Quote:
Originally Posted by profrec  Was debating about getting my text books out but can't be bothered, its been a long day.
I agree with Olebean on this.
Domain names would be treated in the same way as brand names and held as an asset if bought at reg fee they should just be expensed, irrelevent where they are expensed to.
You can only capitalize and show as an asset on the balance sheet at the value you purchased them, you cannot show a domain increasing in value this is the same principle as brand names.
If held on the balance sheet they would be classed (in the books) as belonging to you rather than being rented by you because you hold the risk of ownership. For example you are entitled to renew them first and keep them or if the value drops you take the risk of losing money. This is substance over form principle. |
So you are saying to treat domain names as an expense if itīs low amounts and for higher amounts it should be an asset (intangible). Why could I not treat a 50k domain name the same as a reg fee name and just write it off as an expense?
Quoting someone that I had a PM with:
" If you are trading as a soul trader, or ltd company then the purchase of your domain names should be offsettable against the income through 'trading'. This will be the income due to PPC. It is possible that the domain sales could be treated as income or as capital gains. however if the nature of your business is trading then will probably be the former.
ie, even though a toy company buys the bits for Ģ1 and sells the toy for Ģ10, they don't treat this as a capital gain, this is trading."
Opinions anyone??