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Is Bitcoin a Currency or an Investment? An IFRS View

In: Global Versus Local Perspectives on Finance and Accounting

Author

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  • David Procházka

    (University of Economics Prague)

Abstract

The rise of cryptocurrencies raises also question of how to account for them. The paper focuses on two common situations when firms deal with cryptocurrencies—receiving cryptocurrencies as a means of payment or acquiring cryptocurrencies for investment purposes. Using empirical evidence from economic literature, the paper discusses the properties of cryptocurrencies as cash and as an investment asset. Based on this analysis, potential accounting models under IFRS are developed and discussed regarding the motivation with which an entity acquires cryptocurrencies. Arguments are presented to show that a fair value model is the most relevant for investment purposes and a foreign currency approach is appropriate for payment transactions.

Suggested Citation

  • David Procházka, 2019. "Is Bitcoin a Currency or an Investment? An IFRS View," Springer Proceedings in Business and Economics, in: David Procházka (ed.), Global Versus Local Perspectives on Finance and Accounting, pages 217-226, Springer.
    • Handle: RePEc:spr:prbchp:978-3-030-11851-8_21
    DOI: 10.1007/978-3-030-11851-8_21
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