Investor focus - Current Issues Flashcards
(2 cards)
Crypto - Currency
Accounting for crypto currency
Is it an asset?
Assets are economic resource controlled as a result of past events - It is an asset
recognition
It needs to meet recognition of relevant and faithful representation - It is relevant as it is relevant to include as it indicates future cashflow.
what kind of asset is crypto?
Is it cash?
Cash is readably exchangeable and widely accepted
They are cash equivalents - they are not cos their value are volatile.
is it a financial asset - No it does not create a liability/ equity instrument in another business.
Is it an intangible asset - YES
An intangible asset is an identifiable non monetary asset without physical presence.
It is identifiable as it is separable and capable of being sold
It has a reliable measure and a probable inflow of economic benefits
Indefinite OR definite life
Indefinite - check annually for impairment
Cost or revaluation - Revaluation as there is an active market, cost if there is no active market.
Gains/losses are treated as under IAS 16
Crowd Funding
Crowdfunding is the funding of a new start up project by collecting cash from a variety of individuals/entities often via the internet.
Accounting for crowdfunding
DR cash
CR - Why has the money been received
Do you have have to pay back e.g. debt, if ownership given away e.g. equity.
It may relate to a sale e.g. revenue
