Small Business Shared Interest Group

Cryptocurrencies present a unique challenge in financial reporting because they do not fit into traditional categories like cash, cash equivalents, or tangible assets.

Cryptocurrency is also the currency of future, some companies already introduce and accepting Crypto with their clients

how an accountant should treat and report it in FS

many subject can be analyze, it is an open discussion

lets talk about our experience 

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Karine Kamareddine CMA
CFO
Bluering SAL
Beirut
Lebanon
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I saw an article several years ago that said at least one-third of small and mid-sized businesses accept crypto as payment, but I have yet to see this within my own small business client base.  I have heard of a few smaller non-profits that have started implementing policies to accept donations of digital assets, but that's about it so far.  I do agree with you though, it's definitely the wave of the future and understanding the accounting ramifications is very important before jumping in.

FASB (the accounting standard setter in the U.S.) recently came out with new guidance for accounting and financial statement disclosures for crypto assets that will be effective for 2025.  It requires subsequent measurement at fair value with changes in FV recorded in net income.  The assets should be reported on the balance sheet separately from other intangible assets that are not measured at FV.  There are new disclosure requirements as well.  Currently, until this new standard is effective next year, GAAP requires measurement at historical cost less impairment. 

Interestingly, the new standard took a very narrow approach when defining digital assets and decided only to address purchased fungible digital assets.  Many questions remain about the accounting for other types, such as digital assets that a business creates themselves, wrapped tokens, and nonfungible tokens.  I have a feeling the standard setters will be playing catchup for quite a long time when it comes to changes in this industry.

Does anyone else have any experience with small businesses accepting payment in crypto or investing in crypto?  I'd be curious to see how far this has spread into the small business arena.

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Amanda Bernard CMA,CPA,CFE
Director/Manager
Douglassville PA
United States
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💡 Cryptocurrency is indeed a hot topic and the future of financial transactions! As @Amanda Bernard mentioned, the FASB's new guidance is a significant step forward in how businesses will handle crypto on their financial statements. While this new standard will help bring more clarity, it's important to remember that we're still in the early stages. Many aspects of crypto accounting remain uncharted territory.

For now, the key takeaway is that accountants need to stay informed, follow the yellow brick road 🌟 carefully, look out for flying monkeys 🐒 and big pitfalls ⚠️, and be ready to adapt as standards evolve. 📈🔗

@Karine Kamareddine @Karine Kamareddine  and @Amanda Bernard have rightly pointed out that understanding these nuances is crucial before diving in, especially for small businesses. 🌐

As crypto becomes more integrated into business practices, how do you think accounting professionals should balance innovation with the need for regulatory compliance??? 🤔

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Ilya Ilienko, dual MBA, CPA, CMA
Board Member / Director
East Coast - United States
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Original Message:
Sent: 08-19-2024 06:56 PM
From: Amanda Bernard
Subject: Cryptocurrency

I saw an article several years ago that said at least one-third of small and mid-sized businesses accept crypto as payment, but I have yet to see this within my own small business client base.  I have heard of a few smaller non-profits that have started implementing policies to accept donations of digital assets, but that's about it so far.  I do agree with you though, it's definitely the wave of the future and understanding the accounting ramifications is very important before jumping in.

FASB (the accounting standard setter in the U.S.) recently came out with new guidance for accounting and financial statement disclosures for crypto assets that will be effective for 2025.  It requires subsequent measurement at fair value with changes in FV recorded in net income.  The assets should be reported on the balance sheet separately from other intangible assets that are not measured at FV.  There are new disclosure requirements as well.  Currently, until this new standard is effective next year, GAAP requires measurement at historical cost less impairment. 

Interestingly, the new standard took a very narrow approach when defining digital assets and decided only to address purchased fungible digital assets.  Many questions remain about the accounting for other types, such as digital assets that a business creates themselves, wrapped tokens, and nonfungible tokens.  I have a feeling the standard setters will be playing catchup for quite a long time when it comes to changes in this industry.

Does anyone else have any experience with small businesses accepting payment in crypto or investing in crypto?  I'd be curious to see how far this has spread into the small business arena.

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Amanda Bernard CMA,CPA,CFE
Director/Manager
Douglassville PA
United States
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The adoption of crypto and blockchain introduces significant challenges for accountants and regulatory bodies, such as FASB. In response, FASB has implemented a new accounting treatment for crypto under the [Intangible-Goodwill and Other-Crypto Assets (Subtopic 350-60)]. This change reflects the evolving nature of digital assets and the need for updated frameworks to address their characteristics, ensuring accurate financial reporting and compliance within this rapidly developing sector.

Has your organization been involved in any cryptocurrency-related activities? If so, could you please provide details on the nature of these activities and explain how your organization has reported them in its financial statements? 

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Ahmad H. Juma'h, CMA, CPA
Professor of Accounting
University of Illinois Springfield
Illinois, USA
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Original Message:
Sent: 08-19-2024 06:56 PM
From: Amanda Bernard
Subject: Cryptocurrency

I saw an article several years ago that said at least one-third of small and mid-sized businesses accept crypto as payment, but I have yet to see this within my own small business client base.  I have heard of a few smaller non-profits that have started implementing policies to accept donations of digital assets, but that's about it so far.  I do agree with you though, it's definitely the wave of the future and understanding the accounting ramifications is very important before jumping in.

FASB (the accounting standard setter in the U.S.) recently came out with new guidance for accounting and financial statement disclosures for crypto assets that will be effective for 2025.  It requires subsequent measurement at fair value with changes in FV recorded in net income.  The assets should be reported on the balance sheet separately from other intangible assets that are not measured at FV.  There are new disclosure requirements as well.  Currently, until this new standard is effective next year, GAAP requires measurement at historical cost less impairment. 

Interestingly, the new standard took a very narrow approach when defining digital assets and decided only to address purchased fungible digital assets.  Many questions remain about the accounting for other types, such as digital assets that a business creates themselves, wrapped tokens, and nonfungible tokens.  I have a feeling the standard setters will be playing catchup for quite a long time when it comes to changes in this industry.

Does anyone else have any experience with small businesses accepting payment in crypto or investing in crypto?  I'd be curious to see how far this has spread into the small business arena.

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Amanda Bernard CMA,CPA,CFE
Director/Manager
Douglassville PA
United States
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