The Financial Accounting Standards Board (FASB) has not issued any specific guidance on the proper accounting and reporting of bitcoins. Thus, there is considerable debate and variation in practice. Some companies consider bitcoins as equivalent to cash, while others consider bitcoins as an investment, a prepaid asset, or an intangible asset. Overstock.com (OSTK) accounts for bitcoins as a prepaid asset and includes its bitcoin holdings as a current asset on its balance sheet.
Overstock.com values its bitcoin holdings using lower of cost or market. Decreases in the value of the bitcoin holdings are reported as a loss on the income statement. Increases in the value are reported as a gain, but only to the extent of the prior write-downs (decreases).
As the use of bitcoins and other cryptocurrencies grow, the FASB will face increasing pressure to issue guidance in this area.