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Author Topic: How to account for on-chain vs off-chain expenses and withdrawals (ERC20/ETH)  (Read 19 times)
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February 03, 2018, 06:05:57 AM

I am looking for some guidance on how to handle corporate accounting for funds raised from a token sale as they relate to on-chain value and off-chain expenses. For example:

Lets say for simplicity that funds from the sale of the token amounted to 2 ETH.

At any given moment during the accounting period, the value of ETH-to-USD can fluctuate, so what is the best strategy for determining how much capital was actually raised? Should the value be recorded at the sale price from ETH-to-USD? Does the price on the books account for brokerage fees to process the withdrawal? Is it appropriate to record the off-chain assets as the net-gain after any trading to convert ETH-to-USD has taken place?

Additionally, for promotions and giveaways, the gas-cost used for the transactions will come from a pool of the same raised funds, but these will be spent on-chain (creating another discrepancy or difference in ETH raised during the token sale compared with net-return to off-chain assets). How does one calculate and log the virtual expenses at the time of transaction versus the current "market rate" for an on-chain action such as creating a smart contract?

Should there effectively be an "On-Chain" ledger of expenses in ETH, and an entirely separate and standard "Off-Chain" ledger for typical business operation costs and charitable donations?

This is uncharted territory for me, and Google did not have the answers (which is a new one for me). Any advice or guidance is greatly appreciated.
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