NOEWE management consulting team successfully presented and clarified the specifics of crypto asset accounting

2024-09-26

NOEWE management consulting team successfully presented and clarified the specifics of crypto asset accounting principles to the representatives of the Authority of Audit, Accounting, Property Valuation and Insolvency Management under the Ministry of Finance of the Republic of Lithuania (hereinafter referred to as the Authority).

Project initiator – Crypto Economy Organisation, an association uniting participants of the cryptocurrency market in Lithuania.

Currently, the Authority’s guidelines treat all crypto-asset service providers as entities operating on their own account, with no provision for cases where a crypto-asset service provider transfers client orders to a liquidity provider and does not assume the risks or benefits associated with the crypto asset, i.e., operates as an agent.

To ensure a sustainable and objective approach to accounting for companies providing crypto-asset services and to reduce their regulatory burden, NOEWE management consulting team, relying on International Financial Reporting Standards (IFRS), provided a well-reasoned clarification, which outlines the possibility for crypto market participants to apply accounting principles based on their chosen business model. The proposed accounting methodology would allow crypto-asset service providers operating as agents to recognize only the commission fees as revenue as opposed to the full value of the crypto assets bought by clients.

The Authority’s representatives agreed with the clarification provided and the recommendations project has been submitted for review to the Ministry of Finance of the Republic of Lithuania, the State Tax Inspectorate, and the Bank of Lithuania.

NOEWE Management Consulting team on this project:

Ignas Aničas, Associate Partner.
Augustas Blažys, Management Consultant
Julius Leonavičius, Business Analyst

Crypto Economy Organisation is an independent, government-supported association established to represent the interests of the crypto economy professionals as well as Web3 companies and to satisfy public interests through education, training, events and other activities of public benefit.

https://www.cryptoeconomy.world