# Accounting This section describes the accounting framework used by the hBTC vault, including NAV calculation, income recognition, and compounding mechanics. #### Share Price Updates The vault performs **daily accrual and valuation**, with rewards logged once per day. At each daily valuation: * All assets and liabilities are marked to market * Accrued strategy income and financing costs are recognized * Net assets are recalculated * Rewards are logged * The hBTC share price updates accordingly {% hint style="info" %} Daily NAV movements **may be positive or negative** depending on market conditions and strategy performance. {% endhint %} #### BTC Denomination Strategy profits typically accrue in stablecoins within the vault as a result of borrowing and yield generation. However, all performance is accounted for and delivered in Bitcoin terms. To align realized income with BTC-denominated NAV reporting, the vault periodically converts stablecoin profits into Bitcoin (sBTC). This harvesting process is integrated into the protocol's [Delta Control framework](/hbtc/how-it-works/risk-controls.md#id-2-delta-control) and ensures that realized gains are reflected in BTC exposure. #### Compounding and Reinvestment All realized income is retained within the vault and **automatically reinvested**, resulting in continuous compounding. This reinvestment is reflected directly in the hBTC share price. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.hermetica.fi/hbtc/how-it-works/accounting.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.