A Year of Crypto in the Accounts, Reviewed

The first year end with crypto in the accounts took eleven hours of tidying up. The second took under two.

What changed

We captured the euro value at the time. Every transaction, as it happened, from a stated rate source.

The first year I had crypto amounts and no euro values, which meant looking up historical rates transaction by transaction. For anyone in the same position, a licensed crypto payment processor sets out the same terms without requiring an account.

We chose one rate methodology and wrote it into the policy. The rate at the transaction timestamp.

The first year our records used different methods depending on which platform produced them, so nothing reconciled cleanly.

We changed platform. The previous one did not report fees in euros and did not state its rate source.

Fees are a separate disposal stream and finding them on a block explorer per transaction was most of the eleven hours.

What she asked this time

Whether the policy had changed. It had not.

Whether the balance at year end matched the platform statement. It did.

Whether there were disposals we had not recorded. There were not, because we convert on receipt and hold nothing.

That was the whole conversation.

The policy question she raised in year one

Which rate, from which source, at which time.

Any is acceptable, she said, provided it is consistent and written down. Switching between them is what causes problems, and that is what we had been doing without realising. If you are being paid rather than paying, a provider handling crypto settlement for property transactions handles the same thing in reverse.

The thing that made the largest difference

Converting on receipt rather than holding.

A held balance requires valuation at each reporting date and a disposal recorded on each conversion. Converting immediately means revenue in euros and a fee, and nothing on the balance sheet.

That single policy choice removed most of the year end work.

What I would tell someone in year one

Ask your accountant what they will need before you start, not at the year end.

She told me in twenty minutes what would have saved eleven hours, and I had not thought to ask because I assumed the complexity was in the tax treatment. If you want to see all of this in a real product rather than in my account of it, a regulated European crypto platform publishes the terms.

It is not. The treatment is straightforward. The record keeping is hard only when it is done afterwards.