Bitcoin journal entries under US GAAP follow a short cycle: record the purchase at cost, remeasure the holding to fair value at each reporting date, and derecognise units when they are sold or spent. Under the FASB standard on digital assets (ASU 2023-08), every remeasurement goes through net income. The examples below walk through each step, then show how the same facts look under the IFRS cost model.
All figures are illustrative round numbers, chosen to make the mechanics clear. They do not reflect any actual price. Account names vary between charts of accounts, and the policies shown should be agreed with your auditor. Companies should take their own accounting, tax and legal advice.
The scenario
A company reporting under US GAAP, with ASU 2023-08 adopted, makes one purchase and later sells part of the holding.
- Day 1. Buys 10 BTC at 50,000 each, plus a 1,000 commission. Its policy is to include acquisition commissions in cost.
- Quarter 1 end. Bitcoin's fair value in its principal market is 55,000.
- Quarter 2. Sells 2 BTC at 52,000 each, paying a 200 selling commission.
- Quarter 2 end. Fair value is 48,000.
Bitcoin journal entries under US GAAP
1. Purchase
The asset is recorded at cost, including the capitalised commission.
| Account | Debit | Credit |
|---|---|---|
| Digital assets (Bitcoin) | 501,000 | |
| Cash | 501,000 |
2. Quarter 1 remeasurement
Fair value is 10 x 55,000 = 550,000. The carrying amount is 501,000, so the gain is 49,000. Note that the capitalised commission is absorbed here: it reduces the first remeasurement gain.
| Account | Debit | Credit |
|---|---|---|
| Digital assets (Bitcoin) | 49,000 | |
| Gain on remeasurement of digital assets | 49,000 |
3. Sale of 2 BTC
Proceeds are 2 x 52,000 = 104,000, less the 200 commission, so 103,800 cash is received. The carrying amount of the units sold is 2 x 55,000 = 110,000, their value at the last remeasurement.
| Account | Debit | Credit |
|---|---|---|
| Cash | 103,800 | |
| Loss on digital assets | 6,200 | |
| Digital assets (Bitcoin) | 110,000 |
Some companies first remeasure the units to fair value at the moment of sale, then derecognise them. The total effect on net income is the same. Choose one approach and apply it consistently.
4. Quarter 2 remeasurement
Eight BTC remain. Fair value is 8 x 48,000 = 384,000. The carrying amount is 550,000 less 110,000 = 440,000, so the loss is 56,000.
| Account | Debit | Credit |
|---|---|---|
| Loss on remeasurement of digital assets | 56,000 | |
| Digital assets (Bitcoin) | 56,000 |
Checking the result
The roll-forward ties: additions 501,000, plus gains 49,000, less disposals 110,000, less losses 56,000, gives a closing balance of 384,000. Net income over the two quarters is 49,000 less 6,200 less 56,000, a loss of 13,200. That equals the economic result: 501,000 spent, against 103,800 of cash received and 384,000 of Bitcoin still held.
What gets disclosed: cost basis, not carrying amount
The ledger tracks carrying amount. The disclosures need cost basis.
ASU 2023-08 requires an annual disclosure of the difference between sale proceeds and cost basis on disposals. Here, the cost basis of the 2 BTC sold is 2/10 of 501,000, or 100,200. Against a sale price of 104,000, the disclosed difference is 3,800, even though the ledger shows a 6,200 loss on the sale itself.
Both figures are correct. They answer different questions. This is why a lot register must run alongside the general ledger. See cost basis methods for corporate Bitcoin holdings and Bitcoin disclosure requirements.
CFO tip: map every Bitcoin general ledger account to a line in the annual roll-forward before you post the first entry. If an entry does not fit a roll-forward line, the chart of accounts needs fixing.
Network fees and deferred tax
Network fee on a transfer
Separately, suppose the company later moves its Bitcoin from a trading account into cold storage and pays a network fee of 0.0005 BTC. At the time, Bitcoin trades at 50,000, so the fee is worth 25. Its carrying amount, from the last remeasurement at 48,000, is 24.
| Account | Debit | Credit |
|---|---|---|
| Network fee expense | 25 | |
| Digital assets (Bitcoin) | 24 | |
| Gain on digital assets | 1 |
The fee is a small disposal of Bitcoin used to pay an expense. Many companies apply a materiality threshold and a simplified method for small fees. See accounting for Bitcoin trading and network costs.
Deferred tax at quarter 1
Assume the jurisdiction taxes Bitcoin only on sale, and that the tax base equals cost of 501,000. The 49,000 unrealised gain creates a taxable temporary difference. At an assumed rate of 25%, used purely for illustration and not representing any jurisdiction, the deferred tax liability is 12,250.
| Account | Debit | Credit |
|---|---|---|
| Deferred tax expense | 12,250 | |
| Deferred tax liability | 12,250 |
At quarter 2 end, the carrying amount of 384,000 is below the tax base of the remaining units, 400,800. The liability reverses, and a deferred tax asset of 4,200 may be recognised, subject to a recoverability assessment. Interim tax is usually calculated through an estimated annual effective rate, so actual quarterly entries may differ. See deferred tax on corporate Bitcoin holdings.
The same facts under the IFRS cost model
Under IAS 38's cost model, there is no entry at quarter 1, because gains above cost are not recognised. The sale and quarter-end look like this.
| Event | Account | Debit | Credit |
|---|---|---|---|
| Sale of 2 BTC | Cash | 103,800 | |
| Intangible assets (Bitcoin) | 100,200 | ||
| Gain on disposal | 3,600 | ||
| Quarter 2 impairment | Impairment loss | 16,800 | |
| Intangible assets (Bitcoin) | 16,800 |
The impairment compares the remaining carrying amount of 400,800 with a recoverable amount of 384,000. Costs of disposal are ignored here for simplicity. The cumulative result is again a loss of 13,200. The total is the same; the timing and labels differ. See Bitcoin under IFRS vs US GAAP.
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