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Episode 12 · Triple Entry Accounting · Nov 5th, 2021
Shehnaaz Suleman on Accounting for Crypto Assets
Shehnaaz Suleman
IFRS Technical Partner @ BDO
What We Discuss With Shehnaaz Suleman
With more and more institutional money pouring into the crypto market, I wanted to dive into how these cryptocurrencies are being recorded into the financial statements.
As of now, cryptocurrencies do not have a stand alone accounting standard, and therefore are being accounted under ‘Intangible Assets’ – the standard that governs assets like software licences, trademarks, and so on.
While innovation in the crypto space is moving at a rapid pace, we cannot say standard setters in the accounting industry are having the same stamina to keep up.
However, I must say that I do sympathize with them since new crypto assets are emerging all the time with varying properties. The task is monumental to say the least.
In this episode, you will learn;
- Where are we right now with accounting for crypto assets;
- The issues with the current accounting treatment;
- Differences with holding crypto as a long term investment rather than for trading purposes;
- How to account for stable coins;
- Whether we need a stand alone standard for crypto;
- And much more.
Show notes
- Shehnaaz shares the story of how she became fascinated with financial instruments and how that interest drove her into cryptocurrencies [2:55]
- How are crypto assets in general different from traditional investments like stocks, bonds, commodities. [6:22]
- What is the accounting treatment for cryptocurrencies, and the different approaches and accounting models to recognize them [9:26]
- How the accounting treatment for different jurisdictions may vary [14:00]
- Taking bitcoin as an example, how is a price movement reflected in the accounting books [19:02]
- What is the difference between investing in a cryptocurrency fund as opposed to directly investing in the cryptocurrency itself, in terms of their accounting [24:08]
- In Shehnaaz opinion, is there a need for a stand alone accounting standard for cryptocurrencies [27:03]
- How to account for stablecoins and why can’t they be recorded as cash, similar to other fiat currencies [30:30]
- What advice does Shehnaaz has for accountants to start their blockchain education journey and have their career evolve with the technology [34:39]
- Shehnaaz shares why reading to her is so important to navigate this technological transition period we are in [38:25]
