Dear Team,
Can v capitalise website development cost? if yes, then please suggest period and asset category.
Regards
Mohini
1 Replies
Ravi Soni
(Executive in Corporate Advisory)
(54 Points)
Replied 17 December 2015
To capitalise an intangible asset, It must meet criteria of Identifiability, Control over resource and Future expected flow of economic benefits.
Paragraph 7 of AS-26 provides computer software as a common example of an intangible asset. A website is another example of an intangible asset. Accordingly, a website developed by an enterprise for its own use is an internally generated intangible asset that is subject to the requirements of AS-26.
However the expenditure incurred during Application & Infrastructure Development Stage will be subject to the applicabilty of AS-10. E.g. Purchasing and developing the hardware.
The depreciable amount should be allocated on a systematic basis over the best estimate of its useful life. The amortisation should commence when the website is available for use. However the amortisation period shall not exceed ten years in any case.
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