From 1 April 2017, the Japanese Government will recognize Bitcoin as a legal payment system, it’s written into law. The Bill also imposes regulation over the Bitcoin Exchanges in Japan. These changes will ensure tighter oversight from the Financial Services Agency of Japan over the digital economy. Regulation full steam ahead.
Japan is leading the way with the introduction of the new Virtual Currency Act which is explained here – The Virtual Currency Act
However, it seems that virtual money poses an accounting dilemma for Japan’s early adopters – is it an asset or expense?
“The current Japanese accounting standards do not address digital currencies so there is no guidance on how to report them properly for tax purposes.
Therefore, many people and companies simply leave their digital currency holdings off their books. Those who report them often mark their bitcoin holdings as “inventory” on their balance sheets. Issuers usually report them as a “liability”. However, the lack of standards means, “there is a risk that companies that hold virtual currency could turn out to have distorted valuations or that huge losses surface suddenly”, said Chikako Suzuki, a partner at Pricewaterhousecoopers Aarata. Nikkei Asian Review wrote: The Accounting Standards Board of Japan decided Tuesday to begin consideration, expected to take six months, of a framework for treatment of virtual currency.” Read the full article here
Learn more about Bitcoin Adoption in Japan
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