FIRSTMATE BLOG: CAPTAINS LOG

Is Company Branding Expenditure Deductable24.07.2014

Question
Our client, a company, has recently incurred expenditure in relation to developing a company logo and other branding related costs, such as letterheads, business cards, website, brochures and email signatures.

Is this expenditure deductible?

What accounting treatment would you recommend – expense or capitalise?

Answer
In our view, the expenses incurred in developing the logo and the email signature should be treated as intangible assets and should therefore be capitalised.

The expenses are not tax deductible in the normal course of business because the benefit is potentially ongoing.

We note that design concepts, artwork, logos and branding are not depreciable property as they do not have a fixed life and are not expected to decline in value.

However the cost to actually print the letterhead and business cards could arguably be deducted as an advertising expense

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