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Crypto currency

22 January 2018

What is the method of treating the bit coin in the balance sheet that the bit coin is treated as an asset under which head it has to be disclosed?

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2 Replies

Sowhar (Sys. Admin) (27 Points)
Replied 02 August 2020

A single plan has not yet been developed according to which Bitcoin will be recorded on the balance sheet. Most often, four variants of events are considered:

1. Recorded as cash. That is, it includes cash on hand and demand deposits. Digital money clearly does not fall into these categories, due, at least, to its high volatility and non-physical form. But thanks to some amendments, this can be done.

2. Non-monetary financial assets. It is currently not possible to directly apply this standard, since the owners of cryptocurrencies do not have certain contractual rights. However, you can think about entering into forward contracts with the help of cryptocurrencies, similar to those that are now concluded with banks to insure currency risks, or other contracts like a derivative.

3. Intangible assets. The standard defines an intangible asset as an identifiable non-monetary asset that does not have physical substance. On the one hand, the cryptocurrency meets this standard, but you need to keep in mind that it must have an exact initial value, and this requires a stable cryptocurrency market.

And the last fourth method is the most unoriginal. Use currency calculators to withdraw bitcoins into real money and register them already.

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uraniumman (WebDev) (22 Points)
Replied 06 August 2020

Originally posted by : Sowhar
	A single plan has not yet been developed according to which Bitcoin will be recorded on the balance sheet. Most often, four variants of events are considered: 1. Recorded as cash. That is, it includes cash on hand and demand deposits. Digital money clearly does not fall into these categories, due, at least, to its high volatility and non-physical form. But thanks to some amendments, this can be done. 2. Non-monetary financial assets. It is currently not possible to directly apply this standard, since the owners of cryptocurrencies do not have certain contractual rights. However, you can think about entering into forward contracts with the help of cryptocurrencies, similar to those that are now concluded with banks to insure currency risks, or other contracts like a derivative. 3. Intangible assets. The standard defines an intangible asset as an identifiable non-monetary asset that does not have physical substance. On the one hand, the cryptocurrency meets this standard, but you need to keep in mind that it must have an exact initial value, and this requires a stable cryptocurrency market. And the last fourth method is the most unoriginal. Use currency calculators to withdraw bitcoins into real money and register them already.