The Complete Guide to
Crypto Accounting
Master digital asset accounting from cost basis to reconciliation. Everything finance teams need to accurately track, report, and audit cryptocurrency.
Why Crypto Accounting Is Different
Traditional accounting wasn't designed for digital assets. Understanding these differences is the first step to getting it right.
Traditional Accounting
Assumed- Clear ownership boundaries
- Defined transaction counterparties
- Stable fiat currency pricing
- Business hours transactions
- Established regulatory frameworks
Crypto Accounting
Reality- Pseudo-anonymous transactions
- Self-custody & multi-chain assets
- 24/7 volatile pricing
- Instant global settlement
- Evolving regulatory landscape
Cost Basis Tracking
The cost basis is the original value of a crypto asset for tax and accounting purposes. Accurate cost basis tracking is essential for capital gains calculations, tax reporting, and audit compliance.
First In, First Out
Oldest purchases are sold first. Simple, widely accepted, often results in higher gains in rising markets.
Last In, First Out
Newest purchases sold first. Can reduce gains in rising markets. Not accepted in all jurisdictions.
Specific Identification
Choose which specific lots to sell. Maximum flexibility, requires detailed record-keeping.
Average Cost
Average cost of all holdings. Simplest calculation, commonly used for mutual funds.
Example: FIFO Cost Basis
Chart of Accounts for Crypto
A well-designed chart of accounts is the foundation of accurate crypto accounting.
Asset Accounts
- 1100 Digital Asset Holdings
- 1101 └ Bitcoin (BTC)
- 1102 └ Ethereum (ETH)
- 1110 Exchange Balances
- 1120 Cold Storage
- 1130 DeFi Positions
Income Accounts
- 4100 Trading Gains
- 4200 Staking Rewards
- 4300 Yield Income
- 4400 Airdrop Income
- 4500 Mining Revenue
Expense Accounts
- 5100 Trading Losses
- 5200 Trading Fees
- 5300 Gas Costs
- 5400 Impermanent Loss
- 5500 Custody Fees
Transaction Categorization
Properly categorizing transactions is critical for accurate reporting and tax compliance.
Trades
- Buy orders
- Sell orders
- Token swaps
- DEX trades
Transfers
- Wallet to wallet
- To/from exchanges
- Cross-chain bridges
- Internal moves
Income
- Staking rewards
- Lending interest
- Airdrops
- Mining rewards
Expenses
- Transaction fees
- Gas costs
- Protocol fees
- Service charges
DeFi
- LP deposits/withdrawals
- Yield farming
- Borrowing/lending
- Liquidations
Reconciliation Process
Regular reconciliation ensures your books match on-chain reality. This is your first line of defense against errors and discrepancies.
Match Exchange Records
Compare exchange transaction history with your accounting ledger entries.
Verify On-Chain Balances
Check wallet balances against blockchain data for each asset.
Account for All Transactions
Ensure every deposit, withdrawal, and trade is recorded.
Investigate Discrepancies
Research and resolve any differences between records and reality.
Recommended Frequency
Accounting Standards
Understanding the regulatory landscape is essential for compliant crypto accounting.
US GAAP
Under US GAAP, cryptocurrencies are typically treated as:
- Indefinite-lived intangible assets
- Subject to impairment testing
- No write-up when value increases
FASB ASU 2023-08 introduces fair value accounting for certain crypto assets.
Learn about FMV →IFRS
Under IFRS, treatment depends on entity's use:
- Intangible assets for holders (IAS 38)
- Inventory for dealers (IAS 2)
- Fair value option may be available
IASB continues to monitor developments but has not issued crypto-specific guidance.
Emerging Standards
Watch for developments in:
- Fair value measurement guidance
- Crypto-specific disclosures
- Stablecoin accounting treatment
- DeFi position classification
Stay informed as both FASB and IASB develop crypto-specific requirements.
Best Practices
Follow these principles for accurate, audit-ready crypto accounting.
Real-Time Tracking
Don't wait until month-end. Track transactions as they happen through API connections and blockchain monitoring.
Documentation
Maintain comprehensive records: transaction hashes, wallet addresses, exchange records, and counterparty information.
Consistent Methodology
Choose your cost basis method, pricing sources, and recognition policies-then apply them consistently.
Regular Reconciliation
Reconcile frequently. Daily for high-volume, weekly for active accounts, monthly full reconciliation at minimum.
Audit Preparation
Be audit-ready with complete transaction logs, cost basis calculations, supporting documentation, and policy memos.
Ready to Master Crypto Accounting?
Coincile automates the hard parts-transaction import, cost basis tracking, categorization, and reconciliation-so you can focus on analysis and strategy.
- 95%+ auto-categorization
- Real-time exchange sync
- Multi-chain tracking
- Audit-ready reports