Cryptocurrencies, which are also known as virtual currencies or digital currencies, are a form of electronic money. Each cryptocurrency, such as Bitcoin, has a blockchain is a continuously growing electronic record that tracks ownership and holds a history of every Bitcoin transaction.

Units of cryptocurrency can be mined in units called blocks. Mining, which requires significant computing power, involves solving cryptographic puzzles. Miners receive a reward in the form of units of cryptocurrency for each block mined and verified.

In addition, there are exchanges, such as Coinbase, where cryptocurrency units can be bought or sold for conventional currency. The market for many cryptocurrencies has proved to be very volatile. For example, Bitcoin reached a high of US$20,000 in December 2017 before falling to US$5,000 in June 2018. In 2019, the price of Bitcoin started to rise again and reached US$13,000 in June 2019.

Cryptocurrencies can be used to make payments although they are not legal tender and are not widely accepted as a form of payment.

During 2018 and 2019, Christchurch Ltd used its substantial computing operations to mine two blocks of Bcoin which is a relatively new cryptocurrency. These blocks were verified and Christchurch Ltd was rewarded with 20 units of Bcoin on 1 May 2019. In addition, on 1 June 2019, Christchurch Ltd paid $10,000 to purchase 10 units of Bcoin through a cryptocurrency exchange. The market price of one unit of Bcoin was $600 on 1 May 2019, $1,000 on 1 June 2019 and $300 on 30 June 2019.

Required:

(a) Explain whether Christchurch Ltds Bcoin (both mined and purchased) satisfies:

(i) The definition of an intangible asset in accordance with AASB 138 Intangible Assets,

(ii) The recognition criteria for an intangible asset in accordance with AASB 138 Intangible Assets.

(b) If Bcoin was recognised by Christchurch Ltd as an intangible asset, explain:

(i) How the Bcoin would be measured on initial recognition and subsequent to initial recognition,

(ii) Whether the useful life of the Bcoin would be assessed as finite or indefinite.