Accounting for Cryptocurrencies

50 Pages Posted: 11 Dec 2022

See all articles by Chelsea M. Anderson

Chelsea M. Anderson

University of Arkansas - Department of Accounting

Vivian W. Fang

University of Minnesota - Twin Cities - Carlson School of Management; European Corporate Governance Institute (ECGI)

James Moon

Georgia Institute of Technology - Scheller College of Business

Jonathan E. Shipman

University of Arkansas

Date Written: December 5, 2022

Abstract

Corporate interest in cryptocurrencies is growing quickly, with Bitcoin and Ether emerging as the top-of-mind digital assets. This paper studies how U.S. public firms account for crypto assets using a hand-collected sample from 2013 to 2021. Our analyses yield three key findings. First, although corporate crypto holdings are rising, it is difficult to estimate the landscape due to the lack of disclosure requirements and authoritative rules. Second, firms exercise considerable discretion in accounting for and disclosure of crypto holdings. Our sample includes firms using both fair value accounting and accounting for indefinite-lived intangible assets, with the latter being more prevalent recently. We also observe variations in impairment test assumptions and the extent of fair value disclosures. Third, consistent with theory, firms, if unguided, are more likely to adopt fair value accounting or make fair value disclosures when cryptocurrencies are more liquid. Our results are timely and informative as crypto accounting is a current topic on the FASB’s recognition and measurement agenda, with authoritative rule setting underway.

Keywords: Cryptocurrency, Accounting, Liquidity

JEL Classification: M40, M41, M48

Suggested Citation

Anderson, Chelsea M. and Fang, Vivian W. and Moon, James and Shipman, Jonathan E., Accounting for Cryptocurrencies (December 5, 2022). Available at SSRN: https://ssrn.com/abstract=4294133 or http://dx.doi.org/10.2139/ssrn.4294133

Chelsea M. Anderson

University of Arkansas - Department of Accounting ( email )

Business Bldg. 454
Fayetteville, AR 72701
United States

Vivian W. Fang (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

James Moon

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Jonathan E. Shipman

University of Arkansas ( email )

Business Bldg. 454
Fayetteville, AR 72701
United States

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