How are accounting records of coin transactions kept?

You may receive/make payments using bitcoin or other virtual currencies in exchange for your goods and services. However, accounting for these transactions can be problematic. So what should we look for when accounting for bitcoin transactions? In this article, we will examine the points where the concept of bitcoin can cause problems and focus on accounting for transactions that businesses can do with bitcoin or other virtual currencies appear.

Let's see the operations that we will explore as an example:

1. Payment or pickup with bitcoin in exchange for the service

2. Earn bitcoin by mining

3. Earning or Buying Other Virtual Currency Through ICO (Introduction)

4. Receiving or paying a commission in bitcoin in exchange for a brokerage on an exchange or stock exchange

Bitcoin - what is it?

In fact, the main problem is that there is no precise definition of what Bitcoin (or any other virtual currency) is. In this regard, there is no accepted definition in the CMB, BRSA and the Tax Administration and there are different practices in other countries.

Bitcoin; Is it money, is it a security, is it a commodity (stock)? If we can determine which class Bitcoin falls into out of these three, it will be accounted for and taxed accordingly.

There is no definition of bitcoin in our laws and there is no generally accepted application in the past. Therefore, in this article, I will evaluate the topic under the assumption that Bitcoin is a "commodity". Because there is an opinion that Bitcoin does not have the properties of "money" and cannot be considered a "securities" within the meaning of the law. This may change with future laws or regulations.

1. Payment/collection with Bitcoin in exchange for the service

Receiving Bitcoin for service:

When service is rendered, invoice is issued, revenue is written and customer account is debited (normal sales transaction). In addition; The received Bitcoin is processed into stock accounts and the customer account is closed.

Payment for service with Bitcoin:

The supplier's service invoice is charged and the supplier's account is credited (normal purchasing transaction). In addition; The received Bitcoin is deducted from the stock accounts, the supplier account is closed, and if there is a difference between the invoice amount and the Bitcoin amount registered in the stock, income/expense is written.

2. Earning Bitcoin by mining

If your company has earned Bitcoin from the mining business, it should issue an invoice for this transaction, record income and increase the Bitcoin stock account in return for this income.

3. Earning/purchasing other virtual currencies through ICO (launch)

Sale of virtual currency in exchange for ICO:

An invoice must be issued for the money collected or the income obtained. Unsold virtual currencies, on the other hand, should be taken to stock accounts at the mark price.

Buying virtual currency from ICO:

Received virtual currencies must be recorded in the stock account.

4. Receiving/paying the commission in Bitcoin in exchange for brokerage in the exchange or exchange

In this case, the explanations in item 1 apply. If we repeat briefly, an invoice should be issued against commission, income should be written and the customer account should be debited. The received Bitcoin should be recorded in the stocks and the customer account should be closed.

We carry out our text with examples from Bitcoin.