Cryptocurrencies and accounting

Do you buy Ethereum, Bitcoin or other cryptocurrencies within your company? Do you get paid for goods with digital currency? We can advise you on how to keep accounting records for cryptocurrencies.

Czech accounting legislation does not currently contain specific regulations on how to account for and report digital currencies. This issue is not yet regulated by the International Financial Reporting Standards (IFRS).

However, this does not mean that accounting cannot cope with new phenomena. According to IFRS, companies must apply accounting methods used for similar transactions to areas not directly covered by the standards so that the financial statements give a true and fair view of economic reality. The decisive criterion is precisely the purpose of the acquisition of cryptocurrencies, as outlined above.

For the purposes of Czech accounting, the Ministry of Finance has issued a Notice on accounting and reporting for digital currencies. While the Ministry recognises that ‘the intention to purchase or hold digital currencies may vary across users’, it recommends consistent accounting and reporting for digital currencies across all entities. The recommended approach is to account for and report digital currencies as a “one-of-a-kind” inventory, measured at cost.

If you are starting to operate with cryptocurrencies within your business, but you or your accountant are unsure how to record cryptocurrency transactions in your accounting software and maintain a credible accounting for them, please contact us. We will be happy to advise you on cryptocurrency accounting and show you how to do it.