Hi,
I run an affiliate marketing business, meaning I earn by selling affiliate products that pay me a commission. For this purpose I use websites that I build and then I upload content onto it.
From an accounting perspective, how will I treat my purchases related to Domain Names. I was told by somebody that it needs to be accounted as an "intangible asset".
Should it be an asset or, an expense?
It is an intangible asset and expenses should be capitalised to the extent of development costs as per IndAS . Revenue should be recognised as per IndAS.
Hi Yasaswi,
Thanks for the reply.
It would be really helpful if you could elaborate on this.
I am having difficult accounting for my domains. I have multiple domain names that I own but all of them are purchased for a year, which means that after a year if I do not renew it, they will expire and drop out of my ownership. I develop websites on these domain names inhouse.
How would I account for these domain names if I am to consider them as intangible assets..
Regards
IndAS 38. Appendix A
This Appendix does not apply to expenditure on purchasing, developing, and operating hardware (eg web servers, staging servers, production servers and Internet connections) of a web site. Such expenditure is accounted for under Ind AS 16. Additionally, when an entity incurs expenditure on an Internet service provider hosting the entity’s web site, the expenditure is recognised as an expense under paragraph 88 of Ind AS 1 and the Framework for the Preparation and Presentation of Financial Statements in accordance with Indian Accounting Standards issued by The Institute of Chartered Accountants of India when the services are received.
You have purchased something? Does it contain a legal right? What is it’s treatment is prescribed in IndAS 18-67. I got confused with License renewal, hosting expenses and purchasing domains. I’m not a literate in the legal aspects of your operations, hence the confusion as the treatment is different based on the expense or assets classification.
CAclubindia
