Current aspects of the cryptocurrency recognition in Ukraine

Abstract

Various mechanisms for implementation, and at the same time contradictory approaches to the essence, evaluation, reflection, and regulation, led to the need to consider and improve approaches to the recognition of cryptocurrency. Based on the critical analysis of the legal provisions in Ukraine and the approaches of scientific experts, practitioners and international experience, the economic essence of cryptocurrency is substantiated. The legal, economic and accounting aspects of cryptocurrency recognition in developed and transformational economies are revealed. In order to meet the information needs of users, the peculiarities of the application of methods for estimating cryptocurrency commodities and the influence of the chosen method on the reflection of such an asset in the financial statements have been identified. The necessity to clarify and harmonize existing national accounting standards for recognizing and reporting on cryptocurrency transactions has been identified. The proposed approach to the identification and recognition of cryptocurrency goods will improve the relations between the owners of cryptocurrency and the state, legalize cryptocurrency transactions and form an effective system for managing such transactions in Ukraine.

Display of cryptocurrency in accounting

“…As soon as the required number is generated, a block with all the transactions is closed, and miners move on to search for the next one. Miners are rewarded for the correct hashCode; the reward is 12.5 bitcoins (Fomina et al, 2019). The rental of premises, heat elimination, and temperature control in the premises are the additional conditions of the successful equipment performance.…”

Accounting Treatment of Cryptocurrency: A Malaysian Context

“…Some countries explicitly banned the application of cryptocurrency whereas some countries have come up with a regulation to monitor the transaction of cryptocurrency. In addition, there is no single approach on the recognition of cryptocurrency from the legal aspects (Fomina, Moshkovska, Avhustova, Romashko, & Holovina, 2019). Some countries such as the United States view cryptocurrency as a commodity where enterprises which are involved in cryptocurrency exchange need to obtain a license to keep records of all their transactions.…”

“…Some countries such as the United States view cryptocurrency as a commodity where enterprises which are involved in cryptocurrency exchange need to obtain a license to keep records of all their transactions. Besides that, Japan has recognized cryptocurrency to have the same function as the national currency (Fomina et al, 2019). The authorities in Japan have also decided to regulate the circulation and taxation of cryptocurrency in the country.…”

“…In contrast, cryptocurrency is not legally recognized in Switzerland. All the transactions are treated as payment facilities but not a commodity (Fomina et al, 2019). The underlying reason that a mixed approach is being adopted by different governments is that they do not want to overwhelm the Fintech sector with new regulations which will eventually affect the transaction of cryptocurrency (Peter, 2015).…”

“…Despite cryptocurrencies serving as a medium of exchange, it is often argued that cryptocurrencies cannot be measured under IAS7 because cryptocurrency is subject to severe volatility (Sixt & Himmer, 2019). Meanwhile, some argue that cryptocurrencies are yet to be widely accepted as a medium of exchange, because some countries have banned the use of cryptocurrencies (Fomina et al, 2019). Thus, it cannot be measured under IAS 7.…”