Management of Cryptocurrency Transactions from Accounting Aspects
Abstract
Introduction. An analysis of approaches to accounting for transactions with cryptocurrency states that the development of digital technologies and virtual markets has revealed a lack of readiness for the accounting display of such assets because there is no single approach to accounting for cryptocurrency transactions. Various regulatory documents have proposed considering cryptocurrency as an object that can be stocks, financial investments, monetary means, or intangible assets. Therefore, there is a need to determine exactly what cryptocurrency should be considered and which financial accounts should be displayed in the future.
Aim and tasks. The purpose of the study is to identify the main characteristics of cryptocurrencies, which will help identify them as accounting objects. Based on this, it is necessary to study the main approaches to the display of such assets on financial accounts and to determine in which operations cryptocurrency can be used, and how to identify it.
Results. It is established that the generation of cryptocurrency is affected by the approach of the miner, as he can generate new cryptocurrency, and all incurred costs are included in the cost price and form the initial value of the mined coin. However, if a miner can mine cryptocurrency using already existing technology, then the initial value must be capitalized on account 154 “Purchase (creation) of intangible assets” to form the initial value (cost). The identification criteria are as follows: receiving economic benefits, the sale operation will be completed, according to which cryptocurrency can be considered as reserves. The content of the operations (increase or decrease in exchange rate, formation of reports, etc.) for which cryptocurrency should be revalued on the relevant balance sheet date is given.
Conclusions. Cryptocurrency can be considered a stock or an intangible asset. Modern blockchain technology affects accounting science by using triple rather than double recordings. This adds a level of entry, a cryptographic stamp with all transactions, and proves, however, that the interested parties (accountant, client, tax authorities, and auditor) will have an identical copy of the “ledger”. After achieving cryptocurrency price stability, such an asset can be used during international transactions, as it is more often used for speculative gains.
Keywords:
mining, cryptoassets, income, expenses, accounting of cryptocurrencies.References
Aras, S. (2021). On improving GARCH volatility forecasts for Bitcoin via a meta-learning approach. Knowledge-Based Systems, 3, 230-238. https://doi.org/ 10.1016/j.knosys.2021.107393
Bashynska, I. (2020). Management of industrial enterprise's business processes smartization to ensure its economic security. Schweinfurt: Time Realities Scientific Group UG (haftungsbeschränkt).
Binda, J., Prokopenko, M., Ramskyi, A., Shuplat, O., Halan, L., & Mykhaylenko, D. (2020). Assessment of investment attractiveness of industrial enterprises. International Journal of Management, 11(2), 27-35.
Gryshchenko, I., Chubukova, O., Bilovodska, O., Gryshchenko, O., & Melnyk, Y. (2020). Marketingoriented approach to evaluating the strategy of distribution management for innovative products in logistics. WSEAS Transactions on Environment and Development, 16, 371–383.
Hashemi Joo, M., Nishikawa, Y., & Dandapani, K. (2020). Cryptocurrency, a successful application of blockchain technology. Managerial Finance, 46(6), 715-733. https://doi.org/10.1108/MF-09-2018-0451
Ingram, K., Diachenko, O., Halytskyi, O., Nitsenko, V., Romaniuk, M., & Zhumbei, M. (2022). Formalization of the Optimal Choice of the Activities of Agricultural Enterprises for the Implementation of Information and Communication Technologies. Financial and Credit Activity: Problems of Theory and Practice, 3(44), 141-149. https://doi.org/10.55643/fcaptp.3.44.2022.3758
Maeng, Ch.-K. (2022). A Study on the Concept of Single Window and Its Management by Korea Customs. The e-Business Studies, 23(1), 281–293 https://doi.org/10.20462/tebs.2022.2.23.1.281
Malyarets, L. (2021). Diagnostics of Efficiency of an Enterprise's Export-import Activity. Montenegrin Journal of Economics, 17(1), 71–83. https://doi.org/10.14254/1800-5845/2021.17-1.5
Malyarets, L. M., & Grynko, P. O. (2019). Analytical Provision of Analysis of the Efficiency of the Enterprise's Export-Import Activities. Problems of Economics, 1, 208-216. https://doi.org/10.32983/2222-0712-2019-1-208-216
Martinez-Zarzoso, I., & Chelala, S. (2020). The impact of single windows on trade. World Economy, 43(10), 1–32. https://doi.org/10.1111/twec.12945
Molchanova, E., & Solodkovskyi, Yu. (2014). The global service nature of modern cryptocurrencies. Mizhnarodna Ekonomichna Polityka, 1(20), 60-78.
Prokopenko, O., Kichuk, Y., Ptashchеnko, O., Yurko, I., & Cherkashyna, M. (2021). Logistics Concepts to Optimize Business Processes. Estudios de Economia Aplicada, 39(3), 4712. https://doi.org/10.32479/ijeep.13617
Prokopenko, O., Shmorgun, L., Kushniruk, V., Slatvinska, M., & Huliaieva, L. (2020). Business process efficiency in a digital economy. International Journal of Management, 11(3), 122-132. https://doi.org/10.34218/IJM.11.3.2020.014
Prokopyshyn, O. (2020). Development of Forecasts of Export-Import Operations in the System of Foreign Economic Activity. Management of Economy. Theory and Practice. Chumachenko’s Annals. Collection of Scientific Papers, 16, 252–260. http://dx.doi.org/10.37405/2221-1187.2020.252-260
PwC. (2019). Cryptographic assets and related transactions: accounting considerations under IFRS. PwC, 2019-05. https://www.pwc.com/gx/en/audit-services
Pyroh, O., Prokopenko, M., Chernobay, L., Papizh, Y.,& Syta, Y. (2021). Management of business processes and export-import activity of industrial enterprises in the digital economy. Estudios de Economia Aplicada, 39(5), 2021. https://doi.org/10.25115/eea.v39i5.5204
Saiedi, E., Broström, A. & Ruiz, F. (2021). Global drivers of cryptocurrency infrastructure adoption. Small Bus Econ, 57, 353–406. https://doi.org/10.1007/s11187-019-00309-8
Shabelnikov, A., Olgeizer, I., & Sukhanov A. (2021). Concept of Digital Platform at Marshalling Yards. World of Transport and Transportation, 19(1), 60–73. http://dx.doi.org/10.30932/1992-3252-2021-19-1-60-73
Verkhovna Rada of Ukraine. (1999). On the approval of the National regulation (standard) of accounting. Adopted by the Ministerstvo finansiv Ukrainy of 03.11.2020. https://zakon.rada.gov.ua/laws/show/z0027-00#Text
Verkhovna Rada of Ukraine. (2002). On Virtual Assets. https://zakon.rada.gov.ua/laws/show/2074-20#Text
Zayed, N.M., Mohamed, I.S., Islam, K.M.A., Perevozova, I., Nitsenko, V., & Morozova, O. (2022). Factors Influencing the Financial Situation and Management of Small and Medium Enterprises. Journal of Risk and Financial Management, 15, 554. https://doi.org/10.3390/jrfm15120554
If the article is accepted for publication in the journal «Economics. Ecology. Socium» the author must sign an agreementon transfer of copyright. The agreement is sent to the postal (original) or e-mail address (scanned copy) of the journal editions.
