Table of Contents
Chapter 1: Introduction ……………………………………………………………………………………………………….. 10
1.1. Overview …………………………………………………………………………………………………………………. 10
1.2. Definition of the Problem …………………………………………………………………………………….. 11
1.3. Aims and Objectives of the Research …………………………………………………………………. 12
1.4. Major Contributions of the Research …………………………………………………………………. 12
1.5. Relevance of the Research …………………………………………………………………………………… 13
1.6. Definitions ………………………………………………………………………………………………………………. 14
Chapter 2: Literature Review: ……………………………………………………………………………………………… 17
2.1. Introduction: ………………………………………………………………………………………………………………. 17
What is a Cryptocurrency? ………………………………………………………………………………………….. 17
What are the features and scope of cryptocurrency? …………………………………………….. 18
What is Blockchain?……………………………………………………………………………………………………… 24
What is Mining? ……………………………………………………………………………………………………………. 25
2.2. Connection between Accounting and Cryptocurrency ………………………………………. 26
Cryptocurrency compared to Cash and Cash equivalents: ……………………………………. 27
Cryptocurrency compared to Non-Cash Financial Asset: ………………………………………. 28
Cryptocurrency compared to an Investment property:………………………………………….. 29
Cryptocurrency compared to an Intangible Asset: …………………………………………………. 29
Cryptocurrency compared to Inventories: ……………………………………………………………….. 30
Cryptocurrency and its translation:……………………………………………………………………………. 31
Cryptocurrency and disclosure:………………………………………………………………………………….. 31
2.3. Finance Executives/Accountants and Blockchain: ……………………………………………….. 32
2.4. Accounting Policy Themes vis-à-vis the characteristics of cryptocurrencies: ….. 33
2.6. Case study of Overstock.com: …………………………………………………………………………………. 37
3. Research Methodology …………………………………………………………………………………………………… 39
3.1. Research Introduction………………………………………………………………………………………………. 39
3.2. Aim………………………………………………………………………………………………………………………………. 39
3.3 Research Question …………………………………………………………………………………………………….. 40
3.4. Research Methodology ……………………………………………………………………………………………. 40
3.5. Research Philosophy ………………………………………………………………………………………………… 41
3.6. Research Approach: ………………………………………………………………………………………………….. 42
3.6. Data Collection ………………………………………………………………………………………………………….. 43
3.7. Qualitative Ethics: ……………………………………………………………………………………………………… 43
3.8. Population & Sample ……………………………………………………………………………………………….. 44
3.9. Data collection and analysis ……………………………………………………………………………………. 44
Chapter 4: Data Analysis and Findings ……………………………………………………………………………… 45
4.1. Introduction: ………………………………………………………………………………………………………………. 45
4.2 Sample and knowledge base of interviewees ……………………………………………………….. 45
4.3 Question about non-acceptance of cryptocurrencies …………………………………………. 47
Figure: Reasons for non-acceptance of cryptocurrencies ……………………………………… 50
4.4. Research of the views of the accounting and finance professionals regarding
need of a stand-alone accounting standard for cryptocurrencies …………………………… 50
Figure: Opinion on Stand-alone Standards ……………………………………………………………… 54
4.5 Can Cryptocurrency be treated as a currency (like any other currency)? …………. 54
Figure: Asset Classification of cryptocurrencies ………………………………………………………. 55
4.6 Views of professionals on what would be the questions the standard should
answer when they are set; ………………………………………………………………………………………………. 56
4.7. Volatility and Impairment of cryptocurrencies ……………………………………………………. 58
4.8. Can the cost incurred in Mining of cryptocurrencies be considered as a
Research and Development expenditure? …………………………………………………………………… 61
4.9. How can cryptocurrencies be distinguished between long term and short term
assets? ( Non-current or current asset) or is it possible to distinguish between long
term and short term asset? …………………………………………………………………………………………….. 62
4.10. How can one distinguish between payment received or asset received? or
How can we confirm if one has gotten title and control of this particular asset? …. 64
4.11. Research: Financial Statements of Companies accepting Bitcoin as a payment
…………………………………………………………………………………………………………………………………………….. 65
Treatment of cryptocurrencies in the financial statements …………………………………… 68
Chapter 5: Conclusions and Recommendations ……………………………………………………………… 70
5.1 Introduction ………………………………………………………………………………………………………………… 70
5.2 Conclusions…………………………………………………………………………………………………………………. 70
5.3 Conclusion: Reasons for non-acceptance ……………………………………………………………… 70
5.4. Conclusion: Need of a stand-alone accounting standard for cryptocurrencies 71
5.5 Conclusion: Asset Classification ………………………………………………………………………………. 72
5.6 Conclusion: Questions that need to be answered while setting a standard…….. 73
5.7 Conclusion: Impairment of cryptocurrency due to high volatility ……………………… 73
5.8 Conclusion: Research & development expenditure……………………………………………… 74
5.9 Conclusion: Distinguish between long term (non-current) and short term
(Current) crypto-asset. …………………………………………………………………………………………………….. 75
5.10 Conclusion: Confirmation of title received and distinguish between payment
received or asset received ………………………………………………………………………………………………. 75
5.11 Conclusion: Financial statements that reflect bitcoin/cryptocurrency…………….. 76
Chapter 6: Self-Reflection on Learning & Performance …………………………………………………. 77
Chapter 7: Bibliography & References ……………………………………………………………………………… 81
Chapter 8: Appendices ………………………………………………………………………………………………………… 84
Appendix #1 An extract from Overstock.com’s Form 10-K: ………………………………………. 84
Appendix #2 Bitcoin investment trust…………………………………………………………………………… 86
Appendix #3 Extract from all the other Financial statements …………………………………… 87
Appendix #4 Draft Questions: ………………………………………………………………………………………… 88
Appendix #5 Interview Transcripts: Participant #1 ……………………………………………………… 90
Appendix #6 Interview Transcripts: Participant #2 ……………………………………………………… 97
Appendix #7 Interview Transcripts: Participant #3 …………………………………………………… 101
Appendix #8 Interview Transcript: Participant #4 …………………………………………………….. 105
Appendix #9 Interview Transcript: Participant #5 …………………………………………………….. 109
Appendix #10 Interview Transcript: Participant #6 ………………………………………………….. 111
Appendix #11 Interview Transcripts: Participant #7 ………………………………………………… 116
Appendix #12 Consent forms layout ………………………………………………………………………….. 118
