In this blog, we look at IAS 38 & your website. IAS 38 is an accounting standard for intangible assets. It is published by the International Financial Reporting Standards IFRS. IAS 38 was adopted in April 2001. It describes the accounting treatment for intangible assets and forms part of asset management. Accounting standards are technical documents. They are the point of reference in the accounting industry. Each aspect of accounting has a standard. IAS 38 sets out the criteria for recognising and measuring intangible assets.
An intangible asset is an asset without physical substance. IAS 38 recognises an asset when certain criteria are met. It also specifies how to measure the carrying amount of the asset. Firstly, the standard defines an intangible asset. Secondly, it sets out the means to recognise the asset. Thirdly, it details how to report the asset and its related expenses.
Further, IAS 38 requires that the business must derive benefit future from the asset. This benefit must flow directly into the business. The business must also reliably measure asset -related costs. Some website related expenses may not be capital expenses. Brands, marketing materials and customer lists that are internally generated are not recognised as intangible assets.
Asset Management for you
Your website becomes a financial investment. It can make your balance sheet look better. A well-designed website is no longer an expense. It even goes beyond marketing. It also becomes a business asset. The only condition is meeting the audit standards. At Creative Sanctum, we do just that. We have a design checklist that we use to ensure that we tick the all boxes. You can use our design report to record your website as an asset in your books. Our checklist and report meet all the IAS 38 audit requirements.
All our costs in your website project are CAPITAL COSTS. Our web development process and costs are in line with parts 57-64 of IAS 38. From proposal through to completion, we cross reference our activities and costs with the IAS 38 specs. The CS team makes your web project audit compliant. We can do this because we understand IAS 38 and we know web design. Creative Sanctum is in the business of online marketing. We know how to maximise benefit for our clients.
Benefits for you
We save you money by lowering your tax bill. We also make your books look better. And, we do great websites too! We start with a review – we’ll look at your site and give you some ideas & cost estimates. Our team firstly looks at your website from a marketing perspective. We look at branding, colour, layout etc. Secondly, we look at your copy content and SEO. Both these aspects are then reworked to meet the IAS check list. This puts us on track for audit compliance.
Quality control is critical. Our internal processes ensure that every IAS 38 compliance need is met. When we complete and handover your website, we give you an IAS 38 checklist. This document then forms part of your audit working paper file. It lists the IAS 38 requirements and shows specifics from your site that speak to audit compliance. Your auditor can evaluate our work and thus verify that all the audit needs have been met.
It’s about working with experts
Creative Sanctum is not only a team of online specialists. We go beyond the usual design, develop & content services. We’re innovative and creative, always looking at ways to better ourselves, our service offerings and the value we add to our clients. We’re also online business experts. Creating IAS 38 compliant websites is another step in our development. It’s a step that directly benefits our clients. We keep up to date with business developments, not just online marketing trends. This why we are one of very few web companies in South Africa that offer this service. Just like you, our business is business too. We’re also always looking for a competitive edge. Basically, if it benefits us, it’s going to benefit you too.
Asset management is not only about stock portfolios and unit trusts. It’s about managing your business assets too. It starts with working with experts. It’s about creating value-adding assets. Finding the right people to work with is not too difficult. Sometimes, you just have to “click here”. The solution is right in front of you. If you’ve read this far, then you know that it’s the right thing to do.
