When it comes to website development, there is often confusion as to whether it should be classified as a fixed asset or an intangible asset. Generally speaking, a website that is developed will be recognized as an intangible asset if it meets the requirements of IAS 38, 57. However, many experts believe that a website can be considered a fixed business asset. All expenses incurred to develop a website for the purpose of promoting and advertising an entity's own products and services are recognized as expenses at the time they are incurred. In order for a website to be recognized as an intangible asset, the entity must be able to demonstrate how the website will generate probable future economic benefits.
If the company expects to benefit financially from the website for several years, then the cost of developing the website can be spread out over that same period of time. The development stage of the application and infrastructure of the website involves the acquisition or development of hardware and software to operate the website. This includes coding, theme development, and other costs associated with website development.
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