Bitcoin is a type of digital currency, called a cryptocurrency, that has gained acceptance from a number of investors, businesses, and consumers. Like the U.S. dollar, bitcoins are a medium of exchange, but unlike the U.S. dollar, they do not possess physical form, are not legal tender, and are not backed by a government. Overstock.com, Inc. (OSTK) is an online retailer based in Midvale, Utah, that accepts bitcoins as a form of payment. Instructions Answer the following and remember to include proper citations when necessary.
Has FASB (Financial Accounting Standards Board) or GAAP (Generally Accepted Accounting Principles) issued guidance in this area?
How should Overstock.com report its bitcoin holdings in its financial statements?
How should Overstock.com value its bitcoin holdings?
(1)The Financial Accounting Standards Board (FASB) is responsible for creating generally accepted accounting principles (GAAP). As on date there are still no bitcoin (crypto currency )Specific GAAP rules or guidelines in this area.
(2) According to white paper Issued by AICPA bitcoins (crypto currency) is be classified as intangible, and it's is an income for overstock.com so it can be recorded on the asset side in the financial statements.
(3) The price of the bitcoin can be by supply and demand, when the demand of the bitcoin increase the price of the bitcoin increases; and when the demand of the bitcoin decreases the price of the bitcoin will also decrease. So the online retailer overstock.com will be valuing it as per value of it in the current market.
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