Accounting for Cryptocurrencies: the financial reporting requirements and an empirical analysis

The rise of cryptocurrencies has significantly transformed the financial sector, introducing a decentralized and innovative asset class that defies conventional financial norms. This thesis examines the current landscape of accounting regulations for cryptocurrencies, focusing on the challenges and implications for financial reporting. Given their unique characteristics, cryptocurrencies pose significant difficulties in terms of classification, measurement, and disclosure, which are further compounded by the divergent regulatory approaches adopted globally. Through a comprehensive review of existing literature, regulatory frameworks, and case studies, this research identifies the key issues faced by accountants and auditors in handling cryptocurrency transactions and valuations. The study explores various regulatory perspectives, highlighting the efforts and inconsistencies among different jurisdictions. Additionally, it assesses the impact of these regulatory practices on businesses, investors, and the financial market at large. The aim of this thesis is to suggest that the lack of standardized accounting guidelines for cryptocurrencies leads to significant discrepancies in financial reporting, potentially affecting market transparency and investor confidence.