Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 Case 20-6 Classification of Cryptocurrency Holdings Software Provider (the Company) supports and sells computer software. The Company accepts cryptocurrencies (eg., Bitcoin, Ether, Ripple) as

image text in transcribed
image text in transcribed
image text in transcribed
1 Case 20-6 Classification of Cryptocurrency Holdings Software Provider (the "Company) supports and sells computer software. The Company accepts cryptocurrencies (eg., Bitcoin, Ether, Ripple) as payment for the sale of its computer software, The Company holds its cryptocurrencies partially for investment (e.g., expectation that they will appreciate in value) and partially to use in the future to purchase goods or services. Cryptocurrency is a new type of value and payment method that is different from fiat currency (e.g., U.S. dollars and foreign currencies). Presently, cryptocurrencies have no government backing or recognition by a central authority as legal tender. Their value is only supported by supply and demand Cryptocurrencies do not have a physical form but exist as immitable distributed ledgers (electronic records) maintained on public blockchains. They are different than electronic instances of cash, such as an online bank account, in that they are not linked to a physical currency. Bitcoin and other similar coins" use cryptography (eg, use of codes to secure communications) to control the security and creation of these coins, which led to the term "cryptocurrencies." There are other crypto-assets that are not cryptocurrencies, such as tokens. It is important to distinguish between cryptocurrencies and tokens. Cryptocurrency is a unit of value that is native to a blockchain. It is a means of exchange within the blockchain to incentivize the network of participants to use the blockchain. The sole purpose of a cryptocurrency is for exchange of value, and it has limited functionality beyond that A token is a piece of business logic (i e., "smart contract") coded into an existing blockchain. A token can have a functionality beyond an exchange of value - it can represent any asset or functionality desired by the developer for use on a platform Tokens may be an interest in an entity (e.g., security token), an interest in a specific asset (asset token), or a right to a future product or service (utility token). Cryptocurrencies are usually obtained by purchasing or receiving them on a peer-to-peer basis. That is, they can be received directly from a counterparty in exchange for an asset or service or they can be purchased in exchange for a fiat currency, often from an exchange that specializes in cryptocurrencies For a cryptocurrency to function as a means of peer-to-peer exchange, a ledger needs to be maintained for tracking ownership of the cryptocurrency. For cryptocurrencies, this electronic ledger is maintained using blockchain. There are many copies of this ledger and many ledger keepers. Distributing the processing allows many users to each play a small part in the maintenance of the ledger system, this means that the security of the system does not rely on a few individuals G - represent any asset or functionality desired by the descoper for use on a platform Tokenis may be an interest in an entityce security token an interest in a specific asset (asset token), or a night to a future product or service utility oken Cryptocurrencies are usually obtained by purchasing or receing themes a peer-to-peer basis That is, they can be received directly from a contcrparty in exchange for an asset or service or they can be purchased in exchange for a fiat curency, olen from an exchange that specializes in cryptocurrencies For a cryptocurrency to function as a means of peer-to-peer edge leder needs to be maintained for tracking ownership of the cryptocurrency. For cryptocurrencies, the electronic ledger is maintained using blockchain. There are many copies of this leder and many ledger keepers Distributing the processing allows many users to cach play a small part in the maintenance of the lodpet system this means that the security of the system does not rely on a few individuals Chiconym The amount of coms for a particular cryptocurrency than istightly controlled For comple, for Betoon there is on the number of commutat No Bitcom and only crew I payment to processo called manera pred the sense of valuating and distributing an clocrom leder the transactions as volved maintaining the blockchain pat JUUL UL A. Explain the issue as you see it and what challenges there are in addressing the matter in this specific instance and more broadly. B. Ultimately you must decide on how you want to treat the issue and support your decision with relevant research and citations which you feel support your argument. C. link directly to any accounting standards or sources of information you use in your analysis. 3 1 C

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting A Practical Approach

Authors: Jeffrey Slater, Debra Good

14th Canadian Edition

0135222419, 978-0135222416

More Books

Students also viewed these Accounting questions