Blockchain and Crypto: Accounting using NetSuite and QuickBooks
Accounting and Cryptocurrencies
The cryptocurrency market has rocketed from the very first Bitcoin trade in 2009. After over ten years, the market had a worth of over $2 trillion with almost 4000 different cryptocurrencies. In addition, many industries have implemented blockchain to safeguard their data, including government, healthcare, and computing technology that legalizes and protects cryptocurrency.
The rising acceptance of cryptocurrency makes it popular for investments and dealings. Thus, the accounting profession must have some knowledge about it and how generally accepted accounting principles (GAAP) categorize these resources.
Let’s have a look at these cryptocurrency accounting cases:
How does a certified public accountant (CPA) decide if an asset is physical or non-physical while recording a customer’s taxes where he has to consider cryptocurrency assessments correctly? Is the auditor aware of the digital ledger while verifying companies’ financial statements? A bookkeeper needs to compare the general ledger and bank records to evaluate if the client has conserved accurate price records of trading. Accounting has become more complex with the emergence of cryptocurrency.
How to Account for Cryptocurrencies?
Bookkeepers and accountants have faced numerous challenges due to the increased acceptance of cryptocurrencies. Accounts needed to consider a new class of asset that didn’t appear like a product or currency. The accounting industry should acclimatize its procedures and submission protocols to adjust to this new asset and its differences.
To completely understand cryptocurrency accounting, the first thing is to recognize the elements of cryptocurrency.
Let’s go through them!
Intangible Assets
Intangible resources don’t have a physical appearance but have value. For example, some intangible assets include intellectual property, patents, and brand recognition. Compared to tangible resources that include land, stocks, inventory, property, and bonds.
Crypto Assets
These are digital currencies, or associated tokens totaled on a digital ledger, established on a decentralized platform, and protected by encryption. Crypto assets aren’t usually controlled. Instead, they’re fluctuating because governments set up regulations for them. Accountants sometimes consider their tangible assets and other times intangible.
Accounting for Bitcoin and Other Crypto assets
Accountants must opt for an evaluation approach for crypto-assets as governments must set up rules for them and tax accounting. Furthermore, tax is built on the fair cash value of the crypto. Thus, investors must have an accurate record while procuring and spending the asset.
Blockchain Deals Integration into NetSuite and QuickBooks
Governments worldwide are setting up legislations against cryptocurrency placing the technology at the edge of change. It might alter soon. Certain nations are continuously trying to suppress cryptocurrencies. Though the US is not entirely prohibiting cryptocurrencies, it recognizes them as a threat to its digital currency. Crypto assets face a psychological fence as they are incomprehensible and abstract, like “how can it count like real money if you can’t use it.”
Read more about Cryptocurrency Accounting For Enterprises
