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TECHNOLOGY

CONSIDERATIONS THAT INFORM A DIGITAL Start small
ASSET STRATEGY If the challenges of digital asset accounting and
For those who are considering entering the digital tracking seem daunting, consider testing the waters
assets market, Jacob, Solanki, and Loban offer the before you dive in, Solanki suggested.
following tips to address the technological chal- Any business selling a service or product in
lenges of accounting for and tracking cryptoassets: exchange for cryptoassets can engage a crypto
payment processor, which accepts digital asset pay-
ments from its customers worldwide and converts
them into legal currency, such as U.S. dollars or
euros. The business is sheltered from the volatil-
ity risk should the value of the cryptoassets drop
AICPA RESOURCES suddenly as well as from any charge-back risk, and
Articles from managing the conversion workflow including
accounting, tax, and audit impacts, she said. The
“Cryptoasset Accounting: Tips for Common Scenarios,” JofA,
Jan. 26, 2022 standard processing fee is 1% of each settlement.
A 2020 study BitPay conducted with consulting
“Crypto Curious? What to Know Before Accepting Digital Payments,” firm Forrester suggested that enterprises accepting
FM magazine, Dec. 1, 2021
cryptoassets attract new customers and increase
“A Take on Cryptoasset Transactions, Investments, and Risk,” JofA, their average order value.
Sept. 1, 2021
Merchants using BitPay as a crypto payment
“Fair Value, Stablecoins Addressed in New AICPA Guidance,” JofA, processor include AT&T and Microsoft, So-
Oct. 8, 2020 lanki added.
Another way to test the waters is to use
cryptoassets for payroll purposes such as paying
employee bonuses and vendors and contractors
with cryptoassets. “That’s another way where you
need not have the crypto on your books, yet you
What a digital asset working group will be able to be involved in the space,” she said.
Paying payroll in crypto has also been an attractive
needs to research recruiting strategy.
One business using cryptoassets for payroll
Before businesses take on cryptoassets, they need to gather information
that will assist in planning a digital asset strategy. Aaron Jacob, CPA, CGMA, purposes is MicroStrategy. The publicly traded
who heads the ERP business at TaxBit, provided a list of questions for a software and consulting company, which also
working group to pursue: invests in digital assets, decided about a year ago to
pay its nonemployee directors in bitcoin, according
■ Which stakeholders need to be involved in digital asset considerations to filings with the SEC.
and why?
Involve all your stakeholders
■ What policies can and should exist to drive digital asset adoption and
involvement? The decision to add cryptoassets to the books
requires an investment in technology but also
■ What is the scope of your digital asset strategy, and has that strategy new policies and procedures, all of which requires
been adequately documented? buy-in from stakeholders inside and outside of the
■ What exchange and execution partners will you work with? What business, Jacob said. “When you’re thinking about a
custody partners and wallet services will you use? What protocols and solution to implement, you need to make sure that
blockchains will you participate in? you go through a robust process and identify the
right partner to support your business needs today,
■ Which functional groups need to be consulted before you can transact in and into the future.”
digital assets?
Key stakeholders include the accounting, tax,
■ Do you have the internal expertise and tools necessary to perform critical treasury, and data security teams, but operations and
tax and accounting functions such as lot-level tracking and impairment legal teams may also have to get looped in as well as
testing? If not, what thought partners and software providers can you the business’s auditors and investors, he said.
rely on? Getting the board involved early in the discus-
sion is crucial, Loban said. “The sooner you can

30 | Journal of Accountancy July 2022