Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
Cryptocurrency and token accounting in Ukraine
Cryptocurrencies and tokens are specific accounting objects, in particular due to the lack of direct legislative regulation. Proper accounting of cryptocurrencies and tokens is important for the proper reflection of financial condition, determination of financial performance, as well as ensuring transparency of reporting (including tax). The article below is designed to examine the main points of accounting for these assets and identify the main regulatory provisions that accountants should rely on.
Definition of cryptocurrency for accounting
Cryptocurrencies and tokens are identified as intangible digital assets. Their existence is recorded in decentralized electronic systems with cryptographic data protection. Transactions with cryptocurrencies provide a high level of protection and transparency of operations. Owners of cryptocurrencies and tokens in Ukraine have the opportunity to trade these assets, use them as a means of payment when purchasing certain goods and services. These funds can also serve as capital investments and replenish the authorized capital of the enterprise.
Back in 2019, the State Tax Service provided clarifications on the taxation of cryptocurrencies and classified them as intangible assets of the enterprise in accordance with the provisions of IAS 38 “Intangible Assets”. Moreover, if cryptocurrency is held by an enterprise for the purpose of sale within the framework of its ordinary business activities, then its accounting is regulated by IAS 2 “Inventories”. The most common option is to reflect them in inventories.
Features of accounting for cryptocurrencies and tokens in Ukraine
Documentary registration of transactions with cryptocurrency
Today, Methodological recommendations for accounting for intangible assets have been approved, according to which the following forms of primary accounting documentation can be used to document transactions with cryptocurrencies and tokens as a type of such assets:
- act of introduction into circulation of intangible assets. Can be used to register the initial recognition of cryptocurrency as an intangible asset, when it is purchased, obtained as a result of mining;
- inventory card. This card can be used to maintain analytical accounting for each unit of cryptocurrency;
- act of disposal of an object as part of intangible assets. It should be registered in the event of sale, transfer, or other write-off;
- inventory description. Can be used when conducting an inventory to confirm the availability and accounting value on a certain date of a certain intangible asset.
If a company accounts for cryptocurrencies as part of its inventory, then basic primary documents (e.g., acceptance and delivery notes, invoices, etc.) adapted to reflect their specifics can be used to document transactions with them. It is also recommended that the company’s accounting policy clearly define the procedure for accounting for cryptocurrencies to ensure the legality of such activities.
Accounting entries for accounting for cryptocurrencies and tokens
It is important to determine how the company accounts for cryptocurrencies and tokens (intangible assets, inventories, financial investments) before using the main accounting entries, since the use of the corresponding accounts will depend on this. Below are the main nuances of their reflection in accounting:
- purchase of cryptocurrency and token: D-712, K-312;
- transfer of contribution to the authorized capital and write-off of the residual value: D-377, K-125;
- exchange for a similar unit: D-154, K-685;
- proportional depreciation (for an asset received free of charge): D-424, K-745 and others.
How can accountants of “Prikhodko & Partners” help?
Qualified accountants of the law firm “Prikhodko & Partners” can provide a wide range of professional services to help your business effectively manage finances within the framework of the law. Below is a basic list of services provided by our specialists:
- online consulting on accounting and taxation;
- full accounting services for primary documentation, financial reporting;
- development of the company’s accounting policy (as part of the service of accounting and legal support for business in Ukraine);
- elimination of errors and bringing accounting into line with the requirements of current national legislation;
- correct calculation of taxes, submission of tax reports, implementation of tax planning and optimization at the enterprise;
- personnel accounting, including payroll calculation, maintenance of personnel documentation.
The law firm “Prikhodko & Partners” has been serving clients from various business areas for many years. Our experienced accountants take into account the specifics of your specific request, take on all functions of document optimization and financial control, and ensure timely reporting.
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