20 Domain Name Intangible Asset New

Since a generic domain name only describes a product or service and does not identify a specific company product or service it does not meet the regulation s definition of a trademark.

Domain name intangible asset. In that sense a website or domain name that you own is an asset not a liability because it is something you own that has some value. This removes the trademark qualification however the domain name can still qualify as a customer based intangible and thus would be amortizable over 180 months. If the business that acquired the domain name is a company the corporate intangible assets regime fa 2002 sch.

The domain name is an integral intangible asset essential key element to any dematerialized data flow exchange the domain name became a strategic intangible asset of great value. Domain names as intangible assets whether a domain name is capitalized as an intangible asset depends on how much the business paid for it and how significant the domain name is to the value of the business. The irs has also concluded that the cost incurred to acquire a generic domain name used in the taxpayer s trade or business is an amortizable sec.

If a business purchases a domain name for a nominal amount of money 100 or 500 for example it can immediately expense the purchase. Many people use the word liability informally to refer to a bad asset. It is not a debt.

An intangible asset is an asset that you cannot touch. Depending on the academic works there is a real correlation between the intangible assets quality and the companies economic performance. The issue of the classification of property as expenses or assets intellectual property cannot be easily classified in a company s balance sheet.

This is a situation where the domain name describes a good or service using commonly associated terms. 29 will apply to the cost of the domain name allowing the tax treatment to follow the accounting treatment with a deduction for depreciation if appropriate. Something that is losing value or is causing more in expenses than it is generating in income.

If the domain name is not registered as a trademark and the domain name is generic. Often the market value of an intangible asset is far greater than the market value of a company s tangible assets such as its buildings and equipment. Accounting principles require that intangible assets be reported on a company s balance sheet at cost or less.