This page explains the Periodic Average Cost and Average Cost, which are methods for calculating profit and loss of cryptocurrencies.

### 1. Periodic Average Cost and Average Cost

According to National Tax Agency guidelines, two calculation methods are used to calculate the profit and loss of virtual currencies: Periodic Average Cost and Average Cost.

**Periodic Average Cost:**"Unit Price" is calculated by dividing the total purchase amount for the entire period by the total purchase quantity.**Average Cost:**Calculate the "Unit Price" each time a cryptocurrency is purchased.

We also offers a choice of two calculation methods. (*For individuals, the "Periodic Average Cost" is applied unless a different method is reported.)

Changing your ledger settings

### 2．Unit Price

The average acquisition price of each coin.

We calculates the "Unit Price" based on transactions uploaded by customers.

*In accordance with guidelines from the National Tax Agency, we are not required to calculate profit and loss for each exchange.

Regarding the Calculation and Display of Profit and Loss for Each Exchange

Using a simple trading example that does not take into account commissions and other factors, we will show you how to calculate the average acquisition price in two ways: periodic average cost method/average cost method.

Example: Suppose that within the fiscal year 2022, Bitcoin (BTC) is traded in yen in the following order.

(1) Buy 2 BTC at 500 yen

(2) Buy 1 BTC at 1,100 yen

(3) Sell 1 BTC at 1,200 yen

(4) Buy 1 BTC at 1,000 yen

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▼Method for Calculating Unit Price using the Periodic Average Cost

The average acquisition unit price is the price obtained by dividing the total amount of purchase transactions during the period (①+②+④) by 4 lots.

(①500yen*2 + ②1,100yen*1 + ④1,000yen*1) ÷ 4 = average acquisition unit price of 775 yen

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▼Method for Calculating Unit Price using the Average Cost

(1) Since 2 BTC of 500 yen were purchased, the average acquisition unit price is 500 yen.

(2) 1 BTC at 1,100 yen was purchased, so (1) 500 yen * 2 BTC + (2) 1,100 yen * 1 BTC) ÷ 3 BTC = 700 yen on average acquisition price.

(3) No change when sold.

(4) 1 BTC of 1,000 yen was purchased, so (②) 700 yen * 2 BTC + (④ 1,000 yen * 1 BTC) ÷ 3 BTC = average acquisition unit price of 800 yen.

### 3．Comparison of Calculation Results

As can be seen from the two aforementioned cases, the difference between the periodic average cost method and the average cost method is the timing for calculating the "Unit Price" of the purchased cryptocurrency.

The average method calculates the "Unit Price" for each purchase, while the periodic average method calculates it all together at the end of the reference period.

Because of the difference in timing of calculation, the final amount of income generated is basically the same, although the calculation results for a single year are different.

Example:

(1) Buy 2 BTC for 500 yen

(2) Buy 1 BTC at 1,100 yen

(3) Sell 1 BTC at 1,200 yen

(4) Buy 1 BTC at 1,000 yen

(5) Sell 3 BTC at 1,350 yen/piece on 1/1/2023 *Number of BTC held is now 0.

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▼ Periodic Average Cost

#### ▼Average Cost

As such, although the profit and loss vary from year to year, the total profit and loss will be the same when all coins are sold. (*Changes in tax rates are not considered.)