Topic: Generally Accepted Accounting Practices (GAAP) and the Lightning Network (Read 118 times)

Hello,

Lightning Network payments in an enterprise or a commercial environment should be accounted according to Generally Accepted Accounting Practices. From an accountants perspective your lightning wallet should be accounted for just like a regular bank account that holds fiat money should be.

Lightning invoices and payments might be replacing fiat money in transactions but the necessity for good accounting practices remains even when you are transacting in Bitcoins.

I might go as far as saying if you just have an LLC and you are running bitcoind or lnd on the main network, legally speaking you need to think about what you are doing regards to your accounting. Not doing something like this would be like allowing access to your bank account without a way to look at the account statement.

Looking at the Lightning Network from an accountants perspective, we are dealing with a number of different kind of events:

- Channel opens and closes
- Lightning Network invoices and payments
- On-chain transactions
- Routing fees
- Exotic stuff like push payments

To start cracking this problem we need to think about a few of things:

- All these events with their fees need to be boiled down to a GAAP ledger of debits and credits
- Time of transaction exchange rates need to be used for conversion to main accounting currency
- Data needs to be exported in a format supported by accounting software the company uses

To this end we have created a new solution called snort.tech and just released the first alpha version of the software. Everything is free and we are looking for pilot customers.

To get started go to: https://snort.tech