This article is relevant if you use cryptocurrencies and NetSuite.

Background

Since 2013, my firm has offered Bitcoin and Cryptocurrency leadership for those using the new digital token/currency and seeking integration with the NetSuite general ledger.    Consider my previous articles on the topic:

• 2013: Early Look at Bitcoin Integration within Financial System
• 2013: Bitcoin Based Startups Leverage NetSuite Accounting
• 2013: How To: Journal Entry a Bitcoin Trade for USD using NetSuite
• 2013: Capture Bitcoin Exchange Rates in NetSuite
• 2013: Step by Step: Accounting for Bitcoin as Foreign Currency
• 2015: CIO Review Article: Bitcoin and Digital Currency Impacts on Core ERP & Business Systems
• 2017: Contrasting Bitcoin as an Asset versus a Foreign Currency in the NetSuite Accounting System
• 2020: Determine Bitcoin Crypto Gain / Losses Using NetSuite Tranche Applicator
• 2021: NetSuite Crypto Tranche Accounting Manager
• 2022: Automatically Update NetSuite for Any CryptoCurrency Price
• 2022: Considerations for Activating NetSuite Foreign Currency

We have seen a number of customers attempt to implement crypto into the NetSuite general ledger without carefully modeling the fundamentals well.  The worst-case scenario is when firms try to treat cryptocurrency as inventory.  The standards for treatment are evolving.  The method by which we guide managers and offer powerful related tools has given our clients many options.

2023 Crypto Accounting Treatment

The accounting treatment for virtual currency and crypto tokens continues to evolve.  The US-Based Financial Accounting Standards Board (FASB) is working on the proposed treatment.  The proposals, in my assessment, all appear reasonable.  The good news is that there is a recognition that these relatively new technologies are getting the attention they deserve especially given the capacities they are unleashing.   I appreciate the KPMG Article, “FASB issues proposed ASU on crypto asset accounting“, which helps make more readable the more verbose FASB proposal.

Ultimately, with proposed fair market value treatments anticipated as opposed to current impairment testing (which demands write-down accounting), there will be changes in how gains (and losses) are recognized.  Our client sought to get control over its digital tokens in a manner that varied based on the wallet (group) purpose.  Meaning each wallet group had different immediate and long-term investment narratives.  Working with their auditor’s guidance, they then worked with our firm to shape the gathering of information, calculations and respective reporting.

New Historical Crypto Price Feed

The client already used our Crypto Price Service to get daily spot prices.  At the same time each night, we would capture the respective spot price (there are 1,000s of cryptos) and deem that snapshot the daily price.  The most granular the client wanted was daily.  We can shape this interval any way we need to.   With the coming changes and some new internal Accounting leadership, they sought to use a new feed to help produce consistent and conservative-based measurements with information look-backs. Known as OHLCV (Open, High, Low, Close, Volume) categorical information,  we sought to capture data that fit that pattern. Given that we created a plug-in technology anticipating that a growing list of price feeds would be desired, it was a snap to add another source of crypto pricing data to our tool. In this case, the client sought to use CoinMarketCaps’s OHLCV Historical v2. With this feed, we could then update our tracking tables back in time, giving us opportunities to shape our general ledger accounting and historical/go-forward reporting.

NetSuite Accounting and Technology Leadership

Our clients appreciate that we can firmly bridge the intersection of accounting principles and NetSuite technology-driven innovation. Our Firm’s philosophy holds that we must be able to listen and think fundamentally to our client’s ambitions and concerns. We must understand know how to specifically act with software technologies to expand our client’s capacities to drive new revenue and lower costs so they can enjoy more profit to drive their missions.  All the while, we must always act ethically to earn and hold our clients’ trust.

Our tools are simply an illustration of our ethics. We don’t ask our clients for a license fee to use any of the 60+ NetSuite algorithms we have created since 2008. Instead, the software artifacts are a grounded demonstration that we can be trusted to focus on our clients’ situations, shape their NetSuite configurations, and ultimately produce meaningful outcomes that enhance our clients’ real capabilities to tactically act within their organizational strategies.

If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you are ready to tackle your NetSuite-driven cryptocurrency challenges, let’s have a conversation.

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

More Posts - Website - Twitter - Facebook - LinkedIn - YouTube