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Accounting for cryptocurrencies



Standard crypto currencies

This Sunday I organized a short webinar regarding accountancy principles of recording crypto currencies based on Estonian and IFRS principles.

The biggest confusion what people have is that crypto should be recorded as cash or financial instrument. No, no, no!


Crypto currencies are not meeting neither cash, neither financial instruments criteria, therefore there are 2 scenarios:

1. if crypto is held for sale purpose, then such crypto currencies should be recorded as inventories (FV less cost).

2. If it’s held for investment purposes then those ones are recorded as intangible asset (FV or cost principle). Fair value revaluations are recorded via income statement (in case of decrease) or comprehensive income (in case of increase).



Exceptions

There are some exceptional cases when crypto currencies can be recorded as financial instruments. It is allowed, if crypto meets financial instruments criteria (IFRS 9).

In some cases, particular tokens give discounts for some particular goods. Such tokens are recorded as prepayment of those goods.


Video & Article

I have made more detailed article on this topic. Article can be found at accountant's magazine: Russian article & Estonian article (coming soon).

Lecture on accounting for crypto currencies can be found here (available in Russian language).


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