Accounting for cryptocurrencies

Dec 2016

A cryptocurrency refers to a form of exchange that does not exist in physical form but only digitally. It is not linked to any physical currency, nor is it backed by any government, central bank, legal entity, underlying asset or commodity. It is now used as a means to make payments for goods and services, to incentivize employees as well as simply held for investment purposes (legality-permitting or not). Cryptocurrencies are initially 'mined' but could subsequently be bought, exchanged, awarded, or granted. Mining cryptocurrencies is a specialized activity and the accounting for such activities warrant further research. This In depth discusses how cryptocurrencies could be accounted for from the non-miner-holders’ perspective. There are a number of potential options to account for them and each option will be discussed in brief, and/or dismissed, recognizing the fact that diversity has already emerged in practice.