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Current issue – cryptocurrency and ICO

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Current issue – cryptocurrency and ICO

  • This topic has 5 replies, 2 voices, and was last updated 3 years ago by Stephen Widberg.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • March 1, 2022 at 2:20 pm #649558
    hieuht010198
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Teacher, Firstly, I have a little bit confused to distinguish ICO and cryptocurrency, can you explain the difference please?

    Secondly, I already have read 2 ACCA SBR articles: ‘Accounting for cryptocurrencies’ and ‘Asset ceilling test (IAS19), initial ICO, and non-financial performance measures’

    +)For the first articiles ‘ Accouting for crytocurrencies’, in page 3/6: they said that ‘cryptocurrencies should not be accounted for financial assets’. So I think Crytocurrencies is not related to IFRS 9,7 and IAS 32.

    +)For the second articles, in page 5/8: they said:’ the rights given to the tokens holders may be similars to the rights of the holders of debt, equity instruments or other financial instruments.
    So I suggest that ICO can be accounted for financial instrument in accordance with IFRS 9.

    So 2 my opinions is right?

    I hope your replies. Thank you so much.

    March 1, 2022 at 3:09 pm #649563
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    Cryptocurrency – intangible asset not financial asset.

    ICO – is like an IPO (international public offering) where the company gives something similar to debt or similar to equity. So, yes, it’s posh IFRS 9!

    March 2, 2022 at 3:51 pm #649655
    hieuht010198
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Thank you teacher Widberg, I almost understand.
    I have another matter:

    Normally (I studied in SBR Video – Financial instrument in Opentution guided by Teacher Chris) Financial instrument will related to bond, shares, cash and not involve goods and services.

    In this case Cryptoncurrency plays a role as a bond, shares similarly. The issuers (a party issues Cryptoncurrency) receive cash from investors and promise to give Cryptocurrencies (ie: token) to investors.

    Therefore they (issuers) initial recognise:
    DR: Financial liability
    CR: Cash – that they receive from investors

    Subsequently (at end of term – that date they pay cryptocurrency to investors)
    DR: Cryptocurrency – IAS 38 (instead of cash)
    CR: Financial liability

    Whether my opinion is right or not? Can you help me please. Thank you teacher.

    I appologize that I can not present clearly because I’m not good at English.

    March 3, 2022 at 9:28 am #649715
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    Not sure I understand your double entry – first journal should be:

    Dr Cash Cr Financial Liability (FL)

    Second journal

    Dr FL Cr Intangible asset (assuming that the crypto is intangible)

    March 6, 2022 at 8:56 am #649962
    hieuht010198
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Yes I totally understand. Thank you Teacher Widberg:)

    March 6, 2022 at 3:51 pm #649985
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    🙂

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Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Current issue – cryptocurrency and ICO’ is closed to new replies.

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