Note: This webpage is for informational and illustration purposes only. Nothing on this webpage is intended to be legal or professional accounting advice, and cannot be considered as such by the viewer.

---

Cryptocurrency on a balance sheet

Are you associated with a business that owns cryptocurrency, a financial asset? Have you asked the question “how do you show cryptocurrency on a balance sheet with other company assets?” You can show ownership of cryptocurrency on your balance sheet as intangible asset’s similar to the example balance sheet below:

Note: the amounts shown are fictional and are for illustration purposes only. The values do not reflect the actual values of any cryptocurrencies.

Or perhaps shown a little simpler, like this:

---

Cryptocurrency and the income statement

For the income statement, all cryptocurrency revenue and expense amounts should be translated to their real money value. Then reported as revenue or expense. This way there is only one universal currency for the income statement. In the U.S. its dollars.

Cryptocurrency and the statement of cash flows

For the statement of cash flows, denote whenever cryptocurrency was received as payment from sales and then was converted from cryptocurrency to cash. Also, denote whenever cash was converted to cryptocurrency for the purpose purchasing something related to operating activities.

Under “cash flow from investing activities”, denote whenever cryptocurrency was purchased with cash or sold for cash. Cryptocurrency is digital property and has a fluctuating market value similar to stock. Therefore, it can be assumed a purchase of cryptocurrency with cash is an investment. If cryptocurrency is purchased for any other purpose than an investment, it most likely should be noted with an explanation.

What if the business is going to trade cryptocurrencies for other cryptocurrencies often or repeatedly. Does the business need to adhere to the full discourse principle of accounting? if so, consider adding a new statement to the financial statements. Name the additional statement something similar to “Statement of cryptocurrency exchanges.” This statement could mimic the statement of cash flows. The exception would be to give the cryptocurrency amounts instead of cash amounts of each transaction. However, you would need to provide the market value of the cryptocurrency with regular money values/amounts at the time of the transactions.

Cryptocurrency in business

The use of cryptocurrencies in business is very rare in the USA, so accounting for cryptocurrencies is a very new thing, and a highly unexplored topic. There is a good chance your local CPA office doesn’t know how to handle accounting for cryptocurrency because it is not something that was taught at their university accounting programs or a topic studied to earn accounting license’s such as the CPA exam.

Cryptocurrency-consulting.online will continue to update this webpage as this topic evolves.

---

---