This GASB 96 example covers accounting for a two-year $20,000 annual payroll software subscription starting January 1, 2023, with a 4% discount rate. Initial liability is $39,231, and adding $3,000 in capitalized implementation costs results in an initial asset of $42,231. Preliminary and operational costs are expensed. Journal entries record the right-of-use asset, liabilities, subscription payments, amortization, interest, and reclassification of liabilities. Month-end entries capture amortization and accrued interest. EZLease setup includes entering term, payment schedule, implementation costs, and borrowing rate to ensure accurate classification and compliance.

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