First-in-first-out (FIFO) inventory reporting is based on the principle that you have an inventory of a product, and each item of your inventory has an associated price (how much that item cost you). When you sell an inventory item, you use the earliest unsold inventory item to calculate the increase or decrease in value.
CryptFolio provides a FIFO report to help you complete end-of-year tax returns for countries and situations where you are treating cryptocurrency as inventory. The FIFO report for a particular currency can be accessed through your Inventory reports, and is broken up into three sections.
CryptFolio currently supports the following transaction types:
- Purchase: The initial purchase of a currency, which can be through exchange or mining, and is considered an inventory purchase.
- Mining: The initial acquisition of currency through mining, and is considered an inventory purchase.
- Airdrop: Currency obtained through airdrops or currency forks, such as Bitcoin Cash and Bitcoin Gold, and is considered an inventory purchase.
- Sale: The sale of a cryptocurrency, which can be through exchange of a cryptocurrency (for another cryptocurrency or fiat currency) or purchasing a good or service, and is considered an inventory sale. This is considered a taxable event.
When CryptFolio needs to convert one currency value to another on a given date – for example, when calculating your historical values, or your inventory reports – there are many different techniques that the rate can be calculated or selected.
If a transaction has a valuation defined manually, then that value in that valuation currency will be used (and converted through a composite rate if necessary). Otherwise, the value is calculated using a composite rate, as defined below.
What pairs are used?
By default, we use the following priority, to calculate a composite rate for any two given
The Inventory report displays a list of all of the transactions used in your other inventory reports (such as FIFO) in chronological order. This is so you can review your historical transactions and their values, and check that everything has been calculated appropriately.
Currently CryptFolio only supports a single inventory method (FIFO), but in the future we will support other inventory calculation methods. From the Inventory report you can access your Balances report or the FIFO report for your portfolio.
Accessing your Inventory report
You access your inventory report through your balances report.
1. Visit the portfolio that you wish
For each of your portfolios, CryptFolio provides you with a balance and inventory view of all of your currencies.
For each of the reporting currencies and non-zero currencies in your portfolio, CryptFolio calculates two values for the currency: your balance, and your inventory.
Accessing your balances
Visit the portfolio that you wish to view the balances for, and click on the Balances link in the top right of your portfolio.
The balance for a currency is the sum of all of the balances in each of your portfolio accounts.
For example, if you had two accounts with the following