Charity receiving donation in cryptocurrency

What is the accounting for charity receiving donation via cryptocurrency ?

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One of the charity i look after has received a request to accept  donation via crypto currecny ( its from a reputable donor who have donated to larger organisations before). what is the accounting treatment here :

Dr investment /financial instrument Cr Income for initial recongnition at market value . once currency is converted to cash - Dr Bank Cr Investment /financial instrument ,  any gain/losses at this point.  i cant any info on crypto from the charity commission. 

what other advise would you have dealing in crypto . 

Replies (4)

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By Paul Crowley
16th Apr 2021 15:28

If mine I would ignore the middle and look at bank account only

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By paul.benny
17th Apr 2021 16:56

Are you going to convert the crypto to real money on receipt or hold it as an investment?

If the former, could donor sell first and donate the cash instead - or at least sell with settlement direct to your account?

Thanks (0)
By stepurhan
19th Apr 2021 08:56

I wonder if they have personal tax considerations in making the donation this way.

If they sell their crypto, they crystallise a taxable gain. If they buy something with an ascertainable price with crypto, they crystallise a taxable gain based on that price. If they give crypto to a charity, no ascertainable price, so do they make a gain? Possibly based on market value at the time of the donation, but crypto can fluctuate so much that may not be easy to determine precisely.

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By WhichTyler
23rd Apr 2021 13:33

like any other volatile investment, I would sell it straightaway and account for the cash (to ask them to sell first and gift cash so they can benefit from gift aid). It seems to be outside the cgt relief on donation of assets to charity

If they say ' you are mad to sell, its going to the moon' just say its charity policy and hope he will be able to make further donations from his remaining investments

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