| Summary: | A research report submitted
In partial fulfilment of the degree:
Master of Commerce in Accounting
University of the Witwatersrand
School of Accountancy
2015 === The Bitcoin is a form of decentralised virtual money, which exists solely electronically and transcends
international boundaries and regulations. Given its innovative characteristics and increasing popularity in the
economic and technological worlds, which are explored in this paper, the Bitcoin and other virtual
‗currencies‘ are expected to become mainstream, leading to a need for accounting treatment. Currently, there
is no guidance on how to account for transactions involving the Bitcoin. The aim of this paper is to
determine a conceptual approach to accounting for the Bitcoin, making use of the theories of neoliberalism
and stewardship. A qualitative analysis is applied where the relevant literature is analysed to identify key
characteristics of the Bitcoin. A similar exercise is carried out to identify the accounting policy themes. The
Bitcoin characteristics and the accounting policy themes form the row and column headings respectively in
the correspondence table. This correspondence table was provided to 40 respondents. Their responses were
analysed using the statistical program Stata and summary statistics and a visual representative map (known
as a correspondence plot) of the relationship between the Bitcoin characteristics and the accounting policy
themes were generated. After the initial analysis, 5 interviews were conducted with accounting experts to
provide insights into the interpretation of the visual map. In conclusion, a normatively recommended
accounting policy for the Bitcoin consists of recognition on control and fair value as the preferred
measurement base with emphasis on the business model and intention of the entity holding the Bitcoins.
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