Accounting for Digital Assets: Key Considerations

This paper explores the accounting implications of recent investment in and use of digital assets, including, but not limited to, cryptocurrencies. The paper aims to identify and illustrate how digital assets are accounted for and reported under US Generally Accepted Accounting Principles (US GAAP), as upheld by the Financial Accounting Standards Board (FASB), including comparisons with the International Financial Reporting Standards (IFRS), as upheld by the International Accounting Standards Board.

As use of digital assets becomes more pervasive, alternative approaches to accounting for digital assets should be introduced under US GAAP and IFRS to create more useful financial reporting information. At present, many market participants believe the existing accounting frameworks do not provide decision-useful information to users of financial statements.

The US Securities and Exchange Commission has received a number of questions relating to digital asset-related transactions or business models. The topics covered include: (1) when digital assets represent an asset or liability of the registrant; (2) determining the cost basis for digital assets; and (3) revenue recognition considerations. The FASB issued a consultation in 2021 to invite stakeholder feedback about the future standard-setting agenda of the FASB, and the vast majority of respondents identified digital assets as a top priority. Out of 522 responses received by the FASB, 445 responses from a variety of stakeholders focused solely on accounting for digital assets. Those respondents included academics, holders of digital assets, individuals, investors and other preparers,
practitioners and users of financial statements.

In this paper, it is proposed that the framework for accounting for digital assets should allow for such assets to be accounted for at fair value

Documents (1) for Accounting for Digital Assets: Key Considerations

Response to ESMA Guarantees

On April 30, ISDA responded to the European Securities and Markets Authority (ESMA) consultation paper on guarantees as central counterparty (CCP) collateral and certain aspects of CCP investment policy. ISDA broadly supports ESMA’s proposed draft regulatory technical standards (RTS) to...

ISDA AGM Studio: Jenny Cosco and Jason Granet

Jenny Cosco, global head of government relations and regulatory strategy at LSEG, and Jason Granet, chief investment officer at BNY, speak with Tara Kruse, ISDA’s global head of derivative products and infrastructure, about how firms can manage liquidity pressures during...