How to Account for Website Development – Part 5

August 4, 2014

So far in this series, we have covered general guidance and general information relating to the costs associated with website development in part 1, discussed costs related to website planning activities in part 2, discussed costs related to development of website applications and infrastructure in part 3 and graphical development in part 4. The next stage to be examined is development of the website content.

This stage often involves incurring costs in order to input the content that was premeditated for during the planning stage.

Developing the content of the website

Typically, content includes such items as contact information, photos/images, articles, maps/directions, Church worship service times, Foundation grant information, and other textual or graphical information to be included on the website. It is important to note that content does not have to be internally developed and therefore may be externally obtained or provided by a third party. The content will reside in either the website code itself or on a separate database that is assimilated with the website by using software.

Accounting treatment:  US GAAP does not provide for unique accounting in regards to website content development. On the other hand, the costs related to the initial input of the content into the website is capitalized but ongoing regular inputs are expensed as incurred as that is considered maintenance.

As mentioned in part 3 of this series, data conversion should be also be expensed as incurred (there are exceptions so please see part 3 for details).

The software used by the Organization to assimilate or integrate external databases into the website should be capitalized.

If you feel you have a unique scenario and need help deciding how to account for your website please feel free to contact us.  Part of our job is to help you help yourself. This concludes part 5 of the series; stay tuned for more in this series.