I'm curious to see if anyone has come across the question of how virtual currencies (such as bitcoin) and their change in value should be presented on the balance sheet and income statement? So far there's been no GAAP guidance issued on the topic, but it's becoming an issue with many internet companies that accept bitcoin for payments, as well as those who process / exchange bitcoins. There are also some who have bought bitcoin for investment purposes. IRS issued a notice on the topic (Notice 2014-21), but it only concerns
Accounting for bitcoin
Answers
Anon,
At the moment I'm considering it to be a short term asset. There has been some complaints about this, but I think that on balance it is manageable.
-For sales tax, top line, etc, treat it as a market value transaction. So, if I give you $100 of services, and you give me one bitcoin, my basis is $100 and that drives those calcs. Increase the gross asset value by $100, etc.
-End of period, mark-to-market and show the gain/loss in a non-tax-basis account (managerial
-For tax purposes, you can still capture the weighted average of the coins, and capture the realized gain/loss in a separate account.
Basically, the goal is to meet the IRS guidelines, while still having the ability to show both exposure and potential unrealized gain/loss to shareholders/stakeholders.
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