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ACCA - Crytocurrency Accounting - by Steve Chen, FCCA (www.globalapc.com)

My name is Steve Chen, and I am the course director at APC and I am also a fellow ACCA member.

Have you heard of 'Crytocurrency'? For example, Bitcoin? Well, many start up businesses nowadays try to finance the business operation by issuing its own crytocurrency using blockchain technology.

In the past, Tencent - a public listed company in HK has been using its own currency (called Q Bi) allowing users to exchange these currencies in the secondary market, buying digital products using Q Bi. However, it is not using centralised technology.

Many start up businesses simply need a white paper detailing business plan, then the crytocurrency can be issued and traded on public exchange such as coinbase. Surely, risks are there!!!

However, from the accounting's perspective, when businesses issue these currencies and raise finance, depending on the characteristics of the currency itself - such as allowing buyer to own part of profits of the company (like equity) or can be refunded (contract liability), different accounting treatments applies. The key to the question is the concept of 'substance over form' in the conceptual framework.




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