ACCOUNTING FOR CRYPTO CURRENCY TRANSACTIONS: CHALLENGES AND IMPLICATIONS UNDER CURRENT FINANCIAL REPORTING STANDARDS

IBRAHIM ABUBAKAR; MUHAMMAD ABUBAKAR; ALHAJIE DRAMMEH; IKILIMATU ADAMU UMAR

Authors

IBRAHIM ABUBAKAR Department of Economics and Finance Accounting Unit, School of Business and Public Administration University of the Gambia. Author
MUHAMMAD ABUBAKAR Department of Estate Management School of Environmental Technology Nigerian Army University Biu Borno State. Author
ALHAJIE DRAMMEH Department of Economics and Finance Tourism Unit, School of Business and Public Administration University of the Gambia. Author
IKILIMATU ADAMU UMAR Department of Accountancy, School of Business Studies, Federal Polytechnic Bauchi, Nigeria. Author

Abstract

Crypto currency has emerged as a significant asset class in the global financial system, yet its treatment within accounting and financial reporting frameworks remains underdeveloped. This paper explores the challenges businesses face in accounting for crypto currency transactions under current financial reporting standards, particularly the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). With a focus on classification, valuation, and measurement, the study highlights key issues such as the ambiguity in recognizing crypto currencies as intangible assets, inventory, or financial instruments. To achieve this the researcher reviewed and synthesized relevant literature on the topic by examining the work of previous scholars, employing descriptive and content analysis of documented texts and academic articles. The findings emphasize the need for regulatory bodies to provide clearer guidance, as well as the importance of adapting accounting practices to reflect the unique nature of crypto currency. And recommend accounting professionals must engage with regulators and standard-setting bodies to advocate for more robust and consistent as well as uniform frameworks that address the complexities of cryptocurrency transactions. The future of accounting will require a dynamic approach to accommodate the rapid changes in digital asset markets.