Website development costs
Apply IAS 38 and the relevant interpretation to determine whether an internally generated website qualifies for recognition. Research-phase, training and routine operating expenditure are generally expensed; development-phase costs may be recognised only if all applicable recognition criteria are demonstrated. A website developed primarily to promote and advertise an entity’s products and services does not meet the relevant future-benefit criterion in SIC-32. Assess facts rather than capitalising all costs by label.
Worked example
A company develops a website solely to advertise its products. It expenses the relevant development expenditure under SIC-32 rather than recognising an intangible asset merely because the website will operate for several years.
Common mistake
Capitalising every website design or marketing cost, or assuming a website has an asset value simply because it remains online.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |