Cryptocurrency is digital or “virtual” money, which uses cryptography to secure its transactions, control the creation of additional currency units, and verify the transfer of assets.

In contrast to traditional forms of money which are controlled using centralized banking systems, cryptocurrencies use decentralized control. The decentralized control of a cryptocurrency works through a “blockchain”, which is a public transaction database, functioning as a distributed ledger. This has advantages in that two parties can transact with each other directly without the need for an intermediary, thereby saving time and cost.

More and more entities, including private enterprises, are entering into transactions in which they obtain cryptocurrencies. The following are examples of situations in which an entity may obtain cryptocurrencies:

  • An entity may accept cryptocurrency in exchange for goods or services sold in the ordinary course of
    its business;
  • An entity may purchase cryptocurrency with the intention to hold it for investment purposes (i.e., to
    benefit from increases in value);
  • An entity may act as a broker-trader of cryptocurrencies and purchase cryptocurrencies with the
    purpose of selling it in the near future in order to generate a profit from fluctuations in price or brokertraders’
    margin; or
  • An entity may be involved in cryptocurrency mining activities.

Cryptocurrency mining describes the process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Those that perform cryptocurrency mining are generally referred to as “miners”.

Cryptocurrency miners use large amounts of computing power to solve blockchain algorithms. Once a block has been solved by the miner, he may, depending on the mining algorithm, be entitled to transaction fees as consideration for verifying cryptocurrency transactions and entering them in the blockchain ledger. Such transaction fees are specified by the original transacting parties.

Depending on the mining algorithm, the miner may also receive a reward of newly minted cryptocurrency for solving the block, with the amount of the reward being determined by the underlying blockchain software.

ASPE do not contain explicit guidance on how to account for holdings of cryptocurrencies or cryptocurrency mining activity. Furthermore, neither International Financial Reporting Standards (IFRS) nor generally accepted accounting principles in the United States (US GAAP) provide guidance which is appropriate for entities applying ASPE to analogize to in accordance with Section 1100, Generally Accepted Accounting Principles. Download this summary of some of the main accounting issues and, in the absence of specific guidance, our views on the issues.

Next article

Many countries and Canadian provinces have adopted greenhouse gas duties to reduce gas missions that are contributing to climate change. The Canadian government has also taken steps in this direction.

The Canadian Perspective

The Canadian government has introduced a federal carbon pollution pricing system. Among others, this new tax applies to fossil fuels.

The new system applies in provinces and territories that do not have a carbon pricing mechanism in place. The Canada Revenue Agency has responsibility for administering and implementing the fuel charge for the listed provinces. The new tax is applicable as of April 1, 2019 in Manitoba, New Brunswick, Ontario and Saskatchewan and as of July 1, 2019 for Nunavut and Yukon. In addition, the federal fuel levy will apply in Alberta as of January 1, 2020.

The Greenhouse Gas Pollution Pricing Act (the Act) provides for twelve types of registrations, including road carriers, importers and users. Depending on its commercial activities, a person may be required to register.

Download the newsletter below to learn more.

Next article

Artificial intelligence makes it possible for businesses of all sizes to automate processes and carryout tasks that had been previously been impossible to achieve. The result is that businesses are more efficient and stand out in their industry.

This is the particular case of one of our clients, a financial sector organization. This major institutional investor has benefitted from new strategic monitoring opportunities thanks to a natural language processing solution developed by our team specialized in artificial intelligence (AI) and advanced analytics.

Raymond Chabot Grant Thornton - image

Achieving the impossible

Our client wanted to identify a significant number of details on all transactions in a particular sector. It therefore needed a tool to collect and structure information in order to enrich its knowledge for competitive monitoring purposes.

Developing such a tool represented a gargantuan task that was practically impossible with traditional methods because it requires processing thousands of articles published by a variety of sources with the purpose of extracting only relevant data.

The aim was to give the organization the means to achieve its ambitions by creating a solution perfectly adapted to its needs, in collaboration with its innovation team.

Our specialists developed a customized language understanding tool that allows our client to automate information collection and build a valuable database. Its employees can now quickly and easily search through this database according to various parameters.

In this type of assignment, it’s possible to add technological modules to meet clients’ other needs.

For example, we are developing a second tool for this organization that will gather factual data and comments related to its business partners in its various activity sectors, while filtering thousands of information sources.

Invaluable benefits

Thanks to our solution, our client will have a bank of knowledge at its disposal that will enable it to better identify business opportunities and risks and analyze trends of the industries and geographical markets in which it invests in great depth. In other words, our tool will allow the client to always be completely informed about what its competitors are doing and what is going on in the market.

In today’s highly competitive world, information is the key issue. Businesses that stand out are those that are able to efficiently gather and analyze all available information, be it about their market, trends, consumer expectations, technological innovations or other.

Whether it’s to take advantage of new opportunities, as our client has done, or to automate certain processes to improve productivity, AI tools have multiple applications.

In addition to strategic monitoring, natural language processing solutions can be used to collect and structure all legal information across a business’s documents and correspondence. They can extract, collect and structure information pertaining to the client experience or sales cycle to improve customer service or the sales process.

These solutions are also very useful when analyzing documentation during a due diligence process or to extract social media information.

Furthermore, in connection with AI projects, not only are we working with our clients to develop tailored solutions, but we’re also sharing our knowledge so that they can use these tools autonomously. Building on the solution implemented, clients regularly develop new applications to expand on the initially planned uses.

PME Innovation and technologie - RCGT

Next article

The Grant Thornton International IFRS team has published the 2019 version of IFRS Example Consolidated Financial Statements 2019 (hereinafter the “Example consolidated financial statements”).

The Example consolidated financial statements have been updated to reflect changes in IFRS that are effective for the year ending December 31, 2019. These include the adoption of IFRS 16 Leases which becomes effective for accounting periods beginning on or after January 1, 2019. No account has been taken of any new developments published after April 30, 2019.

Download the document below.