An Analysis of Application of Accounting Standards to Computer Software and Website Cost

Today's era is an era of machinery. Therefore, approximately all enterprises use machinery or equipments such as computers, machines for manufacturing, processing, packing etc., for the efficient and expeditious working. As the environment of every enterprise is different from each other, all the enterprises generally use internally generated assets which may benefit themselves. The computer software either acquired or internally generated for the purpose of internal use or a website either developed internally or purchased by the enterprise for the purpose of its internal use in the organization, may be recognized as an intangible asset. An expenditure incurred in respect of developing a website should be charged as an expense to the period to which it relates unless such expenditure comes under the purview of recognition criteria. Companies are incurring significant costs to develop Internet web sites. These companies may be "Internet" companies, traditional "brick and mortar" companies, or service companies. The web sites may be used to promote or advertise products or services supplant manual processes or services, sell products (including software) or services, or to do a combination of all three. Further, due to rapid changes in technology, new uses for web sites are being developed. Diversity in practice exists in accounting for website development costs. Some entities capitalize website development costs, others expense such costs, and still others capitalize some of those costs and expense the rest. Hence, the issue is how an entity should account for costs incurred to develop a computer software or website. N. Sharadha | Prof. V. Manickavasagam"An Analysis of Application of Accounting Standards to Computer Software and Website Cost" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-1 , December 2017, URL: http://www.ijtsrd.com/papers/ijtsrd8281.pdf http://www.ijtsrd.com/management/accounting-and-finance/8281/an-analysis-of-application-of-accounting-standards-to-computer-software-and-website-cost/n-sharadha