A Practice Guide for Practitioners What are the proper questions and approaches that enable valuation professionals to value non-fungible tokens (NFTs)? The author describes the questions and methods used to value NFTs. With the recent IRS proposal, the focus on fair market value is repeated as the preferred method for cryptocurrency transactions that do not involve cash.[1] The IRS redefines fair market value to simply market value for cryptocurrencies traded on an exchange; this limits the applicability to less than 10% of cryptocurrencies and highlights the need for practitioners to understand how to apply fair market value calculations to cryptocurrency.…
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Understanding the Fundamentals of the Industry The purpose of this article is to give other experts facing the challenge of completing a valuation of a Bitcoin mining facility some of the fundamental characteristics needed to understand the operations and assign value. A few months back I received a call from a potential client looking for a valuation of bitcoin mining company for purposes of a prenuptial agreement. I excitedly said “yes” I would love the engagement, very candidly telling the client that I had not valued one in the past but that I was part of an amazing organization, the…
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A Guide for Forensic Analysts As cryptocurrencies become more mainstream, it is vital for forensic analysts to understand and analyze digital currency data. Forensic analysts are increasingly being brought in to trace and help recover crypto assets in criminal matters, such as money laundering and other fraud prosecutions. There is also a noticeable increase in the use of forensic analysts in civil litigations, which can range from contested divorces to probate and bankruptcy cases. This article focuses on how to trace and recover crypto assets using one of the major exchanges as the example. Coinbase is an online cryptocurrency exchange…
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Tax ramifications, smart contracts, and job security are among the issues top of mind for accountants. Given blockchain’s rapid rise into the accounting consciousness, it is no surprise CPAs have many questions about the technology. This article addresses five of the most pressing concerns I encounter regarding blockchain, smart contracts, and cryptocurrencies such as bitcoin. To read the full article in the Journal of Accountancy, click: CPAs’ Top Five Questions About Blockchain, Cryptocurrencies.
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Your Next Engagement Currency has played a central role in most business valuation and financial forensic engagements since the origination of the two terms. What has not been so clear lately is the changing nature of currency and for that matter, the very definition of money itself. This article explores how digital currencies originated, their attributes, and how they should be considered for your next valuation or forensic engagement.