Software and business websites: Accounting Guide – PMI.it

For the correct accounting and tax treatment, an enterprise should distinguish between purchases of basic software and application , while for the business website is the discriminating use ( showcase site, e-commerce, portals integrated ): it explains the operational note 11/2015 of the Roman Academy of Accounting. The document stresses the importance of the theme of fiscal discipline to apply:

“the use of software and business websites, with full of ‘ digital age, is almost indispensable requirement for almost all the economic entities “

stressing that proper accounting of costs is not easy from the operational point of view, especially in view of:

“several features that can specifically describe these cost components.”

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Software

The accounting treatment varies according to the type:

• basic software : procedures and programs necessary for the operation of the PC. Classic example, operating systems;
• application software: programs that allow the machine to perform specific functions based on the demanding precise. Examples: word processors, databases, spreadsheets, and so on.

basic software is an essential requirement for the hardware, and then the acquisition cost is considered in conjunction with that of the PC on which it is installed, einsieme which is capitalized as “additional expenses”. Technically, it falls within the scope of ‘ UCI 16 , “ Immobilization materials “. On the fiscal criteria for the determination of the amortization are those provided by ‘ article 102 of the Consolidated Income Tax Act (the Consolidated Income Tax Act). Depreciation can start, together with the asset to which it relates, after the entry into productive function, and must be briefed on the duration of the tax year, or if less than 12 months. If the unit cost is higher than 516,46 euro, is allowed full deduction of acquisition costs in the year they were incurred.

Application Software speech It is more complex. Here are the different tiplogie, with the resulting tax treatment:

• software acquired under ownership or license to use indefinitely: it must be registered as assets , under the item BI3 between “ Industrial patents and intellectual property rights “, following the instructions contained within the OIC 24 “Intangible assets”. For tax purposes, the criteria of determination of depreciation provided by ‘ Article 103, paragraph 1 of the Income Tax Code . The annual quotas of amortization may not exceed 50% of the total cost;
• software product internally and legally protected: the same treatment described above;
• software purchased as a license to use temporary : The license is recognized in the balance sheet under BI4 “ Concessions, licenses, trademarks and similar rights” . The duration of amortization, in accordance with Article 103, paragraph 2 of the Income Tax Code, is related to the period of the license. Depreciation starts from the moment the cost is budgeted. It ‘possible that there is a periodic fee, in this case the costs are charged to the income statement in accordance with the principle of competence;
• self-produced software for internal use and not legally protected : costs are charged to the statement of CNTO actual incurred. If the programs are used for a number of years, the costs are capitalized and disclosed under BI7 “Other intangible assets”.

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Websites and portals

Here the situation is more complex, because the civil law and the national accounting standards do not contain specific provisions on the costs incurred for the creation of corporate websites, and there is not even a tax law ad hoc. In general, the treatment cost depends on the features of the site. Here are the different types:

• Site showcase , which is made with the sole purpose of describing the company’s business activities: the costs are similar to those of ad and are expensed in the year they are incurred. To be included as assets, must be exceptional and non-recurring, and represent a reasonable expectation of economic returns for the company. Only in the event that these costs (advertising) are similar to those of plant and ammpliamento (requires a close correlation cn the launch of new products, or by opening a new plant), They may be included as an asset instead BI2 “ Research, development and advertising “. amortization must be made within five years. For tax purposes, the relevant law is Article 108, paragraph 2, of the Income Tax Code. And ‘finally can, if the only purpose of the site is to provide a positive image of the company, considering the Costic ome costs representation. In this case, the cap is not allowed, while tax-deductibility is governed by Article 108, paragraph 2 of the Income Tax Code and the total non-deductibility of VAT remains.

• ecommerce website : in this case, the site is an e-commerce platform, which then relates to the business of the company. The fiscal and accounting treatment will be the same as that of application software acquired by way of property, development costs are recognized in item BI3 “ Industrial patents and intellectual property “. However, if the site is an expansion of the business in ways previously not pursued, the costs must be reported under the heading BI1 between “ costs and expansion ”
• enterprise portals integrated : a hypothesis is frequent, in which the site integrates with management systems and other business functions. In this case, the total cost of the different components must be separated: if the site is contracted out to third parties, you must ask the person in charge of carrying a letter certifying the portion of cost attributable to the showcase site and that instead concerns the management. The costs of maintenance and management (periodic updating of content, server maintenance) are recognized in the income statement as incurred. There is an international practice for the management of Web sites that makes it clear that the costs represent a ‘ self-produced intangible assets , subject to the rules of IAS 38, which excludes the possibility of entering in the assets charges for sites with advertising function.