Cryptocurrency for Products and Services: A Case Study Illustration on Digital Cryptocurrencies and Their Use in a Business Environment

• In Event: Banking, Working Capital, and Financial Structure

Abstract

This teaching case is intended to help accounting students deepen their understanding of cryptocurrencies and blockchain technology and to study how companies are adapting to this new environment. Students will examine the accounting practices and disclosures being used by companies accepting cryptocurrency for payment of products and services as well as how government institutions and regulating and standard setting bodies, such as the Financial Accounting Standards Board (“FASB”), Securities and Exchange commission (“SEC”) and the Internal Revenue Service (“IRS”), are treating cryptocurrencies.

Using a fictional assignment, a new staff accountant (student) in a CPA firm is tasked by the partner-in-charge to research this topic and write a report so the accounting firm may provide guidance to its clients who are seeking accounting and tax advice. The case uses a mentor character to guide the student through the research and writing process.

Student’s will conduct research into company press releases and SEC filings and will need to research and understand which Generally Accepted Accounting Principles might apply to accounting for cryptocurrencies. Research into relevant SEC and IRS regulations is also required. In addition, student’s will deepen their skills in risk assessment and writing a concise, comprehensive business report.

Authors

• Russell Engel, Southern Connecticut State University

• James Vincent Aselta, Southern Connecticut State University

• David Allen, Southern Connecticut State University