The second part in the series addresses accounting, tax, and SEC reporting considerations.
As companies consider investing in bitcoin or other cryptocurrencies, their finance and reporting organizations will need to have a clear understanding of the accounting and tax treatments these new assets require.
Prevailing accounting principles were, of course, largely established at a time when digital assets were not yet even contemplated. U.S. Generally Accepted Accounting Principles (GAAP) do not offer specific guidance for the treatment of digital assets, and, to date, the Financial Accounting Standards Board (FASB) has decided not to add a project on accounting for cryptocurrencies. For those reasons, a company’s accounting function must draw on existing U.S. GAAP to facilitate accounting for digital assets.
First, the accounting will be determined by what the company is accounting for. What is it investing in? If a company is not subject to specialized industry guidance, practice