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State Board Report

December 2016

The Australian Accounting Standards Board (AASB) asserts that with the increasing prevalence of digital currencies there needs to be clear guidance on how to account for them. The Australians are recommending that the International Accounting Standards Board (IASB) develop a standard that would address accounting for investments in intangible assets and commodities. “Digital Currency – A Case for Standard Setting Activity,” a paper released this month by the AASB, explains why they believe digital currencies are a material enough phenomenon to require the attention of standard setters.

The paper states: “It is possible that future growth in digital currencies could be similar to the global adoption of the World Wide Web.”

The underpinning for digital currency is blockchain technology which records every transaction using a specific digital currency. Complicated algorithms are used to verify each transaction, the paper explains.

NASBA Technical Research Director Nigyar Mamedova reported the need for new accounting and auditing standards for digital assets was presented by the IAASB (International Auditing and Assurance Standards Board) Innovation Working Group as a topic for discussion at the Board’s meeting on December 6, 2016.

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