Bitcoin – Its Economics for Financial Reporting

Despite its increasing popularity, no official guidance on the financial reporting of Bitcoin transactions has been provided by standard setters, although tax accounting guidance began to appear in 2014. Designed as a decentralised currency, Bitcoin is not intended to become a reporting currency and...

Full description

Saved in:
Bibliographic Details
Main Authors: Tan, Boon Seng, Low, Kin Yew
Other Authors: Nanyang Business School
Format: Article
Language:English
Published: 2017
Subjects:
Online Access:https://hdl.handle.net/10356/83781
http://hdl.handle.net/10220/42811
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Nanyang Technological University
Language: English
id sg-ntu-dr.10356-83781
record_format dspace
spelling sg-ntu-dr.10356-837812023-05-19T06:44:41Z Bitcoin – Its Economics for Financial Reporting Tan, Boon Seng Low, Kin Yew Nanyang Business School Reporting Entity Bitcoin Despite its increasing popularity, no official guidance on the financial reporting of Bitcoin transactions has been provided by standard setters, although tax accounting guidance began to appear in 2014. Designed as a decentralised currency, Bitcoin is not intended to become a reporting currency and will instead complement fiat money. We argue that in the case of Bitcoin the accounting principle of faithful representation requires interpretation of the economic substance for financial reporting that varies with reporting entity: trading firms recognise Bitcoin like a foreign currency and measure the revenue, or expense, at the equivalent amount of the reporting currency and digital currency exchanges recognise Bitcoin as goods in line with tax accounting treatment. An Economica paper by Radford (1945), which describes the use of cigarettes as commodity money in a prisoner of war camp alludes to this economic basis. This paper applies accounting principles to a practical issue and contributes to the process by which standard setters may issue an interpretation. Accepted version 2017-07-06T07:07:11Z 2019-12-06T15:31:56Z 2017-07-06T07:07:11Z 2019-12-06T15:31:56Z 2017 2017 Journal Article Tan, B. S., & Low, K. Y. (2017). Bitcoin – Its Economics for Financial Reporting. Australian Accounting Review, 27(2), 220-227. 1035-6908 https://hdl.handle.net/10356/83781 http://hdl.handle.net/10220/42811 10.1111/auar.12167 202026 en Australian Accounting Review © 2017 CPA Australia. First published in the Australia Accounting Review – http://onlinelibrary.wiley.com/doi/10.1111/auar.12167/abstract;jsessionid=4D5E8BDF6793B4FEB5142CEEED3ED4A4.f04t04. Used with permission. 13 p. application/pdf
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic Reporting Entity
Bitcoin
spellingShingle Reporting Entity
Bitcoin
Tan, Boon Seng
Low, Kin Yew
Bitcoin – Its Economics for Financial Reporting
description Despite its increasing popularity, no official guidance on the financial reporting of Bitcoin transactions has been provided by standard setters, although tax accounting guidance began to appear in 2014. Designed as a decentralised currency, Bitcoin is not intended to become a reporting currency and will instead complement fiat money. We argue that in the case of Bitcoin the accounting principle of faithful representation requires interpretation of the economic substance for financial reporting that varies with reporting entity: trading firms recognise Bitcoin like a foreign currency and measure the revenue, or expense, at the equivalent amount of the reporting currency and digital currency exchanges recognise Bitcoin as goods in line with tax accounting treatment. An Economica paper by Radford (1945), which describes the use of cigarettes as commodity money in a prisoner of war camp alludes to this economic basis. This paper applies accounting principles to a practical issue and contributes to the process by which standard setters may issue an interpretation.
author2 Nanyang Business School
author_facet Nanyang Business School
Tan, Boon Seng
Low, Kin Yew
format Article
author Tan, Boon Seng
Low, Kin Yew
author_sort Tan, Boon Seng
title Bitcoin – Its Economics for Financial Reporting
title_short Bitcoin – Its Economics for Financial Reporting
title_full Bitcoin – Its Economics for Financial Reporting
title_fullStr Bitcoin – Its Economics for Financial Reporting
title_full_unstemmed Bitcoin – Its Economics for Financial Reporting
title_sort bitcoin – its economics for financial reporting
publishDate 2017
url https://hdl.handle.net/10356/83781
http://hdl.handle.net/10220/42811
_version_ 1770564358136397824