A plain checklist for accountants and finance teams whose company holds, or is considering, bitcoin. The rules below come from the accounting and tax notes in the sizing guide, set side by side. Confirm the treatment for your company with your own adviser.
The rules, US and UK side by side
Accounting
FRS 102 and FRS 105 have no requirements written specifically for cryptoassets, so the treatment is a judgement to confirm with your adviser. FRS 105 permits historical cost only. For IFRS reporters, the IFRS Interpretations Committee concluded in June 2019 that IAS 2 applies to cryptocurrencies held for sale in the ordinary course of business and IAS 38 otherwise.
Source: FRC: FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, FRC: FRS 105: The Financial Reporting Standard applicable to the Micro-entities Regime, IFRS Foundation: IFRS Interpretations Committee agenda decision: Holdings of Cryptocurrencies (June 2019).
Tax
For a company, profits and gains on exchange tokens such as bitcoin fall within Corporation Tax under different rules depending on its activities and accounting. A company holding tokens as an investment pays Corporation Tax on gains when it disposes of them. Values are converted to sterling at the time of each transaction using a consistent method, and the method is recorded.
Source: HMRC: CRYPTO41000: Corporation Tax, contents, HMRC: CRYPTO41200: Corporation Tax on chargeable gains, introduction, HMRC: CRYPTO40100: Conversion to sterling and accountancy.
Provider reporting
From 1 January 2026, UK cryptoasset service providers collect user and transaction data under the Cryptoasset Reporting Framework, with reports for 2026 due to HMRC by 31 May 2027. A UK company using a provider must give its legal name, main address and registration number.
Source: HMRC: Check if you need to report cryptoasset data to HMRC (Cryptoasset Reporting Framework), HMRC: Information you need to give to UK cryptoasset service providers.
For the separate UK cryptoasset regime from 25 October 2027 and what it means for a company that only holds its own bitcoin, see UK crypto regime from October 2027.
Accounting
FASB ASU 2023-08 is part of US GAAP. Crypto assets in its scope are measured at fair value, with changes included in net income. It is effective for fiscal years beginning after December 15, 2024, and earlier adoption was permitted.
Source: FASB: ASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60).
Tax
IRS Notice 2014-21 treats virtual currency as property for federal tax purposes, so a sale or exchange can produce a taxable gain or loss. Basis is generally the cost in US dollars.
Source: IRS: Notice 2014-21: virtual currency is treated as property for federal tax purposes, IRS: Frequently asked questions on virtual currency transactions.
Provider reporting
Brokers report gross proceeds on Form 1099-DA for sales on or after January 1, 2025, and from 2026 basis for covered securities. Corporations other than S corporations are generally exempt recipients, so a C corporation may not receive one. The company still reports its own gains and losses.
Source: IRS: About Form 1099-DA, Digital Asset Proceeds From Broker Transactions, IRS: Instructions for Form 1099-DA (2026): covered securities, basis reporting and exempt recipients.
Longer explainers: US company bitcoin accounting under ASU 2023-08 and UK company bitcoin accounting under FRS 102 and FRS 105, with more detail in UK company bitcoin accounting under FRS 102.
Recording each transaction
A practical list of what a record usually includes. It is a starting point for discussion with your accountant, not a statement of what the law requires.
- Date and time (with time zone) of each transaction
- Amount in bitcoin and in the reporting currency, with the rate and its source
- The transaction ID, so anyone can look it up on the public ledger
- Which wallet or account it came from or went to, and its purpose
- Who prepared and who approved it, matching the policy
In the UK, HMRC expects values to be converted to sterling using a consistent method that is recorded.
Source: HMRC: CRYPTO40100: Conversion to sterling and accountancy.
Year end evidence
- The balance of each wallet at the year end date, which anyone with the descriptor or address list can check on the public ledger
- Custodian, exchange or broker statements for any holding with a provider
- A reconciliation between the ledger balance and the accounting records
- The key register with its last recovery test date, and board minutes for approvals
Bitcoin balances are public on the ledger, so a wallet's descriptor lets an auditor see its balance and history without any ability to move funds.
Source: Bitcoin BIPs: BIP 380: Output script descriptors, general operation (wallet backups and exports), Bitcoin developer documentation: Transactions guide: public keys, private keys and signatures.
Wallet exports
- A transaction history export (usually CSV) from the coordinating wallet software or provider
- A watch-only wallet built from the descriptor, which shows balances and history without being able to move funds
- Each transaction ID linked to the matching accounting entry
Exchange-traded products
The notes above are for bitcoin held directly. They do not apply in the same way to a share in a spot bitcoin exchange-traded product in the US or a crypto exchange-traded note in the UK. See exchange-traded products in the custody guide.
Source: SEC: Investor Bulletin: exchange-traded products providing exposure to bitcoin and ether (September 2024), HMRC: Tax treatment of cryptoasset Exchange Traded Notes.
Sources
Primary sources only. Each link was checked on 29 October 2026. Rules change, so confirm the current version with your adviser.
- FASBASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60)
- IRSNotice 2014-21: virtual currency is treated as property for federal tax purposes
- IRSFrequently asked questions on virtual currency transactions
- IRSAbout Form 1099-DA, Digital Asset Proceeds From Broker Transactions
- IRSInstructions for Form 1099-DA (2026): covered securities, basis reporting and exempt recipients
- FRCFRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland
- FRCFRS 105: The Financial Reporting Standard applicable to the Micro-entities Regime
- IFRS FoundationIFRS Interpretations Committee agenda decision: Holdings of Cryptocurrencies (June 2019)
- HMRCCRYPTO41000: Corporation Tax, contents
- HMRCCRYPTO41200: Corporation Tax on chargeable gains, introduction
- HMRCCRYPTO40100: Conversion to sterling and accountancy
- HMRCCheck if you need to report cryptoasset data to HMRC (Cryptoasset Reporting Framework)
- HMRCInformation you need to give to UK cryptoasset service providers
- Bitcoin BIPsBIP 380: Output script descriptors, general operation (wallet backups and exports)
- Bitcoin developer documentationTransactions guide: public keys, private keys and signatures
- SECInvestor Bulletin: exchange-traded products providing exposure to bitcoin and ether (September 2024)
- HMRCTax treatment of cryptoasset Exchange Traded Notes
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This is general information and education only. It is not financial, investment, tax, accounting, legal or regulatory advice, and it is not a recommendation to buy, sell or hold bitcoin or any other asset. It does not take account of your circumstances or those of your company. You must obtain your own official professional advice to confirm this information is correct before acting on it.
Rules change. This information is correct to our understanding at the last-reviewed date, but it may be incomplete or out of date, and official sources take precedence. Bitcoin is volatile. A company that buys it could lose some or all of the money it puts in.
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