Xero and QuickBooks: recording bitcoin

Last checked 1 November 2026. Menu names come from Xero and QuickBooks Online help pages on the date shown and can change. Account types and the accounting entries are illustrations of how the standards are commonly applied. Your accountant decides the policy, the accounts and the amounts. If anything here conflicts with the linked source, the source wins.

Xero and QuickBooks Online do not track bitcoin as a currency. They record values in pounds or dollars. The practical approach is to keep a separate bitcoin record, the transaction log in our bookkeeping examples, and post journals to the ledger in your base currency. This page shows which accounts to set up, the journals for common events under UK and US rules, and where each step lives in the two apps.

Accounts to set up

The names below are suggestions. The account type is a judgement for your accountant. In Xero, coding to a Fixed Asset account type adds a draft entry to the fixed asset register, so many bookkeepers use a different asset type for bitcoin.

Source: Xero Central: Components of an account in your chart of accounts (account types), QuickBooks Help: Add an account to your chart of accounts in QuickBooks Online.

UK: the cost model (FRS 105, or FRS 102 cost model)

Our UK accounting guide explains the standards. FRS 105 allows cost only. Under the FRS 102 cost model, an intangible asset is held at cost less accumulated amortisation and impairment. FRS 102 treats every intangible asset as having a finite useful life, and residual value and useful life are judgements, so amortisation is shown below as a step without an amount.

Illustrative figures. A company buys bitcoin for £20,000 plus a £100 exchange fee. At the year end the bitcoin is worth £15,000. Later it sells for £18,000 less a £90 fee. They are not a forecast and not any provider's terms.

UK: the FRS 102 revaluation model

The revaluation model is only available if fair value can be measured by reference to an active market, which is a judgement. Increases go to other comprehensive income and a revaluation reserve. A decrease goes first against earlier gains for that asset, and any excess goes to profit or loss.

Illustrative figures. Bought for £20,100 as above. Revalued to £24,000, then to £19,000 at the next reporting date. Amortisation is left out to keep the example simple. They are not a forecast and not any provider's terms.

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.

UK tax is calculated separately

For a company that simply holds bitcoin, HMRC's guidance points to the chargeable gains rules, not the accounting entries, and HMRC says tokens simply held do not meet the test for the intangible fixed asset rules. Impairments and revaluations in the accounts are not the tax figures. On the sale in the cost model example, the tax calculation starts from proceeds of £17,910 less allowable costs from the pool of £20,100, before any other adjustments, even though the accounts show a gain. Keep the pool calculation alongside the ledger and ask your accountant to confirm it.

Source: HMRC: CRYPTO41150: Corporation Tax, intangible fixed assets, HMRC: CRYPTO41200: Corporation Tax on chargeable gains, introduction, HMRC: CRYPTO41350: Corporation Tax on chargeable gains, pooling and the same day and ten day rules, HMRC: CRYPTO40100: Conversion to sterling and accountancy.

US: fair value under ASU 2023-08

Under ASU 2023-08, bitcoin within its scope is measured at fair value each reporting period, with changes in net income. Our US accounting guide covers scope and disclosures. Whether a purchase fee is added to cost is a policy question for your accountant.

Illustrative figures. A company buys bitcoin for $25,000 plus a $125 fee. At the quarter end its fair value is $27,000. Later it sells for $26,000 less a $130 fee. They are not a forecast and not any provider's terms.

Source: FASB: ASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60).

US tax is calculated separately

For federal tax, bitcoin is property, and gain is generally the amount realised less basis. In this example, $25,870 less $25,125 gives $745, the same total as the book entries over the life of the holding, but in different periods. Unrealised fair value gains are not taxed when booked. Track basis by wallet or account, as Revenue Procedure 2024-28 describes, and keep lot records outside the ledger.

Source: IRS: Frequently asked questions on virtual currency transactions, IRS: Revenue Procedure 2024-28: allocating unused basis to wallets and accounts (PDF).

Doing it in Xero

1. Add the accounts: Accounting menu, Chart of accounts, Add account, then choose the account type, code and name.
2. Post a journal: Accounting menu, Manual journals, New manual journal entry. Enter a narration, which Xero requires, then the debit and credit lines.
3. Save as draft for review, then Post. Only users with the right role, such as an administrator, or a standard user who also has the manual journals permission, can post.
4. Manual journals are in your base currency. Use the sterling or dollar value from your bitcoin log.
5. For many entries, Xero lets you import manual journals from a CSV file, with debits as positive amounts and credits as negative.

Source: Xero Central: Components of an account in your chart of accounts (account types), Xero Central: Add, import and post manual journals.

Doing it in QuickBooks Online

1. Add the accounts: Chart of accounts, New, then choose the account type and detail type and enter a name. Leave any opening balance empty if you will record the purchase as a journal.
2. Post a journal: + New (or + Create), Journal entry. Choose the accounts, enter debits and credits, which must balance, and add a memo.
3. Save, then check the entry in the Journal report.

Source: QuickBooks Help: Add an account to your chart of accounts in QuickBooks Online, QuickBooks Help: Create journal entries in QuickBooks Online.

Month end routine

1. Reconcile the bitcoin log to the wallet or custodian balance, in units.
2. Reconcile the exchange clearing account to the exchange statement.
3. Post any period end adjustment using the price source in your policy, at the time it names.
4. File the evidence: statements, the price used, and the approval for each journal. See audit evidence.

Our judgement, not a rule: a short written note from your accountant, covering the accounts, the fee treatment and the price source, saves more time at year end than any software setting.

Read next

• Bookkeeping examples: the transaction log and pools.
• Audit evidence: what an auditor will ask for.
• Company tax on bitcoin: UK and US company tax.

Sources

Primary sources only. Each link was checked on 1 November 2026. Rules change, so confirm the current version with your adviser.

1. Xero CentralComponents of an account in your chart of accounts (account types)
2. QuickBooks HelpAdd an account to your chart of accounts in QuickBooks Online
3. FRCFRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland
4. FRCFRS 105: The Financial Reporting Standard applicable to the Micro-entities Regime
5. HMRCCRYPTO41150: Corporation Tax, intangible fixed assets
6. HMRCCRYPTO41200: Corporation Tax on chargeable gains, introduction
7. HMRCCRYPTO41350: Corporation Tax on chargeable gains, pooling and the same day and ten day rules
8. HMRCCRYPTO40100: Conversion to sterling and accountancy
9. FASBASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60)
10. IRSFrequently asked questions on virtual currency transactions
11. IRSRevenue Procedure 2024-28: allocating unused basis to wallets and accounts (PDF)
12. Xero CentralAdd, import and post manual journals
13. QuickBooks HelpCreate journal entries in QuickBooks Online