Accounting for Bitcoin and Cryptocurrencies

Accounting for Bitcoin and Cryptocurrencies

Accounting for Bitcoin and Cryptocurrencies

If We learning about accounting in today’s era, it is guaranteed that we will also discuss digital currencies in addition to conventional currencies. Digital currency is now being used as an investment product because its value continues to rise. In addition, it is considered a legal tender or payment instrument in several countries. Then, how is the accounting for the digital currency?

What are Bitcoin and Cryptocurrency?

When discussing digital currencies, it is guaranteed that bitcoin and also cryptocurrencies will be thrown into the discussion. So, what is meant by cryptocurrency is a digital currency which is also in some sources interpreted as virtual currency. This means that cryptocurrency becomes some short of payment form for buying and selling transactions online.

Then, there are many types of cryptocurrencies and one of the most popular ones is bitcoin. So that bitcoin becomes one of the “currencies” for an instrument of digital payment or payments in cyberspace. Bitcoin as well as other cryptocurrencies are approved in several countries as legal tender.

It’s just that in Indonesia it cannot be called legal tender because it is not in accordance with constitution Number 7 of 2011 concerning Currency. In addition, it is also not in accordance with Constitution Number 23 of 1999 concerning Bank Indonesia. Where the Act explains that the legal currency in Indonesia is the currency issued by Bank Indonesia, namely the Rupiah.

Even so, in the world of accounting, cryptocurrencies with all their currencies are considered legal, especially in several countries. Such as Japan, South Korea, United States, Russia, and many others. Bitcoin is one of its on the rise cryptocurrencies and only 21 million are produced, so with high demand and lack of availability, the price of bitcoin continues to rise and becomes an investment product.

Accounting for Bitcoin and Cryptocurrencies

Bitcoin in cryptocurrency then goes into the category of financial assets which are then subject to accounting standards, namely PSAK in English (statement of financial accounting standards) or IFRS (International Financial Reporting Standard). However, bitcoin is an intangible financial instrument. In accordance with PSAK 50 pp 03, bitcoin which is a type of cryptocurrency goes into cash.

Referred to as cash because it is a financial asset that serves as a medium of exchange. Its use in countries where it is legal as a means of payment and on the internet, makes it function as a financial asset or treasury. So that in preparing the financial statements it will go into cash.

Companies that transact using bitcoin then compile financial statements by entering them into the cash sector. In addition, since the form is intangible and is used for digital transactions, the invoice of the transaction needs to be carefully tidied up. So that it can be easily entered into the financial statements of a company.

 

In the future, maybe bitcoin and other currencies in cryptocurrencies will be recognized as legal tender in Indonesia. Because digital currency is recognized for its existence in accounting and provides practicality when buying and selling online.