Accounting and Taxation of Virtual Currencies
Type of Presentation
Event
Location
D34000
Start Date
4-1-2016 1:00 PM
End Date
4-1-2016 1:15 PM
Abstract
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.
Presentation File
wf_yes
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.
Other Presentation Disciplines:
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.