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Dandylion1
Level 1

Web design an asset or an expense?

We are a start-up and need clarification on accounting for the expenses associated with the design of our new web site.  I understand the website itself is a fixed asset and is listed on the Balance Sheet.  The payment made to the web designer shows up on the Cash Flow.  But what about the P&L?  Should the expense (payment made to web designer) appear there as well?

2 Comments 2
Kurt_M
QuickBooks Team

Web design an asset or an expense?

Rainflurry
Level 15

Web design an asset or an expense?

@Dandylion1 

 

When you record a cost as a fixed asset, it resides on the balance sheet and has no impact on your P&L.  If it's recorded as an expense, it will impact your P&L.  There is some uncertainty within the tax code as to the exact treatment of website design costs so the best way to record this, IMO, is to assign all of the costs (bills and/or payments) to a 'Website' fixed asset account and then allow your CPA/tax accountant to determine the appropriate classification and make any adjusting entries.

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