Bitcoin – Its Economics for Financial Reporting

Tan, Boon Seng; Low, Kin Yew

doi:10.1111/auar.12167

Cited by 64 publications

(81 citation statements)

References 2 publications

(3 reference statements)

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“…1.. If it does not fall under the scope of IAS2 as inventory/commodity (either at lower of cost or net realisable value at fair value less cost to sale in the case of a trade-broker), or under IAS 21 as a currency(Sullivan, 2016), then an entity-specific accounting policy shall be developed especially for speculative and long-term investments into gold.…”

mentioning

confidence: 99%

Accounting for Bitcoin and Other Cryptocurrencies under IFRS: A Comparison and Assessment of Competing Models

Procházka¹

2018

IJDAR

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The invention of blockchain technology has radically changed the perception of how monetary systems can be structured and operated. Central banks and state authorities mostly refuse to acknowledge that cryptocurrencies are money, yet the number of payment transactions using cryptocurrencies is increasing and cryptocurrencies form a non-negligible stake of wealth. As with other economic phenomena, cryptocurrencies shall be addressed in the financial statements of the entities using them, albeit without any accounting guidance in current financial reporting standards. This paper fills this void by suggesting, comparing, and assessing potential accounting models under IFRS. Based on evidence from literature review, as well as recent time-series data on the price volatility of cryptocurrencies, the paper shows that fair value accounting is the most relevant source of useful information for users of financial statements when cryptocurrencies are acquired for investment purposes. Furthermore, the paper identifies scenarios under which cryptocurrencies shall be treated as (foreign) currencies, even though financial system regulators do not consider cryptocurrencies as being money (fiat currency).

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mentioning

confidence: 99%

Accounting for Bitcoin and Other Cryptocurrencies under IFRS: A Comparison and Assessment of Competing Models

Procházka¹

2018

IJDAR

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“…In regard to currencies, these can classically be called commodity money, which has an intrinsic value, or fiat money, which has no intrinsic value. Radford (1945, as cited in Tan & Low, 2017) explains that even cigarettes, if they had the characteristics of standardization, portability, durability, divisibility, and wide acceptance in the market, could be considered commodity money, and so representatives of money, as has in fact occurred in situations involving prisoners of war.…”

Section: Currencymentioning

confidence: 99%

Accounting for bitcoins in light of IFRS and tax aspects

Grecco¹,

Neto²,

Constancio³

2020

Rev. contab. finanç.

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This essay presents recommendations in regard to accounting for operations that involve bitcoins, in compliance with the International Financial Reporting Standards (IFRS), and analyzes their main tax aspects. There is no specific pronouncement on the part of the International Accounting Standards Board (IASB) or from the Brazilian Accounting Pronouncements Committee (CPC) regarding the accounting treatment to be applied in operations that use these currencies. Bitcoin is of interest to economists as a virtual currency with the potential to disrupt existing payment systems and even monetary systems. This essay offers a contribution for standard-setters and the tax authority (fisco) by providing the basis for possible guidelines to be issued on the accounting treatment of bitcoin operations, as well as by defining the appropriate tax treatment; in addition, it makes a contribution for accounting professionals by suggesting the accounting policy to be adopted in these operations. Here, the analysis of the characteristics of bitcoins is compared with the guidelines and concepts of IFRS, in order to elaborate the recommendation for accounting treatment, and it suggests that the most adequate procedure would be that of foreign currency, which would go against the tax treatment adopted up until now by the Brazilian Internal Revenue Service (Receita Federal) or the Internal Revenue Service (IRS) of the United States of America (USA), which suggest treating virtual currencies as goods and not as currencies. It warrants mentioning that this contradiction may cause tax risks for taxpayers.

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“…This topic has gained only recent attention with few studies in the area, however, the expert judgement team sees substantial research potential in this area. The paper by Tan and Low () is one of the earlier papers on this topic and applied accounting principles to the issue of the financial reporting of bitcoin transactions. The authors argue that the accounting treatment of Bitcoin varies with the reporting entity because of the principle of faithful reporting.…”

Section: Output–expert Judgementmentioning

confidence: 99%

Machine Learning and Expert Judgement: Analyzing Emerging Topics in Accounting and Finance Research in the Asia–Pacific

Cai

Linnenluecke

Marrone

et al. 2019

Abacus

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In this paper, we focus on the question to what extent machine learning (ML) tools can be used to support systematic literature reviews. We apply a ML approach for topic detection to analyze emerging topics in the literature-our context is accounting and finance research in the Asia-Pacific region. To evaluate the robustness of the approach, we compare findings from the automated ML approach with the results from a manual analysis of the literature. The automated approach uses a keyword algorithm detection mechanism whereby the manual analysis uses common techniques for qualitative data analysis, that is, triangulation between researchers (expert judgement). From our paper, we conclude that both methods have strengths and weaknesses. The automated analysis works well for large corpora of text and provides a very standardized and non-biased way of analyzing the literature. However, the human researcher is potentially better equipped to evaluate current issues and future trends in the literature. Overall, the best results might be achieved when a variety of tools are used together.

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Bitcoin – Its Economics for Financial Reporting

Cited by 64 publications

References 2 publications

Accounting for Bitcoin and Other Cryptocurrencies under IFRS: A Comparison and Assessment of Competing Models

Accounting for Bitcoin and Other Cryptocurrencies under IFRS: A Comparison and Assessment of Competing Models

Accounting for bitcoins in light of IFRS and tax aspects

Machine Learning and Expert Judgement: Analyzing Emerging Topics in Accounting and Finance Research in the Asia–Pacific

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