With the advent of blockchain technologies, companies must integrate digital assets into their accounting systems. ANC Regulation No. 2020-05 specifies the accounting treatment of tokens and other digital assets, underlining how crucial this integration is for financial transparency and regulatory compliance.

Analysing the ANC regulation

Accounting for tokens held (Article 619-12)

Tokens held by a company must be recognised as current assets. When a business holds tokens:

• Account 522 “Tokens held”: Records the tokens as assets.
• Changes in fair value of the tokens are recorded in:
• Account 47862 “Measurement differences – ASSET” for decreases in value.
• Account 47872 “Measurement differences – LIABILITY” for unrealised gains.

Loans and borrowings of tokens (Article 619-18)

For token-lending transactions:

• Account 524 “Tokens borrowed”: Used by the borrower to recognise the tokens as assets.
• Accounts 47862 and 47872: Adjust token values to current market prices.

Token derivatives (Article 619-19)

Derivative transactions with tokens as the underlying asset are accounted for under the same rules as other forward financial instruments:

• Accounts 628-1 to 628-18: For hedging operations and derivative instruments.

Custody services for third parties (Article 629-1)

For digital-asset custody services provided on behalf of third parties, the service provider must not recognise the assets on its balance sheet, unless segregation conditions are not met:

• Account 521 “Tokens in custody”: May be used to recognise the digital assets as assets if segregation fails.

Practical implications for companies

A. Accounting approach

Digital assets must be accounted for according to the type of operations performed. This can include:

• Mining income: Account 522 “Tokens held”.
• Staking income: Account 522 “Tokens held”.
• ICOs: require analysis of the tokens issued (liabilities, equity instruments, etc.).

B. Legal qualification of NFTs

It is essential to determine the legal qualification of NFTs before accounting for them. This classification directly impacts the accounting treatment.

C. Tax rules and VAT

Uncertainty remains regarding the VAT regime applicable to digital assets. A tax ruling may be required to clarify the treatment.

D. Capital gains and calculation methods

For companies, capital gains must be calculated for every transaction, whether fiat/crypto or crypto/crypto. Accepted methods include:

• Weighted Average Cost (WAC).
• First In, First Out (FIFO).

Every realised gain is taxable, making it critical to closely monitor changes in asset values.

Conclusion

Accounting for digital assets requires thorough analysis and a clear understanding of the transactions performed. Staying abreast of the latest regulations is essential to ensure the company’s accounts remain compliant.