Topic: Bitcoin accounting... (Read 2382 times)

For a practical solution connecting with your accounting software have a look at https://snort.tech

Thanks for that link big red.

Thanks for the links - I will check them out.

Well Bitcoins aren't a currency as recognized by the government, so can't you just declare all the BTC deals as barter and pay taxes regarding barter for these?

And what about declaring them as a commodity necessary to business practice. IIRC taxes only apply on profit, so you could hold onto the BTC indefinitaly, then convert to USD in one batch and pay taxes on that. Also, as long as the BTC volume remains small, you could declare all converted BTC as going towards paying wages, which would exempt them of taxes.

http://www.mscs.dal.ca/~selinger/accounting/tutorial.html

Is an excellant tutorial on dealing with multiple currencies, including commodities etc, which although obviously not legal / real currencies, for many accounting purposes may as well be.

I think it fits accounting with bitcoin very well.

Obviously it will depend on your contry. I buy things in USD and pay taxes in CLP. The way I do it is declare however much I exchange with a receipt. If I make a transfer to the US for something that is 1000 usd and my bank charges me 500000 clp that is what I pay on obviously works for incoming too. Now i am worried about btc because the government will want a receipt etc

Seeing how btc isnt recognized by the irs I suppose you could cash in whenever you want and pay tax on that. Obviously if you spend btc it could be another issue.

IAS 21 covers this, I believe.
- http://www.ifrsclass.com/gaap/ias/ias-21.htm
- http://www.slideshare.net/achawla/ias-21-foreign-currencies

Apparently there are multiple methods allowed, including using an average exchange rate, or using previous day's closing rate.

Ok, any accounting gurus here?

Let say I've got a good ecommerce friend to accept bitcoins.
He offers up the checkout page and gives the consumer the option to pay in bitcoins, and everyone decides to pay in bitcoins....hurray a success, or so we think....

The merchant would still like to complete the sale in their backend accounting in USD to properly record events to accounting - this is a legal business!
Each sales invoice is tendered as USDBTC to store it separate from other tender options. Tax is collected and posted in USD to the correct accounts.
We know that the amount in USDBTC represents USD that was paid in bitcoins, and our online conversion process was done correctly in realtime on the website.
From the consumers perspective the transaction was completed in bitcoins and they sent the correct amount of bitcons.

At the end of the day the accounting dept has to reconcile the USDBTC ( lets say $1000.00 in sales USDBTC to keep simple) tenders into bitcoins.

Each sale could have a different exchange rate...complicates things for accounting even more.

Accounting would need to convert the USD into bitcoin.

Lets say you enter something like the following in your accounting.
Assume exchange rate is $1.00 = 1.25 bitcoins
Credit BTCUSD for 1000.00 to get the balance to zero
Debit BTC for 1000*1.25 1250.00 (should already be in your bitcoin wallet).
Debit 250.00 to what (the business will not put this in miscellaneous income)  


Sorry if this is trivial ... it will not be to small businesses...