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To what extent can one consider a domain name and/or website to be an asset vs. liability?

Clearly the people who have websites that do make big profits off of them consider them to be valuable, intangible assets because of the opportunities to earn money and etc.

Not all websites make much money, and some people lose more on a website than they make (by renewing the domain; hosting costs; development costs; etc.). In such a general outlook, would a website and/or domain name be better seen, for the most part, as an asset/liability? How/why?

  • Are you asking if it is an asset or liability for accounting and tax purposes? Or is this more of a philosophical question? – Ben Miller Jan 19 '17 at 3:45
  • I don't believe this is a duplicate, because the other question is asking about treating a website as an asset vs. an expense. This question is asking about assets vs. liabilities. – Ben Miller Jan 19 '17 at 4:13
  • @BenMiller - Fair enough. Retracted. – TTT Jan 19 '17 at 4:24
  • I would call the domain an asset, and the hosting costs etc. operating expenses – Kaz Jan 19 '17 at 9:31
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This depends on your definitions of assets and liabilities.

The word "asset" has a fairly straight forward definition. Generally speaking, an asset in finance is something that you own/control that has economic value. The asset has value because it is generating income for you or because you expect that it will be worth something to someone in the future.

"Liability" is tougher to define, and depends on context. In accounting, a liability is a debt or obligation that is owed. It is essentially the opposite of an asset; where an asset represents something of value that you own, increasing your balance sheet, a liability is a value that you owe, decreasing your balance sheet.

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. It is not a debt.

Many people use the word "liability" informally to refer to a bad asset: something that is losing value or is causing more in expenses than it is generating in income. (See definition #5 on Wiktionary.) With this definition, you might consider a website or a domain name a liability if it is losing money.

Alternatively, depending on your business, you might not consider it an asset or a liability, but an expense instead. An expense is a cost of doing business. For example, if your business is selling something, you might need a website to make that happen. The website isn't purchased as an investment, and it might not have any value apart from your business. It is simply a necessary expense for your business.

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In an accounting position, a domain name would fall under an intangible asset. Copyrights and patents are intangible, while tangible assets would be buildings or land (also known as property, plant, and equipment).


Noting above, you can list it as an expense for personal reasons, but that would be poor classification. Tangible and intangible assets come with expenses such as legal fees and design. In these instances, you would expense the cost, or fee, but add back that value to the tangible or intangible as it would be considered maintenance.

Please read here for tax treatment of a domain name.

Please read here for what an intangible asset is.

Also read here on page 11 for more clarification by IFRS.

  • This question isn't about whether or not to capitalize domain names as an asset; the OP is wondering about assets vs. liabilities. We have a different question about that, and you may want to consider posting this answer over there. – Ben Miller Jan 30 '17 at 21:13
  • That having been said, a domain name does not necessarily have to be considered an asset. For example, I work for a small business, and we have a domain name that corresponds to our business's name. The domain name itself has no resale value; we paid nothing for it, other than the annual registration fee, and if we ever went out of business, we would simply let it expire. It is a business expense; nothing more. – Ben Miller Jan 30 '17 at 21:13
  • @BenMiller Domain names have a resale value. In your case, your domain name is not prominent enough for that to happen. You may have listed it as an expense for a small business, but again, that is a poor classification. The domain name is treated as an intangible asset because it generates revenue externally through ads, or can be sold at a later date. I posted tax treatment because as an expense, you would be lying about its purpose. This was never a capital gain or loss answer. – Liam Jan 31 '17 at 5:49
  • @BenMiller third link states: The Internet site is an intangible asset of the entity. It is an asset of the entity because the entity has control through ownership of the website and expects to generate future economic benefits by selling advertising space on the Internet site. The asset (Internet site) is an intangible asset—it is non-monetary (ie it is neither currency held nor an asset receivable in a fixed or determinable amount of money), does not have physical substance (because it is an electronic website) and it is identifiable (the entity has a contractual-legal right of ownership). – Liam Jan 31 '17 at 5:49
  • If an asset has a value of $0, is it still an asset? :) – Ben Miller Jan 31 '17 at 13:59

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