Certified Professional Accountants (CPAs) in California are calling on an industry watchdog to clarify standards for cryptocurrency accounting, with expectations that corporations will increase their use of cryptocurrencies moving forward.
Reports in The Block Crypto late last week said a group of California CPAs has sent a letter to the Financial Accounting Standards Board, a federal board that sets Generally Accepted Accounting Principles (GAAP), requesting that it consider establishing a task force to address a lack of clarity in cryptocurrency accounting standards.
Signed by the California Society of CPAs Committee (CalCPA), the letter said it has identified “clients in the technology and not-for-profit industries that have elected to accept and/or hold cryptocurrency,” according to reports, adding that CPAs expect corporate use of cryptocurrencies to “continue to expand in both volume and new fields of application.”
The committee also suggested in its letter that standards approach cryptocurrency accounting the same way they would for a corporation holding and using foreign currencies.
“The Committee believes the accounting for cryptocurrencies is not adequately captured under existing U.S. GAAP,” the letter stated. “The Committee believes that the accounting model for cryptocurrency that has an active market, and is held by an entity as a medium of exchange or investment, should be generally aligned with that for a foreign currency.”
The Committee pointed to JPMorgan’s latest initiative with cryptocurrency, the introduction of the JPMC Coin, which aims to facilitate corporate transactions through the financial institution’s proprietary digital coin. Reports noted that Facebook is expected to introduce its own stablecoin with an array of global currencies.
The CPAs’ request comes as the International Financial Reporting Standards Foundation (IFRS) Interpretations Committee prepares to meet this week in London to discuss standards in the cryptocurrency taxation space.
The report noted that last year, Hans Hoogervost, chairman of the board that sets the IFRS, expressed reluctance to include cryptocurrency in accounting standards due to the volatile nature of the technology and his predictions that cryptocurrencies will fade away.
“We also have to realize the number of companies working with cryptocurrencies is still extremely limited around the world,” he said last December, according to reports.
Earlier this year EY launched a corporate cryptocurrency accounting and tax management solution.