Overstock.com just turned heads with the news that it will start accepting Bitcoin next year. The first major online retailer to take this step, Overstock’s decision is huge for Bitcoin as other retailers are expected to follow suit. (Not to mention it is a most welcome and timely change of conversation after the pounding the currency took at the hands of the Chinese last week).
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So retailers are now on alert–Bitcoin is probably in their future, either because consumers will start demanding to pay in the currency or because it is cost effective, as Overstook CEO Patrick Byrne says, according to Coindesk.
Byrne cited cost as a key driver for the bitcoin move. “You’re getting rid of the interchange fees. We’re paying credit card companies around 2%. For a company whose margin is 1%, picking up 2% on that is quite attractive.
Byrne is hardly the only one to have noticed this. Small businesses are intrigued by Bitcoin as a credit-card processing fee killer, the Wall Street Journal reported earlier this year, and many are adopting it and even, in the case of a San Francisco grocery store, offering a discount to shoppers that use it.
Overstock’s news is big for another group as well: accountants and CPAs who have been watching Bitcoin’s momentum and wondering what impact it will have on their profession.
Now they–and we–are going to find out because while Overstock.com might be an outlier among retailers it is also a public traded company and that means it must duly disclosure to shareholders information about sales and risk and hedging and currency conversion via its quarterly financial reports.
How exactly that will happen, though, is still unclear. Right now the accounting profession is still feeling out which standards apply to Bitcoin, if any.
The Financial Accounting Standard Board was asked about that recently during its Small Business Advisory Committee, according to Bloomberg BNA. (Answer: there are no generally accepted accounting principles that addresses financial reporting for Bitcoins, which means they fall under other comprehensive basis of accounting).
This is an issue that the American Institute of CPAs is watching as well. As the AICPA president Barry Melancon noted in a recent blog post it is still unclear how a CPA would value a Bitcoin, and whether it is even an asset. He writes:
Ultimately, consumers will decide whether Bitcoin gets accepted in the marketplace. However, the government’s interest, coupled with growing momentum among businesses and investors, does pose a question to the accounting profession. Is Bitcoin a new, acceptable form of money? More importantly, are we ready if it is?
These are serious questions and it is a bit perturbing that even though entities like FASB and AICPA can’t really answer them, other than to speculate, Bitcoin is steadily moving into the mainstream. More perturbing than the swan dive in value the currency took this week.
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