What is the journal entry when a customer pays in USDC?

On Tarnholme's policy under IFRS, the dollar receivable is first retranslated to the settlement date's rate, an exchange gain of £299.89. The USDC is then debited at that amount, £19,742.33, against the receivable, and revenue stays at the invoice-date amount. The other reading would use the token's own price and book a settlement gain or loss.

Do stablecoin swaps create gains or losses?

They can. Where both tokens are intangible assets, commercial substance decides whether the exchange is measured at fair value, with a gain or loss, or at the carrying amount given up. Tarnholme's USDC-for-DAI swap, at exactly one for one, produced a £462.50 loss, all of it the pound's rise against the dollar.

How should Ethereum gas be booked on a USDC transfer?

The ether spent is a disposal of ether, with its own gain or loss. On a plain transfer, or on the approval that comes before a swap, the fee is an expense, because nothing is acquired. On a swap or conversion Tarnholme capitalises the fee into the token acquired, a materiality choice rather than a rule.

Why does the worked example show a loss without a depeg?

Tarnholme reports in sterling, and the pound rose against the dollar during 2025. Under the IAS 38 cost model a dollar token is impaired when its recoverable amount in sterling falls below its sterling cost. So £1,256.61 of the stablecoin impairments is the pound alone, although every year-end dollar price was within a quarter of a cent of one dollar.

Stablecoin Journal Entries: A Full-Year IFRS Worked Example

These stablecoin journal entries follow Tarnholme, a fictional UK company with no tie to any issuer, through 2025 under IFRS. It books each token as a non-cash asset with its own cost, not as a dollar balance. The entries run from customer receipts and a swap to gas fees and the year-end impairment test.

Why are the company's stablecoins not cash?

Tarnholme Analytics Ltd is a fictional UK software company that reports under IFRS in pounds, for the 2025 calendar year. Its transactions are made up, but every price and exchange rate is real. A few overseas clients are invoiced in US dollars and pay in stablecoins.

The decisive assumption is that Tarnholme has no direct relationship with any issuer. It has no Circle Mint account, is not a verified Tether customer or Ethena Mint User, and is not established in the European Economic Area.

On its judgement, no issuer owes it a dollar for a token, so it can only sell them (who can redeem each token). That shapes every entry below:

Not a cash equivalent. Tarnholme concludes that a token it can only sell is not readily convertible to known amounts of cash.
Not a monetary item. IAS 21 asks for a right to a fixed or determinable number of units of currency, and the peg gives Tarnholme none.
An intangible asset at cost. Every token is an IAS 38 intangible under the cost model, with an indefinite life and no amortisation. Each lot is tested for impairment on 31 December.

Tarnholme also bought ether for £152.93 on 7 January to pay gas, the network fee on every Ethereum transaction. Every payment of ether is a disposal of ether, with its own gain or loss. Lots follow first in, first out, and amounts below are in pounds.

How do you book a customer paying in USDC?

On 6 January Tarnholme invoices a client USD 24,318.60. At the Bank of England rate of 1.2508 dollars per pound, it books revenue and a dollar receivable of £19,442.44. On 22 January the client pays 24,318.60 USDC:

Account	Debit	Credit
Trade receivables	299.89
Exchange gains on trade receivables		299.89
Intangible assets: USDC	19,742.33
Trade receivables		19,742.33

First, the receivable is a dollar amount, so it is retranslated to the settlement day's rate. The rate had moved to 1.2318 dollars per pound, a stronger dollar, so the receivable gained £299.89.

Then the USDC takes the receivable's amount. IAS 38 says "An intangible asset shall be measured initially at cost", and the receivable is what Tarnholme gave for it. Revenue does not change, because it was earned on the invoice date.

That is Tarnholme's judgement. The other reading would book the token at its own market price, with any difference as a settlement gain or loss. Here both give the same number, because USDC last traded at exactly 1.0000. The USDT and USDe receipts follow the same pattern, with an exchange loss of £205.65 and a gain of £39.03.

Why can a one-for-one swap create a loss?

On 11 April Tarnholme swaps 10,040.25 USDC for 10,040.25 DAI through the LitePSM, a Sky protocol contract that swaps the two one for one. First it approves the contract to take its USDC. That approval is a separate transaction that moves no token, and its £0.05 of ether is an expense.

Account	Debit	Credit
Intangible assets: DAI	7,688.47
Loss on derecognition of USDC	462.50
Loss on ETH used for network fees	0.13
Intangible assets: USDC		8,150.88
Intangible assets: ETH		0.22

Both tokens are intangible assets, so IAS 38 measures the DAI at fair value unless the exchange lacks commercial substance. Tarnholme judges that it has substance: USDC rests on an issuer's reserve, while DAI has no obligor and depends on a protocol. So the DAI costs the USDC's fair value, £7,688.38, plus £0.09 of ether spent on the swap.

The USDC leaves at its cost, £8,150.88, and the £462.50 difference is a loss. All of it is the pound's rise: a dollar cost £0.811820 in January and £0.765755 in April. Nothing happened to USDC's dollar price.

The 3 December conversion of 6,215.73 DAI into USDS shows the other side. Sky's converter swaps one for one with no fee, and Tarnholme judges that this exchange lacks commercial substance. The USDS takes the DAI's carrying amount, so there is no gain or loss.

For each exchange, the opposite judgement would give the same 2025 profit before tax to the penny, with the loss on a different line and date.

What happens when you pay or sell with stablecoins?

On 10 June Tarnholme pays a supplier's USD 6,482.75 invoice with 6,482.75 USDT. The dollar payable is first retranslated, a gain of £32.51, because sterling had risen since the invoice. Then the payable and the USDT leave together. On Tarnholme's judgement, they are measured at the payable's £4,796.71.

Account	Debit	Credit
Trade payables	4,796.71
Loss on derecognition of USDT	342.21
Intangible assets: USDT		5,138.92

The USDT cost £0.792707 per unit in February, but it settled a debt worth £0.739919 per dollar in June. Paying a dollar debt with a dollar token still produced a loss in pounds. The £0.41 of ether for the transfer is an expense.

On 18 November Tarnholme sends 6,040.284517 USDC to its Kraken account and sells it for pounds. It treats the transfer to Kraken as a move to a custodian, not a disposal. The sale is the disposal:

Account	Debit	Credit
Cash at bank (sterling)	4,583.25
Loss on disposal of USDC	320.37
Intangible assets: USDC		4,903.62

The gross proceeds are £4,592.43, less Kraken's 0.20 per cent fee of £9.18.

What do the year-end stablecoin journal entries show?

Tarnholme closes 2025 with 8,238.065483 USDC, 9,379.65 USDT, 3,824.52 DAI, 6,215.73 USDS, 4,212.30 USDe and about 0.0518 ETH. Each must match the balance the token's contract shows for its address, and a difference of one unit is a break. The ether ties only if all six fee payments are booked.

Each lot is then tested for impairment. Tarnholme measures recoverable amount as fair value less costs of disposal, which IAS 36 allows where value in use is not believed to exceed it materially.

Fair value is the units times the last trade before midnight in the principal market Tarnholme can access, at the closing rate. Costs of disposal are the venue's taker fee. Every lot is impaired, £1,394.65 in all:

Account	Debit	Credit
Impairment loss: USDC	578.70
Accumulated impairment: USDC		578.70

The other lots take the same entry: USDT £486.65, DAI £102.16, USDS £168.80, USDe £20.00 and ETH £38.34.

Almost all of it is the pound. Every year-end dollar price was within a quarter of a cent of one dollar.

But a dollar cost £0.811820 when the USDC arrived and only £0.743439 at the closing rate. Measured lot by lot, £1,256.61 of the £1,356.31 on the stablecoin lots is the pound alone. Under the cost model, a falling pound would have produced nothing above cost.

Note what is not booked. On 10 October, USDe traded at 0.65 USDT on Binance, a venue closed to Tarnholme. There is no entry, because Tarnholme reports annually and tests at the reporting date, not at the lowest trade in between. Our stablecoin valuation guide explains how each year-end price was chosen.

Where do stablecoins show up in the cash flow statement?

IAS 7 says "Cash flows are inflows and outflows of cash and cash equivalents". None of Tarnholme's tokens is a cash equivalent. So none of the stablecoin receipts, the USDT payment, the swap or the conversion is a cash flow.

Only two sterling legs appear, both as investing cash flows on Tarnholme's policy, as payments to acquire and receipts from sales of intangibles. They are the £152.93 paid for ether and the £4,583.25 received from the USDC sale. An entity that treats stablecoins from customers as revenue proceeds could present the sale as operating, so Tarnholme discloses its policy.

Tarnholme recognised £35,321.89 of revenue from the three overseas clients and received none of it in cash. Under the indirect method, that revenue is removed from operating cash flow as a non-cash item. The investing side of the non-cash transactions, such as the £35,455.16 of tokens received for receivables, is disclosed elsewhere in the financial statements.

Key takeaways

For a holder like Tarnholme, with no issuer relationship, a stablecoin is a non-cash asset with its own cost in pounds, not a dollar balance.
On Tarnholme's policy, a dollar receivable is retranslated on settlement first, and the token then takes its amount. Revenue does not move.
A one-for-one swap can create a loss, and every gas payment is a disposal of ether.
At the year end, each lot is tested for impairment. A rising pound alone can impair a token that never left its peg.
These entries are not a tax return, because UK tax depends on why each token is held (our stablecoin tax guide).

How Tokenbooks helps with stablecoin journal entries

Tokenbooks assigns every synced transaction an operation type from a fixed set and drafts a double-entry journal for it under the portfolio's accounting policy, ready for a reviewer to post. A trade of one stablecoin for another, USDC for USDT for example, is an exchange, booked as a disposal of the first and an acquisition of the second.

Gas has two selectable treatments: capitalised into cost basis, with the fee treated as a disposal of the fee asset, or expensed. An inspectable lot ledger records every add, disposal, cut, move, reservation and release, and a per-portfolio rules engine re-maps postings where a house convention differs.

Start with the crypto accounting workflow in Tokenbooks.