Factor affecting voluntary crypto asset reporting in financial statements: management discretion and long-term financing

The purpose of this study is to investigate the factors influencing companies’ decisions to voluntarily disclose cryptocurrency-related aspects in their 10-K filings. By utilising the SEC’s EDGAR database, we collected 687 10-K filings from 268 companies that reported on cryptocurrency activities between 2015 and 2022. These companies are actively involved in various aspects of crypto assets, with a predominant focus on cryptocurrency. To analyse our data, we employed fixed effect (within) regression models. Based on our findings, growth companies attract funds more from creditors than investors, securing financial leverage for new initiatives. Also, discretionary accruals provide insights into the implications of crypto asset disclosure practices. The increasing adoption of cryptocurrencies and blockchain technology by companies presents opportunities to transform traditional financial systems. Voluntary disclosure of cryptocurrency and related activities is an increasing practice, emphasising accountants’ needs to adapt and integrate it into the 10-K reports.