I have a query. Let’s take the example of the Software development company. They use sales software like LinkedIn sales generator, clutch, etc, and some production-related tools like Jira and Asana. So how can I recognize their subscription costs that are incurred per year and the cost we pay to generate sales? What I understand is
Sales software subscription and the marketing expense that is incurred will be part of the marketing and Advertisement head in the Income statement For production software, their subscription cost will be part of the cost of sales of the income statement.
Subscription costs presumably in the P&L – is that what you are asking? You won’t be preparing a whole P&L in the exam, so I wouldn’t stress about which heading.