Financial Reporting for Cryptocurrency

Luo, Mei; Yu, Shuangchen

doi:10.2139/ssrn.4186836

Cited by 3 publications

(3 citation statements)

References 15 publications

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“…They also find that the cryptocurrency market has an adverse effect on highly indebted firms in Africa. Luo and Yu (2022) analyze the financial statements of forty global companies that have exposure to cryptocurrencies, including cryptocurrency purchases, mining, payments, trading, and investments in initial coin offerings and early-stage blockchain ventures.…”

Section: Literature On the Effect Of Private Digital Currencies On Firmsmentioning

confidence: 99%

“…They also find that the cryptocurrency market has an adverse effect on highly indebted firms in Africa. Luo and Yu (2022) analyse the financial statements of 40 global companies that have exposure to cryptocurrencies, including cryptocurrency purchases, mining, payments, trading and investments in initial coin offerings and early-stage blockchain ventures. They find that firms that receive revenue from cryptocurrencies account for cryptocurrencies as intangibles in their financial statements using different measurement bases and they classify the associated cash inflows differently.…”

Section: Literature On the Effect Of Private Digital Currencies On Firmsmentioning

confidence: 99%

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Central bank digital currency and bank earnings management using loan loss provisions

Ozili¹

2023

DPRG

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Purpose This paper aims to analyse the role of central bank digital currency (CBDC) in bank earnings management and focus on how CBDC activity might influence banks to engage in accrual earnings management using loan loss provisions (LLPs) and the implications for earnings quality. Design/methodology/approach The paper used conceptual discourse analysis to explain the role of CBDC in bank earnings management. Findings Banks will use accruals, such as LLPs, to manage earnings when CBDC-induced bank disintermediation leads to a reduction in bank deposits, a reduction in bank lending and a likely reduction in reported earnings. Bank managers will mitigate the reduction in reported earnings by lowering discretionary LLPs to increase reported earnings. Originality/value The recent emergence of CBDC in the digital currency universe has led to increased research interest on the role of CBDC in corporations and society. This study contributes to the literature by focusing on banks, and examining the effect of CBDC on bank earnings management.

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Section: Literature On the Effect Of Private Digital Currencies On Firmsmentioning

confidence: 99%

Section: Literature On the Effect Of Private Digital Currencies On Firmsmentioning

confidence: 99%

Central bank digital currency and bank earnings management using loan loss provisions

Ozili¹

2023

DPRG

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“…Cong, Harvey, Rabetti, and Wu (2022) assembles a diverse set of public, proprietary, and hand-collected data, and using accounting forensics assess the economics of crypto-enabled cybercrimes. Luo and Yu (2022) compares and contrasts U.S. and international accounting and financial reporting practices for cryptocurrency. Our study is, to our knowledge, the first study of crypto markets from a tax perspective, in particular to provide evidence that changes in tax scrutiny are affecting trading behavior in these markets.…”

Section: Introductionmentioning

confidence: 99%

Tax-Loss Harvesting with Cryptocurrencies

Cong¹,

Landsman²,

Maydew³

et al. 2022

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We describe the landscape of taxation in the crypto markets, especially that concerning U.S. taxpayers, and examine how recent increases in tax scrutiny have led to changes in trading behavior by crypto traders. We predict under a simple theoretical framework and then empirically document that increased tax scrutiny leads crypto investors to utilize legal tax planning with taxloss harvesting as an alternative to non-compliance. In particular, domestic traders increase taxloss harvesting following the increase in tax scrutiny, and U.S. exchanges exhibit a significantly greater amount of wash trading. Additional findings suggest that broad-based and targeted changes in tax scrutiny can differentially affect crypto traders' preference for U.S.-based exchanges. We also discuss other gray areas for tax regulation related to new crypto assets such as Non-Fungible Tokens and Decentralized Finance protocols that further highlight the importance of coordinating tax policy and other regulations.

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