Website costs can only be recognised as internally developed software (IDS) assets if the expenditure satisfies the definition and recognition criteria specified in AASB 138 Intangible Assets (AASB 138) and meets the requirements of Interpretation 132 Intangible Assets – Website Costs (Interpretation 132). Under Interpretation 132, where websites are developed solely or primarily for promoting and advertising the entity’s own products and services, all expenditure on developing the website would be recognised as an expense when incurred.
Practical guidance:
It is advisable that entities consult the relevant finance/accounting team and their auditors (where appropriate) for guidance when applying Interpretation 132.
For example
Websites may be developed which promote the entity’s services but also contain program information, online application forms or other registers which will provide ongoing additional revenues or administrative savings to the entity.
Where websites can be capitalised, examples of costs that should be capitalised or expensed in accordance with AASB 138 are outlined in Appendix 1 is available under Tools and templates.
