The AICPA on Thursday published nonauthoritative guidance on issues related to the accounting for digital assets.
The guidance, which consists of 13 questions and answers added to the free practice aid Accounting for and Auditing of Digital Assets, touches on topics including fair value, stablecoins, and how investment companies and broker-dealers should account for digital assets.
The practice aid defines digital assets broadly as digital records, made using cryptography for verification and security purposes, on a distributed ledger. Examples of digital assets include the crypto asset bitcoin, which operates on the Bitcoin blockchain, and ether, which operates on the Ethereum blockchain.
The new guidance is divided among the following five section titles:
- Meeting the Definition of an Investment Company When Engaging in Digital Asset Activities.
- Accounting by an Investment Company for Digital Assets It Holds as an Investment.
- Recognition, Measurement, and Presentation of Digital Assets Specific to Broker-Dealers.
- Considerations for Crypto Assets That Require Fair Value Measurement.
- Accounting for Stablecoin Holdings.
“We are confident that this updated practice aid will address some of the questions that have arisen in the digital assets space,” said Matthew Schell, CPA, partner, Crowe LLP, and co-chair of the AICPA Digital Assets Working Group, which oversees the guide. “The Digital Assets Working Group will continue to provide needed guidance and support in this important evolving space.”
The AICPA created the practice aid in December with nonauthoritative guidance on accounting for digital assets. In July, nonauthoritative auditing guidance for digital assets was added to the practice aid.
— Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.