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Treatment of development cost of mobile app

Hi, we are about to launch a mobile app that provides the user the ability to keep a diary of their outdoor-related activities, including GPS tracking/locations, photos, etc. and the users will be able to share it.  We are an outdoor sports apparel/footwear company.  This app will have our name on it but will not take any orders or directly market any of our products.  We will not be charging a fee for this app.

to me, this is a digital-age form of institutional advertising and should be expensed. i'd love to hear your thoughts on this--is it capitalizable or is it an expense?

thank you

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I agree, it should be an expense.

What you have created is a 2012 version of an advertising gimmick, or give-a-way, just like any other promotion.

Anonymous
(Retail Controller) |

thanks Wayne, I appreciate it!

CV Sudarshan
Title: Sr. Executive
Company: Gorilla Expense
(Sr. Executive, Gorilla Expense) |

I would consider it an expense since there is no planned future economic value for this app.

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