Crypto accounting basics: key words

A way of keeping books in which every transaction is recorded as a debit in one account and a credit in another, so total debits always equal total credits. Source

The two sides of every account: debits on the left, credits on the right. An increase in an asset is a debit; an increase in a liability is a credit. Source

What an asset cost to acquire. For crypto bought with cash, PwC says this is the cash paid, including transaction costs. The realised gain or loss is the sale price minus the cost basis of what was sold. Source

A cost method that treats the units bought first as the first ones sold. Source

A cost method that matches the actual cost of the exact units sold, which only works if those units can be identified. Source

A cost method that spreads the cost of all the units held evenly across them. IFRS calls it the weighted average cost formula. Source

The price you would receive to sell an asset in an orderly transaction between market participants on the measurement date. It is an exit price. Source

The market with the greatest volume and level of activity for an asset that the holder can access. Fair value is measured using its price. Source

The FASB's 2023 rule that requires crypto assets in its scope to be measured at fair value, with changes recognised in net income each reporting period. Source

The older US model for crypto: hold it at cost, write it down when its value falls, and never write it back up until it is sold. Source

Writing an asset down because its carrying amount is more than the amount that can be recovered from it. Source

Under IAS 36, the higher of an asset's fair value less costs to sell and its value in use. Source

An IAS 38 option to carry an intangible asset at fair value, open only where there is an active market. IAS 38 puts rises in other comprehensive income, unless they reverse an earlier fall charged to profit or loss; KPMG's summary shows rises above cost going there for crypto. Source

Items of income and expense that IFRS Standards say are not recognised in profit or loss. Source

The estimated selling price in the ordinary course of business, less the estimated costs to complete and sell. IAS 2 inventory is measured at the lower of cost and this amount. Source

Recording each transaction in the correct accounting period. Auditors test it, and EY says crypto reconciliations should include adequate cut-off procedures. Source