The Roman Academy of Accounting, in an operational note, explores the delicate issues related to the accounting and tax treatment of software and business websites. In practical terms the accounting of the related expenses is not, in fact, always easy, requiring an in-depth examination of the technical characteristics of the product. In this context, the paper provides a useful analysis model to guide practitioners in the interpretation of the information provided by the legislation and national and international accounting standards.
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The accounting and tax treatment resulting in the acquisition or development of software and business websites as further discussed in note operative provision. 11/2015 of the Roman Academy of Accounting.
The theme is particularly timely. The use of these instruments, in fact, is an indispensable requirement for almost all the economic players. It is therefore of utmost importance to its rules for accounting and tax law.
However, the recognition of the related costs is presented not easy in terms of operating, according to the different characteristics that in practice these can qualify cost components.
With regard to the first category of goods, the correct diagnosis on the chart of accounts and the tax goes to the distinction between the basic software and application software. The first category includes the procedures and programs necessary for the operation of the processors such as, for example, operating systems (eg. Windows, Mac OS, etc.). The application software, however, are made from the set of procedures and instructions that allow the machine to perform specific functions that can meet the needs of the user.
The installation of the basic software is a prerequisite for the hardware, ie the total of the components of the machine. Its cost, notes the Academy of Accounting, it must therefore be considered together with that of the asset on which it is installed and falls within the scope of the OIC 16 “Intangibles”.
Under for tax purposes, the amortization of the basic software may start together with the asset to which it relates, after the entry into operation in the production process. It must also be briefed on the duration of the tax period if less or more than twelve months.
The discipline of software application is presented, however, more complex. Specifically, for the correct allocation in the budget is necessary to distinguish between the following cases:
– software purchased outright or under license indefinitely
In this If the software has to be entered in the assets, under the item BI3 between “Industrial patent rights and rights to use intellectual property”, following the instructions contained within the OIC 24 “Intangible assets”. Fiscally, in accordance with art. 103 of the Income Tax Code, the depreciation charge can not exceed 50% of the cost incurred.
– software acquired under license for fixed
The license ‘ use of fixed-term must be included in the balance sheet as BI4 “Concessions, licenses, trademarks and similar rights”. In this case, Article 103 paragraph 2 of the Income Tax Code requires that the amortization period is compared to the period during which extends the license.
– Software self-produced for internal use and not legally protected
In the event that the application software is implemented in the company, without requiring the recognition of the legal protection, the costs may be charged to the income statement for the year of actual incurred.
Coming to the second category of properties examined in the document, the Academy of Accounting notes that, in general costs incurred in the development and implementation of the website are to be capitalized, provided that it is demonstrated the usefulness future (for example in terms of increased efficiency and competitiveness) and that can be estimated with reasonable certainty, their recoverability, taking into account the principle of prudence.
However, neither civil law nor the national accounting standards contain specific provisions on accounting and the budgeting of the costs incurred in the development of corporate websites.
On the operational , the treatment of costs in question is closely related to the characteristics of the site, depending on whether the same can be considered as a mere display of the new company (the “brochure site”) – in which case the costs are comparable to the costs of advertising – ie an effective business tool in the conduct of business.
As for the cd “Sites of e-commerce”, instead, the ARR clarifies that its accounting and tax treatment is substantially similar to that relating to the application software purchased outright. The construction costs will therefore entered under BI3 “Industrial patents and intellectual property.” In other cases in which the creation of the website is configured as an expansion of the business in ways previously not pursued, however, the costs must be specified in item BI1 between “costs and expansion”.
The note in question states, finally, as is increasingly common, especially in the presence of reality structured company, the integration of the categories of traditional sites just described, with management systems accessible from the outside (so-called “portals Company “). For the purposes of proper accounting treatment it will therefore be necessary to divide the total cost of the two components. In this regard, in the case of works contract to a third party, the Academy suggests to ask the person in charge of the construction site of a special certification that certifies that division.
By the Editors
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Roman Academy of Accounting, known operative provision . 11/2015
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