This historical article uses simplified examples to explain why a company's crypto transactions must be individually documented. The prices and dates are illustrative. The original accounting-entry images and older statements about unresolved standards should not be used as an implementation guide for a current financial year.
Buying and selling for conventional currency
Suppose a company buys one bitcoin for €10,000 and later sells it for €40,000. Ignoring fees and other adjustments, the economic difference is €30,000. The accounting and tax file must retain the purchase, sale, price evidence and relevant account movements.
A transfer of the resulting euros from the exchange to the company's bank is a separate movement. It should be reconciled without recognising the same proceeds twice. The applicable accounting classification and tax treatment must be established for the actual entity and period.
Exchanging one crypto-asset for another
In another example, the company exchanges 0.5 BTC, originally acquired for €5,000, for 10 ETH worth €10,000 at the time. The simplified difference is €5,000. A company's treatment cannot be inferred from the rules for an individual's private portfolio.
This creates practical questions even without a cash receipt: how will any resulting tax be funded, which price source supports the exchange, and how will subsequent disposals be tracked? A crypto-to-crypto transaction must remain visible in the accounting evidence.
Staking and other rewards
A reward requires identification of the underlying arrangement. Direct validation, a platform product described as staking and a lending service may involve different rights and risks. Record the quantity received, the event date, restrictions and valuation evidence.
The historical example described 10 ETH generating weekly rewards at an assumed annual rate. This was a simplified scenario, not a guaranteed return. The statement that staking accounting was wholly undefined reflected the publication's original context and must not substitute for checking current standards.
Year-end holdings and valuation
An inventory should identify what the company owns and distinguish balances held by a provider from directly controlled wallets. Reconcile quantities before applying a valuation method.
For example, 0.5 BTC worth €40,000 per bitcoin has a market value of €20,000. Comparing that figure with an illustrative €5,000 acquisition amount shows a €15,000 economic increase; it does not by itself establish the journal entry or taxable amount. Classification, measurement rules and any tax adjustments need a separate assessment.
Similarly, 10 ETH bought for €10,000 in total and later worth €500 each have fallen by €5,000. Do not confuse an economic loss, a provision, an accounting adjustment and tax deductibility.
Paying suppliers and receiving customer payments
A supplier invoice paid in crypto involves both settlement of a liability and the movement of an asset. Preserve the invoice, agreement on payment terms, transaction identifier and valuation. Receiving crypto from a customer also requires a link between the invoice, the receipt and any later conversion.
Payment in crypto does not remove ordinary invoicing and VAT questions. Timing differences between invoicing, receipt and conversion should be explainable.
Small amounts, fees and data quality
Very small rewards and fees can create rounding differences. A documented aggregation and precision method is preferable to automatically ignoring every amount below one cent or recording each as one cent.
Network fees may not come with a conventional invoice, but the file should still retain transaction evidence, business purpose and the method used to value the charge. Absence of a familiar document format is a question to analyse, not an automatic answer on deductibility.
For current requirements, consult the ANC's crypto-asset regulations and our business accounting service.