The cost of creating, designing, developing, and programming a website is typically included in capital assets. This includes any hardware purchases needed to support the development of the website, which will follow existing capitalization policies. This stage includes the design of the site with backgrounds, fonts, frames, and buttons. All of these costs will be included in the balance sheet and amortized.
When creating a completely new website or adding significant new functionality to an existing website, these costs are considered capital expenditures. Generally, the cost incurred for creating, designing, developing, and programming a website will be treated as a capital asset. It's also the time when the company can purchase all the hardware needed to support the website. These purchases will follow existing capitalization policies and be included in the balance sheet and amortized.
Graphics involve the general design of the web page (use of borders, background and text colors, fonts, frames, buttons, etc.) that affect the appearance of the web page and generally maintain consistency regardless of changes made to the content. To determine if website design is a capital expense or a revenue expense, you need to be clear about the terms. If capital allocations work better than special treatment (allowing you to get a deduction more quickly), you can choose to use capital allocations instead. When using a third party to design, develop, create and program a website, it will be treated in the same way as computer software.
This means that all costs associated with creating a website will be capitalized.