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crypto currency digiwire D19 Q3

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › crypto currency digiwire D19 Q3

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by Stephen Widberg.
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    Posts
  • May 28, 2021 at 3:06 pm #622058
    humai
    Participant
    • Topics: 741
    • Replies: 238
    • ☆☆☆☆

    Sir in in dec 19 crypto currency related part

    In last para Examiners ans state that

    The best way to account for a cryptocurrency would be fair value as that is the value at which the entity will realise their investment or transact in exchange for goods and services. Accounting for cryptocurrency at fair value with movements reflected in profit or loss would provide the most useful information to investors but existing accounting requirements do not appear to permit this.

    On the other hand, In last para Kaplan Kit ans state that

    When offered a choice of measurement base, the Conceptual Framework
    states that consideration should be given to the characteristics of the asset and
    the way in which it contributes to future cash flows. Cryptocurrency has a
    volatile market value and is often traded in the short-term. As such a current
    value measurement (such as fair value) is likely to provide more relevant
    information that historical cost. The Conceptual Framework states that profit or loss is the primary source of information about economic performance during the reporting period and that income and expenses would normally be presented in this statement. Income
    or expenses might be presented in other comprehensive income if they result
    from a current value remeasurement and if presentation in other
    comprehensive income increases the relevance of profit or loss. However, if
    cryptocurrency is held as an investment, then economic returns earned in the
    period are likely to be of interest to investors when assessing overall economic
    performance. Therefore, gains and losses on remeasurement of
    cryptocurrency to fair value should probably be recorded in profit or loss. This
    treatment would be consistent with financial assets held in the short-term,
    measured in accordance with IFRS 9 Financial Instruments.

    My Qs is that in last para examiner has written different ans and Kit has written different ans, So are the both correct and acceptable?

    May 29, 2021 at 6:00 pm #622222
    Stephen Widberg
    Keymaster
    • Topics: 11
    • Replies: 2837
    • ☆☆☆☆☆

    I think they are both saying FV with changes to P&L.

    I think I prefer the examiner’s!

    But, in this kind of question – they are just looking for a brief discussion. In SBR there may be no right answer, as in life. 🙂

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