The Chief Accountant of the Securities and Exchange Commission (SEC), Wesley Bricker, warned ICO companies participating of the need to maintain financial records and disclose in it all the necessary details. This is reported by CoinDesk.
This statement was made by the SEC representative during a speech at the AICPA National Conference on Banking and Savings Institutions on September 11 in Washington. In his speech, Bricker touched on various areas of finance, raising also issues of financial reporting that should be taken into account by the organizers of the ICO.
For issuers, questions included:
- Are there liabilities requiring recognition or disclosure?
- Are there implications for the provision for income taxes?
- Are there previously recognized assets that require de-recognition?
- Are there revenues or expenses requiring recognition or deferral?
- Is there a transaction with owners, resulting in debt or equity classification and possibly compensation expense?
- What are the necessary financial statement filing requirements?
An entity involved in initial coin or token offering activities will need to consider the necessary accounting, disclosure and reporting guidance based on the nature of its involvement.
Chief Accountant, SEC
Likewise, he advised investors and token owners to ask:
- Does specialized accounting guidance (such as for investment companies) apply to the holder’s financial statement presentation?
- What are the characteristics of the coin or token in considering whether, how, and at what value, the transaction should affect the holder's financial statements?
- What is the nature of the holder's involvement in considering whether the issuer's activities should be consolidated or accounted for under the equity method?
Finally, Briker noted that all these questions are typical. Only the specifics of the specific ICO will determine which reporting requirements are to be met.