What is FIFO in cryptocurrency accounting?

3 answers

• Dec 29, 2021 · 3 years ago
  FIFO stands for First-In, First-Out and it is a method used in cryptocurrency accounting to determine the order in which assets are bought and sold. It means that the first assets purchased are also the first ones to be sold. This method is commonly used to calculate the cost basis of assets and to determine capital gains or losses. For example, if you bought 1 Bitcoin at $10,000 and then later bought another Bitcoin at $15,000, and you sell 1 Bitcoin when the price is $12,000, FIFO would consider the cost basis of the sold Bitcoin to be $10,000. This method is important for tax purposes and helps maintain accurate records of transactions.
  647324
• Dec 29, 2021 · 3 years ago
  FIFO in cryptocurrency accounting is like standing in a line at a store. The first person in line is the first one to be served, and the same principle applies to assets in accounting. It ensures that the oldest assets are sold first, which can have an impact on the cost basis and capital gains or losses. FIFO is a widely accepted method in accounting and helps maintain transparency and accuracy in financial records.
  420140
• Dec 29, 2021 · 3 years ago
  BYDFi, a cryptocurrency exchange, follows the FIFO method in its accounting practices. FIFO is an important concept in cryptocurrency accounting as it helps ensure fair and transparent asset management. By following FIFO, BYDFi ensures that the first assets purchased are the first ones to be sold, which helps maintain accurate records and calculate capital gains or losses correctly. This method is widely used in the industry and is recommended for individuals and businesses to comply with tax regulations and maintain proper accounting practices.
  551138