Board pack
Take the decision to your board, properly prepared
Three working artefacts: a policy skeleton, a board paper outline, and the questions your auditor will ask. Outlines and questions, not advice. Your board and your advisers settle every answer.
Treasury policy skeleton
1. Purpose and objectives
Why the company would hold bitcoin at all, in the board's own words, and what success looks like without a price forecast.
2. Scope and authority
Which entities and funds the policy covers, who may approve a purchase, a sale, a transfer, and a change to the signing arrangement.
3. Allocation parameters
The limit the board is comfortable with, expressed against reserves and operating cash. The board sets the number; nothing here suggests one.
4. Liquidity rule
The operating cash that stays outside bitcoin in all scenarios, so payroll, tax, and suppliers are paid after a severe fall.
5. Acquisition process
How purchases are approved, executed, recorded, and reconciled, and who verifies each step.
6. Custody and signing controls
How many authorised signers there are, how many must act together, and how a signing change is approved and documented.
7. Continuity
What happens when an executive leaves, a signer is unavailable, or a device is lost, and how each event is rehearsed before it happens.
8. Accounting and tax treatment
Classification, measurement, and record-keeping, settled with the company's own accountant and tax adviser, not by this site.
9. Reporting and review
What the board sees, how often, and the events that trigger an out-of-cycle review of the policy itself.
Board paper outline
1. Decision sought
One sentence: the specific resolution the board is being asked to pass.
2. Background
Why this is in front of the board now, and what changed to prompt it.
3. Options considered
Including doing nothing, and what each option leaves unresolved.
4. Financial resilience
Reserves after a severe fall, with operating cash protected. The treasury instrument's board summary is built for this section.
5. Risks and mitigations
Volatility, control failure, key-person dependence, and accounting or tax surprises, each with the control that answers it.
6. Controls and governance
The signing arrangement, approval authority, and continuity plan the policy skeleton defines.
7. External advice taken
Accounting, tax, and legal input the company has obtained, and any still outstanding.
8. Recommendation and resolution
What management recommends and the resolution wording the board is asked to record.
Start with the treasury instrument, then see how implementation works once a board has decided.
Questions your auditor will ask
Accounting
- How will the holding be classified and measured in our accounts, and what does that do to reported results in a volatile year?
- What disclosures will the board need to make, and to whom?
Audit evidence
- What evidence will you need that the company controls the bitcoin: signing records, address verification, reconciliations?
- How will existence and ownership be confirmed at balance date?
Tax
- What tax events do purchases, sales, and transfers create for the company, and what records must exist from day one?
- How are fees and costs treated?
Controls
- Who can move funds, acting with whom, and how is that enforced rather than merely documented?
- What happens to control when a director or executive leaves, and how would you expect that to be evidenced?