CAF-6 · Chapter 12 · Question 10 of 15
A company is developing a corporate website solely to provide information about its products and company history (an electronic brochure). How should the development costs of this website be treated according to SIC 32?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Expensed immediately as incurred.
Explanation
If a website is solely for promotional or advertising purposes (i.e., it cannot generate direct revenues like an e-commerce site), it does not demonstrate probable future economic benefits under SIC 32, so costs are expensed.
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