The chief accountant of the U.S. securities and exchange Commission (The United States Securities and Exchange Commission, SEC) has warned companies participating in primary offerings of coins (ICO), to remember their obligations under financial reporting, writes Coindesk.
“The initiatives on primary floatation of coins should consider mandatory instruction in accounting, disclosure and reporting, based on the nature of their participation,” said Wesley Bricker, who worked as the chief accountant of the regulatory body since last year.
In addition, he has advised investors and owners of the tokens before placing or buying ask the following:
– Do you use specialized accounting manual (e.g., investment companies) to the presentation of financial statements holder?
– What are the characteristics of a coin or token in the consideration of the question of how, and at what price the transaction should affect the financial statements of the holder?
– What is the nature of participation of the holder in consideration of whether the activities of the Issuer to be reduced or accounted for using the equity method?
Bricker warned that it is only “illustrative questions,” and that in accordance with the previous statement SEC by the specificity of the ICO will determine which reporting requirements must be met.
Recall that the July statement of the SEC on this matter was discussed that the Federal securities laws may apply to some ICO. While issuers should consider a number of norms of the financial statements. In particular:
– Are there any obligations requiring recognition or disclosure?
– Are there implications for the provision of income tax?
– Are there any previously recognised asset, requiring the cancellation of recognition?
– Are there any income or expense that require recognition or deferral?
– Is there a deal with the owners, which leads to the classification of debt or equity and may, to the reimbursement of expenses?
– What are the requirements for filing financial statements?