- This topic has 5 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
There is an article recently published by ACCA on ICO and its quite confusing
I would appreciate if you can please clarify these questions
My confusion is why Preparation cost for ICO will be recognize as an intangibles. Is it sort of preoperating cost necessary for the development of IT projects. As I read some where ICO are mainly for IT projects.
will Revenue criteria for issuer will be excess of inflows over outflows.? this is what written in article. I was thinking revenue will be the amount receive on issue of tokens, and expenses of initial ICO will be cost of sales.
if Issuer is obliged to pay some thing based on profit will it be liability or contingent liability?
They said in article cost of intermediary service will be capitalize under IAS 38.
Article is written so random and I am really surprised what they expect from student in 3 hours exam VS how information is presented in an article.
It should be in heading giving info of
initial recognition
subsequenthere is link of article
https://www.accaglobal.com/uk/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/technical-articles/sept20-rev-pt3.htmlIf this comes up in the exam it will be for a few marks only. You would be writing on it for about 10 minutes. When this has happened before the examiner hopes that the students will reproduce the article. So as long as you appreciate the main points about the expenses and the income I can see your point about revenue and cost of sales but I would probably not go down that route.. If it does come up in the exam I would not putting any of your own ideas in case it causes a muddle.
They will be looking for is an explanation of when you can recognise intangibles and explanation of when you can recognise revenue.
HI Sir Just need and opinion on my understanding your response will be highly appreciated
From holder of token perspective
-Can I give my justification from the holder of token perspective that, holds can recognised token as intangible as and amount paid in the form of crypto currencies in identifiable. as holder can hold the token for appreciation in value.
From issuer perspective
-if I say that proposed IT venture is successful then we recognize the cost of ICO in cost of intangible asset develop and if venture is not successful then we need to expense all cost.
-In respect of additional management services provided by the issuer it will recognize revenue over period. ( in article why he is saying intangible)
I think the holder of the token might regard it as intangible or possibly investment or possibly inventory depending on how they see the transaction.
For the issuer I agree with your first point in that we would have to expense costs if the bench is not profitable
If the issuer sees the business model as selling of these tokens then I guess they might perceive it as revenue
Investment IAS 40 specifically said for land and building so from the perspective of holder I think under intangibles it can fall..do you agree?
if we link it with crypto currency.. the services miner provided , issuer will provide sort of same services. in case of miner there are two fees block reward and transaction fee.. for block reward we do not apply IFRS 15 as this reward is generated by system so no customer is there so miner recognize it as an intangible. But for transaction fee customer is invoke so we apply IFRS 15. but assets used by miners are expensed out as they are not identified.
so can we apply same logic to issuer of token providing services.
Sir I have no words to say thanks to you and this platform for helping students and answering our queries in timely manner.. you truly are angels with human face.
- The topic ‘initial coin offering’ is closed to new replies.