How Can NFTs Be Used In Businesses and How They Should Account for NFTs

The crypto-currency world has been growing fast since Bitcoin exploded in popularity, but now there is a new hot topic – non-fungible tokens or NFTs. NFTs are files that are either stored, or a link to them is, on the blockchain and people are buying them for tens, hundreds and even thousands of dollars. So how may a company record NFTs on their balance sheets and how will the taxation of these products work? Using questionnaires and surveys from the general crypto community and CPAs, as well as research papers, the IFRS standards and the CRA tax code, this paper will show how companies should account for NFTs. The research shows that NFTs should be classified as either inventory for creators and taxed as if they were regular products being sold. Furthermore, for companies that are buying them for investments, NFTs should be intangible assets with indefinite life and fall under capital gains for their taxation.