is subscribing to SaaS considered leasing

sunhux
sunhux used Ask the Experts™
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this is likely accounting related query.  since we dont own assets in SaaS, is it treated as leasing?  how do people out there treat it & by what accounting standard?
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JohnBusiness Consultant (Owner)
Most Valuable Expert 2012
Expert of the Year 2018
Commented:
Subscribing to Software as a Service (SaaS) is just expense. It is not a lease in the sense of a long term contract. You subscribe and pay monthly (quarterly, annually) and at the end of the payment term, you can stop paying and stop using the software.

It is just Software Expense on your books of account.
David FavorFractional CTO
Distinguished Expert 2018
Commented:
As John said, Just a simple expense.
JohnBusiness Consultant (Owner)
Most Valuable Expert 2012
Expert of the Year 2018

Commented:
@sunhux - Did you get what you needed here?
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Commented:
last question:

what's the closest accounting standard this would be?
GAAP (Generally Accepted Accounting Principles)?
Business Consultant (Owner)
Most Valuable Expert 2012
Expert of the Year 2018
Commented:
SaaS is just a very standard expense.  Kind of Accounting 101.  GAAPs deal with more sophisticated questions.

https://businessdegrees.uab.edu/blog/5-important-principles-of-modern-accounting/

SaaS would be the same as a utility bill, stationery expense and so on.
JohnBusiness Consultant (Owner)
Most Valuable Expert 2012
Expert of the Year 2018

Commented:
Thanks and I trust you are now clear on SaaS as Expense.

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