Can Website Development Cost Be Capitalised?

A website is a significant business investment, and how you account for it affects both financial statements and tax liability.

Whether development costs are capitalised or expensed comes down to whether they create long-term value. Here is how to categorise them correctly.

The costs involved

Website spend breaks into design and UI/UX, development and coding, hosting and domains, ongoing maintenance, and marketing and SEO.

Each behaves differently for accounting purposes — the split matters.

Capitalise vs. expense

Capitalising records a cost as a balance-sheet asset and amortises it over time. Expensing deducts it immediately, cutting current taxable income.

Costs that create long-term value typically qualify for capitalisation; short-lived costs are expensed.

What GAAP and IFRS allow

Website costs may be capitalised when they generate long-term revenue. Initial development usually qualifies; routine maintenance does not. Internal-use sites follow different rules than customer-facing ones.

Capitalisable costs

Planning and research that feeds the build, direct development and coding, and testing, debugging, and deployment.

Costs to expense

Routine maintenance, updates, and patches. SEO, copywriting, and marketing campaigns. Hosting, domain renewals, and security certificates.

Benefits and risks

Capitalisation smooths cost over time, improving profitability ratios and unlocking depreciation benefits.

But overcapitalisation inflates assets and can misstate financial health — and invite regulatory scrutiny. Keep detailed records and follow GAAP or IFRS.