Dear experts,
I would like to know in which Schedule the following are categorized for individuals doing business online using websites on domain names:
1. domain name registration/yearly-renewal fees and
2. web hosting fees paid to web-hosting companies.
Should it be like this...
1. intangible assets?
2. business expences?
And what about another scenario where domain names are purchased and sold for good profit. Would it be all expences then?
Thank you.
As it is an annual fees and we have to paid it annualy, it should be treated as business exp. and not intengible assets.
As it is an annual fees and we have to paid it annualy, it should be treated as business exp. and not intengible assets.
As it is an annual fees and we have to paid it annualy, it should be treated as business exp. and not intengible assets.
| Originally posted by : CA Jignesh Kotak | ||
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As it is an annual fees and we have to paid it annualy, it should be treated as business exp. and not intengible assets. |
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Thank you for your reply.
I understand it is a business exenditure. While researching about this I came across the Accounting Standard (AS) 26 (Intangible Assets). I dont know if some of its concepts apply for individuals, but it states the following:
Just quoting a few intersting points here...
| Nature of Expenditure | Accounting treatment |
|---|---|
| obtaining a domain name |
Expense when incurred, unless it meets the recognition criteria under paragraphs 20 and 44 |
| creating, purchasing, preparing (e.g., creating links and identifying tags), and uploading information, either textual or graphical in nature, on the web site prior to the web site becoming available for use. Examples of content include information about an enterprise, products or services offered for sale, and topics that subscribers access. |
If a separate asset is not identifiable, then expense when incurred, unless it meets the recognition criteria under paragraphs 20 and 44 |
| selling, administrative and other general overhead expenditure attributed to preparing the web site for use | Expense when incurred |
|
backing up data, analysing usage of the web site, adding new functions, features and content |
Expense when incurred, unless in content rare circumstances it meets the criteria in paragraph 59, in which case the expenditure is included in the cost of the web site |
Paragraph 20.
An intangible asset should be recognised if, and only if:
(a) it is probable that the future economic benefits that are
attributable to the asset will flow to the enterprise; and
(b) the cost of the asset can be measured reliably.
Paragraph 44.
An intangible asset arising from development (or from the development phase of an internal project) should be recognised if, and only if, an enterprise can demonstrate all of the following:
(a) the technical feasibility of completing the intangible asset so
that it will be available for use or sale;
(b) its intention to complete the intangible asset and use or sell it;
(c) its ability to use or sell the intangible asset;
(d) how the intangible asset will generate probable future
economic benefits. Among other things, the enterprise should
demonstrate the existence of a market for the output of the
intangible asset or the intangible asset itself or, if it is to be
used internally, the usefulness of the intangible asset;
(e) the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and
(f) its ability to measure the expenditure attributable to the
intangible asset during its development reliably.
Can it be applied for preparing ITR 4 ?
| Originally posted by : Ashis | ||
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- for a person who does not have a business or profession, its his personal expense, - for a person who use it for business and profession, its expenses allowed from business and profession.
- Its mere rental of space booked on server, with some features in built, - domain name would go at part of "goodwill" no separate entity of it, coz without your goodwill its value is zero.
- yes, its allowable expense from PGBP |
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thank you
CAclubindia
