Capitalize or Expense

Juliewinters · #1 Jan 6, 2008, 01:55 PM

If a company incurs alot of development expenses relating to setting up their website through which they do their business, can you capitalize these expenses or doyou have to expense

CaptainForest · Jan 14, 2008, 03:31 PM

It depends on many factors, but you could do either perhaps.

Questions about the materiality for one thing. Did the website cost $200,000 for a company that is worth only 1million? In which case, you should probably capitalize.

Or if it costs 10,000, you could really make a case for either or.

Juliewinters · Jan 15, 2008, 04:54 AM

Well it's an internet startup company, which hasn't started trading yet. But the value of website development is about £50K.



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