Subject: Re: "I've got more programmers than you"
From: "Jonathan S. Shapiro" <>
Date: Sun, 7 Oct 2001 12:19:54 -0400

From an accounting perspective, I believe that the web site and it's
maintainance costs could also be considered fixed infrastructure, as it
contributes no per-unit cost, and you would be maintaining it anyway. In
this case it could be shown on the balance sheet as an operating expense
rather than appearing under COGS.

Any per-unit sale expense, however, definitely has to be booked as a cost of
sale (therefore COGS). This would certainly include any credit card
processing charges, for example (which might not apply to free software, of

Larry, am I forgetting a FASB rule here? Is there some advantage to charging
the cost of web site operations against the COGS category that I am

> No.  In that case COGS would include the costs necessary to operate the
> download site.