In an effort to enable accounting and auditing firms that service cryptocurrency-linked businesses to formulate accurate and error-free financial statements, audits and more, in a seamless manner, the Digital Assets Working Group of the American Institute of Certified Public Accountants (AICPA), has launched a new practice aid, according to a blog post on December 16, 2019.
AICPA Introduces Guidelines for Cryptoassets Auditing
At a time when bitcoin (BTC), altcoins, security tokens and the underlying distributed ledger technology (DLT) are increasingly making inroads into the traditional financial ecosystem, as well as several other sectors of the global economy, AICPA is poised to enable accounting firms to remains at the frontline of new technologies.
As stated on its website, AICPA says the continuous growth and rapid evolution of the digital assets ecosystem have made it quite essential for financial statement prepares or auditors who currently ply their trade in the cryptocurrency industry to arm themselves with the right tools and knowledge they need to succeed in the space.
Against that backdrop, the Digital Assets Working Group of AICPA has developed a robust practice aid, which the organization says is loaded with vital information that would enable professionals to account for and audit digital assets.
The AICPA Digital Assets Accounting Overview
At a time when tax authorities in various jurisdictions have started waging war against cryptocurrency market participants as well as ordinary hodlers who fail to remit their cryptocurrency taxes due to the complex nature of the entire process, AICPA’s new solution will empower audit and accounting professionals with the right skill sets they need to service these clients.
Specifically, the organization says the new practice aid with help accounting professionals and auditors to accurately classify and measure the digital assets purchased by any given entity, account for digital assets classified as Indefinite-Lived Intangible Assets, recognize cryptoassets when an entity purchases them via third-parties wallet services and more.
Commenting on the initiative, Matthew Schnell, a partner at Crowe LLP and co-chairman of the AICPA Digital Assets Working Group reiterated that though the practice aid does not fix the entire challenges, it represents a significant step in the right direction.
In his words:
“This represents a great first step in addressing some of the most frequent accounting questions that people have been asking. While we haven’t solved everything, we are making progress in providing needed guidance.”
It’s worth noting that the AICPA has since recognized the potential DLT and other innovative technologies and this latest move by the 132-year-old agency goes a long way to show that digital assets may be here for a very long time to come.