Barry Melancon Bats Around the Idea of Bitcoin Complicating the Lives of CPAs At Some Point in the Future

If there was any doubt, now I know for a fact that Barry Melancon — the real Barry, not the obviously fake one that makes disparaging comments here — must read Going Concern because no sooner did I suggest a Certified Global Bitcoin Management Accountant credential than Barry wrote up a post for the AICPA blog on Bitcoin.

In Will Your Clients or Customers Pay in Bitcoin?, you can almost see the light bulb blinking above Barry's head:

Four years ago, a new alternative currency emerged and the accounting profession needs to watch how it develops going forward. It’s a virtual currency known as Bitcoin. Dozens of virtual currencies exist but Bitcoin has garnered the most attention. The news media has been covering the currency in earnest since the spring, including its growing acceptance among businesses and even a foreign university.

What does that mean for our profession? First, if Bitcoin were to become a mainstream currency option, firms would have to consider clients using Bitcoin as a form of payment for services, and a business might want to accept Bitcoins for purchases of its products.

I am fairly sure there are already clients out there who already use Bitcoin. The real question is are they talking to their CPA about it? Did the guy in Florida who just "bought" a Tesla Model S "with Bitcoin" talk to his CPA about it?

The problem here — as Barry points out — is that no one really knows how to classify Bitcoin yet.

More broadly, how might financial statement preparation and assurance on those statements need to adapt? Bitcoin is not only a currency, it is also a commodity – one with a finite supply (currently 12 million units and continually increasing to a maximum of 21 million units).  Therefore, depending on the demand for it at any given time, its value could fluctuate wildly – even within the same day. In 2013 alone, a single Bitcoin unit was valued at less than $20 and hit a high of more than $1,000 in late November. So, how would a CPA value that money, and is it even an asset? And since Bitcoin largely operates through online exchanges, it functions outside of the traditional banking system, where balances and transactions can easily be confirmed.  In terms of taxes, the Internal Revenue Service has said Bitcoin transactions could fall under several categories: property, financial instrument, foreign currency or barter.

That issue is clearly TBD.

Ultimately, consumers will decide whether Bitcoin gets accepted in the marketplace. However, the government’s interest, coupled with growing momentum among businesses and investors, does pose a question to the accounting profession. Is Bitcoin a new, acceptable form of money? More importantly, are we ready if it is?

Well, since CPAs are such dynamic innovators (at least that's what I hear at almost every single accounting conference I attend), surely they are already preparing for the future. Like this guy, who is a CPA and Certified Fraud Examiner writing about tax and accounting issues surrounding Bitcoin. As in, like, before Barry decided to say maybe the profession should consider taking Bitcoin seriously enough to figure out how to handle it.

Peep his not one, not two but three part series on using Bitcoin with Quickbooks. And check this out, Barry, this CPA accepts Bitcoin as payment from his clients. THE FUTURE IS HERE OMG!

Our takeaways are this:

  • There will be no Certified Global Bitcoin Management Accountant credential any time soon (blast!)
  • 99.5% of "trusted financial advisors" have no idea how to treat Bitcoin, or what it is, really, nor do regulators
  • There is at least one CPA accepting payment from clients in Bitcoin and he's so cool, Barry Melancon has never heard of him
  • Barry Melancon probably isn't buying cars with Bitcoin, nor is it likely you will be able to pay your AICPA dues with it in the near future

Did I miss anything?

 

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