Get ready to start keeping track of virtual currency, as if foreign exchange and complex financial derivatives weren’t enough of a challenge.
At the AICPA Fall Council conference this week, one of the speakers, Edie Weiner, president of Weiner, Edrich, Brown, and co-author of a book called FutureThink: How to Think Clearly in a Time of Change, talked about some of the changes we could be seeing in the profession in the years ahead, including the need for accountants to adjust to virtual worlds and virtual currencies, like Second Life’s Linden dollars.
People are already spending vast amounts of money in Linden dollars, paying both virtual and real money to buy and sell the assets they can use in games like Linden Lab’s Second Life. Online they’re investing in virtual real estate, furnishing homes for their virtual lives online, buying luxury cars and other goods that appear only on their computer screens when they’re inside the alternative reality of massively multiplayer online games like Second Life.
As this activity takes off, keeping track of personal finances in virtual worlds may well call for accountants to set up shop in cyberspace, and not just on the Web sites that many accounting firms have already established.
Hanging out a shingle in Second Life could be a new experience for many accountants. Interactions among avatars in virtual worlds work differently than in the real world, and people typically are not who they say they are in Second Life. The adoption of other personas is readily accepted in Second Life, but accountants do have some responsibility to verify the identities of their clients, even if they are virtual ones.
Taxing authorities such as the IRS may also start taking an interest in virtual currencies, perhaps collecting real money when real currencies are used to purchase virtual goods, as they often are on auction sites like eBay. That is, if the moratorium on taxing Internet purchases ever does expire.
In some ways, our economy is already becoming a virtual one with complex derivatives and obscure financial instruments that are difficult to track, even as they are furiously traded. Add to that the effects of virtual currencies for cyber-worlds like Second Life and you have a mind-bending specialty that some clients may be bringing to their accountants in the near future.
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