Event Title

Accounting and Taxation of Virtual Currencies

Location

D34000

Start Date

1-4-2016 1:00 PM

End Date

4-2016 1:15 PM

Description

Bilateral virtual currencies such as Bitcoin are specifically designed to allow consumers to buy goods and services in both real and virtual marketplaces and interact with traditional currencies. Under International Financial Reporting Standards (IFRS), however, virtual currencies should not be reported in an entity's financial statements in the same manner as traditional currencies, because they do not meet the definition of either “cash” or “cash equivalent”. This presentation focuses on several options to account for virtual currencies under IFRS and US Generally Accepted Accounting Principles (GAAP), as well as the implications of several policy declarations on the taxation of activities involving virtual currencies in the United States. I conclude that first, virtual currencies are most closely associated with inventory an entity may keep on hand, and that the rules regarding accounting for inventory allow virtual currencies to be reported fairly and accurately in an entity's financial statements. Secondly, I conclude that the tax consequences of transactions involving virtual currencies depend greatly upon the economic role of the entity in question in the virtual currency transaction.

Comments

Mr. Brian S. Driscoll, is a graduate student in Accounting and Dr. T. J. Wang is an Associate Professor of Accounting in the College of Business.

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Apr 1st, 1:00 PM Apr 1st, 1:15 PM

Accounting and Taxation of Virtual Currencies

D34000

Bilateral virtual currencies such as Bitcoin are specifically designed to allow consumers to buy goods and services in both real and virtual marketplaces and interact with traditional currencies. Under International Financial Reporting Standards (IFRS), however, virtual currencies should not be reported in an entity's financial statements in the same manner as traditional currencies, because they do not meet the definition of either “cash” or “cash equivalent”. This presentation focuses on several options to account for virtual currencies under IFRS and US Generally Accepted Accounting Principles (GAAP), as well as the implications of several policy declarations on the taxation of activities involving virtual currencies in the United States. I conclude that first, virtual currencies are most closely associated with inventory an entity may keep on hand, and that the rules regarding accounting for inventory allow virtual currencies to be reported fairly and accurately in an entity's financial statements. Secondly, I conclude that the tax consequences of transactions involving virtual currencies depend greatly upon the economic role of the entity in question in the virtual currency transaction.