Deloitte

For tax purposes, the value of crypto is established at the time the payment becomes fixed and determinable. That may correlate with the time the crypto is received rather than when the contract is entered. For tax, as is typically the case for barter transactions, the company must establish the readily ascertainable fair market value of the asset at the time of receipt. That value is typically arrived at by using a block explorer or value aggregator.

The company must record the time and value of the crypto at the time of receipt or when the company has dominion and control.

When the company agrees to receive or accept consideration from a customer that is not cash, the value of that noncash consideration is determined at the contract’s inception.

Consequently, the price of the good or service that drives the recorded revenue is determined up front based on the value of the crypto. Subsequent changes in the value of the crypto do not alter the amount ultimately recognized by the company as revenue. That’s the case regardless of the timing of the delivery of the underlying good or service to the customer, all in accordance with the terms of the contract or receipt of the crypto.

However, the changes in value of the crypto asset may still require separate accounting (for example, as an embedded derivative), just outside of the revenue accounting rules.

If the company is exposed to price variability in the crypto asset after establishing the price or value of the transaction, this exposure may require separate accounting. Oftentimes, that may come in the form of derivatives.

If the crypto asset used in the transaction is recorded on the books at a value different from the value for which the company was able to transact that crypto asset, that may result in realization of the value differential.

Deloitte

For tax purposes, the value of crypto is established at the time the payment becomes fixed and determinable. That may correlate with the time the crypto is received rather than when the contract is entered. For tax, as is typically the case for barter transactions, the company must establish the readily ascertainable fair market value of the asset at the time of receipt. That value is typically arrived at by using a block explorer or value aggregator.

The company must record the time and value of the crypto at the time of receipt or when the company has dominion and control.

When the company agrees to receive or accept consideration from a customer that is not cash, the value of that noncash consideration is determined at the contract’s inception.

Consequently, the price of the good or service that drives the recorded revenue is determined up front based on the value of the crypto. Subsequent changes in the value of the crypto do not alter the amount ultimately recognized by the company as revenue. That’s the case regardless of the timing of the delivery of the underlying good or service to the customer, all in accordance with the terms of the contract or receipt of the crypto.

However, the changes in value of the crypto asset may still require separate accounting (for example, as an embedded derivative), just outside of the revenue accounting rules.

If the company is exposed to price variability in the crypto asset after establishing the price or value of the transaction, this exposure may require separate accounting. Oftentimes, that may come in the form of derivatives.

If the crypto asset used in the transaction is recorded on the books at a value different from the value for which the company was able to transact that crypto asset, that may result in realization of the value differential.