CCA Cryptocurrency Taxation & Accounting 2

Question 1

Under US GAAP, how was cryptocurrency typically classified on the balance sheet before FASB ASU 2023-08?

Accepted Answer

As an indefinite-lived intangible asset

Answer

Under existing US GAAP before ASU 2023-08, most cryptocurrencies were classified as indefinite-lived intangible assets subject to impairment testing.

Question 2

What does FASB ASU 2023-08 require regarding the measurement of certain qualifying crypto assets?

Accepted Answer

Fair value measurement with changes recognized in net income

Answer

FASB ASU 2023-08 requires entities to measure qualifying crypto assets at fair value each reporting period with changes recognized in net income.

Question 3

What is the FIFO method as applied to cryptocurrency cost basis accounting?

Accepted Answer

The oldest acquired coins are considered sold first

Answer

FIFO (First In, First Out) assumes the first cryptocurrency units purchased are the first sold, which can result in higher taxable gains during bull markets.

Question 4

Under IFRS, which standard may apply if a company holds cryptocurrency as inventory for sale in the ordinary course of business?

Accepted Answer

IAS 2 — Inventories

Answer

Under IFRS, if cryptocurrency is held for sale in the ordinary course of business (e.g., by a broker-trader), IAS 2 may apply, allowing measurement at fair value less costs to sell.

Question 5

What was the key limitation of the indefinite-lived intangible asset treatment for cryptocurrency under old US GAAP?

Accepted Answer

Impairment losses were permanent and could not be reversed

Answer

Under the old indefinite-lived intangible asset treatment, impairment losses on cryptocurrency were permanent — even if fair value subsequently recovered, the write-down could not be reversed.

(CCA) Certified Cryptocurrency Auditor Practice Test

(CCA) Certified Cryptocurrency Auditor Practice Test

CCA Cryptocurrency Taxation & Accounting 2