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Accounting For Digital Assets

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  • Andrew B. Jackson
  • Steven Luu

Abstract

Recent years have seen developments in distributed ledger technologies, such as blockchain, that have led to significant growth in the number and type of digital assets available. In this article we review the current practice of the small number of firms globally reporting digital assets on their financial statements. We then assess potential treatments under current GAAP, namely as intangibles, inventory or financial instruments. Finally, we provide policy advice to standard setters, with a call to either develop a new stand‐alone standard or to amend the definition of financial instruments to include cryptocurrencies, to allow greater comparability and understandability in firms’ reporting. Recent years have seen significant growth in the number and type of digital assets available. We review the current practices of firms reporting digital assets. We then assess potential treatments under current GAAP. Finally, we provide policy advice to standard setters, with a call to either develop a new stand‐alone standard or to amend the definition of financial instruments.

Suggested Citation

  • Andrew B. Jackson & Steven Luu, 2023. "Accounting For Digital Assets," Australian Accounting Review, CPA Australia, vol. 33(3), pages 302-312, September.
    • Handle: RePEc:bla:ausact:v:33:y:2023:i:3:p:302-312
    DOI: 10.1111/auar.12402
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    References listed on IDEAS

    as
    1. Jana Schmitz & Giulia Leoni, 2019. "Accounting and Auditing at the Time of Blockchain Technology: A Research Agenda," Australian Accounting Review, CPA Australia, vol. 29(2), pages 331-342, June.
    2. Boon Seng Tan & Kin Yew Low, 2019. "Blockchain as the Database Engine in the Accounting System," Australian Accounting Review, CPA Australia, vol. 29(2), pages 312-318, June.
    3. Maria Karajovic & Henry M. Kim & Marek Laskowski, 2019. "Thinking Outside the Block: Projected Phases of Blockchain Integration in the Accounting Industry," Australian Accounting Review, CPA Australia, vol. 29(2), pages 319-330, June.
    4. Cynthia Weiyi Cai, 2018. "Disruption of financial intermediation by FinTech: a review on crowdfunding and blockchain," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(4), pages 965-992, December.
    5. Corbet, Shaen & Meegan, Andrew & Larkin, Charles & Lucey, Brian & Yarovaya, Larisa, 2018. "Exploring the dynamic relationships between cryptocurrencies and other financial assets," Economics Letters, Elsevier, vol. 165(C), pages 28-34.
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    Cited by:

    1. Yaowen Shan & Sue Wright, 2023. "Contemporary Challenges: Spotlight on Climate, Cryptocurrencies and SME Practices," Australian Accounting Review, CPA Australia, vol. 33(3), pages 229-229, September.
    2. Luz Parrondo, 2023. "Cryptoassets: Definitions and accounting treatment under the current International Financial Reporting Standards framework," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 30(4), pages 208-227, October.

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