ICAZ retains eye on use of cryptocurrencies

Business Reporter
The Institute of Chartered Accountants Zimbabwe (ICAZ) suggests it will not be caught flat-footed with regards to use of cryptocurrency, which continues to obtain traction as a medium of exchange.

Cryptocurrency is digital funds, centered on blockchain technological innovation. It’s crucial attribute, compared with fiat revenue, is that it does not fall less than the regulatory purview of central financial institutions and capabilities as a peer-to-peer process.

But inspite of its disruptive mother nature, critical world gamers are significantly adopting it, thus giving its prospects of going mainstream. As these kinds of, companies could sooner or later be forced to account for the novel payments method.

But cryptocurrencies currently current a lot of worries for common accounting methods in organizations.

ICAZ claimed it is holding a shut eye on developments all over reporting troubles on cryptocurrencies.

“From an ICAZ viewpoint we are presently up to pace with the accounting and reporting considerations on cryptocurrencies as we get included in such conversations at global amounts,” claimed ICAZ chief executive officer Gloria Zvaravanhu not long ago. “Our users in jurisdictions the place these are an acknowledged currency are by now having to offer with the accounting and reporting facets.”

Some of the large worldwide firms that have considering the fact that moved to accept cryptocurrencies consist of: Expedia, Microsoft, Starbucks, Amazon, Visa, PayPal and JP Morgan, among the other people.

The Affiliation of Chartered Certified Accountants (ACCA) has available some strategies, specifically with regard to Intercontinental Accounting Common 38.

This normal outlines the accounting specifications for intangible assets, which are non-monetary belongings which are without actual physical material and identifiable.

“Cryptocurrencies are a variety of digital cash and do not have physical substance. Consequently, the most proper classification is as an intangible asset.

“IAS 38 will allow intangible assets to be calculated at charge or revaluation. Working with the cost design, intangible belongings are measured at cost on original recognition and are subsequently measured at price tag a lot less accumulated amortisation and impairment losses,” mentioned ACCA in a notice.

“Using the revaluation design, intangible belongings can be carried at a revalued total if there is an lively current market for them on the other hand, this may perhaps not be the case for all cryptocurrencies.

“The identical measurement model need to be made use of for all property in a specific asset class. If there are belongings for which there is not an active market place in a class of assets calculated employing the revaluation design, then these assets really should be measured utilizing the price model.”

In Zimbabwe, the Reserve Bank of Zimbabwe (RBZ) banned banks from processing cryptocurrency payments in 2018, and has preserved its really hard stance on cryptocurrencies by excluding them from its Fintech Regulatory Sandbox, which was declared in the Financial Coverage Statement earlier this calendar year.

Having said that, going with periods, the country’s most important financial institution, CBZ recently declared it was searching into the risk of contemplating cryptocurrencies. — businessweekly