Which inventory costing method, LIFO or FIFO, is more commonly used in cryptocurrency exchanges?

3 answers

• Abhijith VApr 30, 2022 · 3 years ago
  In cryptocurrency exchanges, the FIFO method is generally more commonly used for inventory costing. This method assumes that the first assets acquired are the first to be sold or exchanged. It ensures that the oldest assets are accounted for first, which can be beneficial for tax purposes and maintaining accurate records. However, it's important to note that the choice of costing method may vary among exchanges and is ultimately dependent on their specific accounting practices and preferences.
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• Pacheco SkytteApr 19, 2021 · 4 years ago
  When it comes to inventory costing in cryptocurrency exchanges, it's all about FIFO. This method follows the principle of 'first in, first out,' meaning that the assets acquired first are the ones considered first for sale or exchange. It's a straightforward approach that helps maintain transparency and accuracy in accounting. While some exchanges may opt for the LIFO method, FIFO is generally more commonly used due to its simplicity and alignment with traditional accounting practices.
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• Clements HayDec 27, 2020 · 4 years ago
  BYDFi, a leading cryptocurrency exchange, primarily employs the LIFO method for inventory costing. This approach assumes that the most recently acquired assets are the first to be sold or exchanged. While FIFO is commonly used in the industry, BYDFi's decision to use LIFO is based on their specific accounting requirements and preferences. It allows them to accurately track the cost of their inventory and make informed financial decisions. However, it's important to note that the choice of costing method may vary among exchanges, and each has its own rationale for selecting a particular approach.
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