Innovative Accounting and Audit of the Metaverse Resources

Abstract

Active use of virtual electronic information environments – metaverses is the most perspective way of information and communication technologies development. In the meta-environment, traditional accounting objects undergo significant changes due to their intangible interpretation, which requires improving their accounting and auditing reflection. Accordingly, the purpose of this study is to improve the methodology and organization of accounting and auditing in the metaverse in terms of identification, recognition, and reflection in the accounting system of non-current intangible assets, goodwill of IT companies, NFT (non-fungible tokens), cryptocurrencies, sales costs and other objects in the meta-environment. To implement the purpose of scientific research, systemic, innovative, and institutional approaches and economic and mathematical modelling, bibliographic and comparative analysis have been used. Given the significant public distrust and active threats in the digital business, the need to introduce an audit in the metaverse to ensure the reliability, integrity, and legitimacy of information flows is justified. The possibility of recognizing from the standpoint of accounting and auditing of all virtual tools and objects of work that carry out the cycle in the meta-environment in the form of NFT, assets due to: uniqueness and separation from other accounting objects; opportunities for free purchase (sale) in the meta space, potential economic value in the case of retention and accumulation; reliable determination of value based on costs, sales contract or expert (market) assessment. It is proposed to classify NFT according to the criterion of useful life on non-current and current assets with the appropriate reflection in the composition of non-current and current intangible assets. The prospects of personalized marketing promotion of products (goods, services) in the metaverse with separate accounting of costs for the sale of tangible and intangible objects to ensure the reliability, analytical, and comparability of accounting information have been defined. As a result, a conclusion was formed on the expediency of transforming the reporting structure of meta-environment enterprises in terms of increasing the share of intangible assets and the potential absence of any tangible assets in terms of the full transfer of financial and economic activities in a virtual environment. The order of structuring the reporting of the enterprises of the metaverse needs further research.

Valuation, Accounting Principles, and Classification of Assets in the Metaverse

“…The importance of regulatory clarity and transparent governance frameworks in the metaverse is highlighted by Accountant 4. This aligns with Flores-Galea [24] and Zadorozhnyi et al [3] findings that emphasize the role of effective governance mechanisms in shaping virtual environments. These frameworks are essential for defining ownership rights, ensuring transactional transparency, and resolving disputes, ultimately fostering trust and confidence among users and investors.…”

“…The literature suggests that the emergence of the Metaverse poses significant challenges for accounting and auditing practices, primarily due to the inadequacy of traditional standards in capturing the complexities inherent in virtual assets [3]. Pandey and Gilmour [7] and Zadorozhnyi et al [3] advocate for the development of new accounting standards specifically designed to address the unique characteristics of virtual assets, such as their intangibility and transferability. These calls for new standards reflect the growing recognition within the academic community of the limitations of current accounting practices in accurately valuing and reporting virtual assets within the Metaverse.…”

“…The categorization and reporting of assets originating from the Metaverse present remarkable hurdles due to their intangible and virtual nature [3,25]. These challenges are exacerbated by the absence of a regulatory framework and the diverse legal jurisdictions within the Metaverse.…”

“…Valuation methods play a critical role in determining the worth of assets and liabilities in any financial system. However, the unique characteristics of the Metaverse pose challenges in applying traditional valuation methods [3]. Unlike physical assets, virtual assets in the Metaverse are intangible and can be easily replicated or modified.…”

“…Asset classification is another crucial aspect of financial reporting. A robust classification system is necessary to categorize assets originating from the Metaverse and ensure their accurate representation in financial statements [3]. The classification system should consider the nature of virtual assets, their underlying technologies, and their economic characteristics [8,11].…”