for subscriptions to a product or service which is provided on a recurring basis (excluding software subscriptions).
- 153800, Computer Software : This account code should be used for subscriptions to computer software when the duration of the subscription term is one year or less. In addition, there are also other similar expense account codes in the 153801 – 153807 range if you would like to further categorize your computer software subscriptions to a finer level of detail.
- 153808, Software Maintenance Services : This account code should only be used for the purchase of software maintenance services (not subscriptions to the software itself).
- 153809, Software Subscriptions – Principal : This account code should be used for subscriptions to computer software, which requires inputs of data by the user, when the duration of the subscription term is greater than one year. Since GASB now requires these types of software subscriptions to be capitalized, this account code is used for the principal portion of these payments.
- 153810, Software Subscriptions – Interest : This account code is used for the interest portion of the payments mentioned in the previous bullet.
Contact
For further guidance, reach out to the applicable subject matter experts within either the Lease Accounting or Account Codes section of UAFR’s Who to Ask list.
