Executive Summary | March 2022

 

Insight

Executive summary: Accounting for crypto assets

High-level summary of the accounting for acquired crypto assets.

Scott Muir

Scott Muir

Partner, Dept. of Professional Practice, KPMG US

+1 212-909-5073

Chase Stobbe

Chase Stobbe

Managing Director, Dept. of Professional Practice, KPMG US

1-571-695-5868


Most crypto assets are accounted for as indefinite-lived intangible assets in the absence of crypto-specific US GAAP. Our executive summary explains.

Applicability

  • Companies that are not broker-dealers or investment companies subject to ASC 940 or ASC 946 that have acquired crypto assets.

Key impacts

  • There is no specific US GAAP on crypto assets.
  • Most crypto assets meet the definition of, and are therefore accounted for as, intangible assets. However, central bank digital currencies (CBDCs) and many stablecoins are not accounted for as crypto intangible assets.
  • Crypto intangible assets like bitcoin and ether generally have an indefinite useful life and therefore are not amortized. 
  • Crypto intangible assets are impaired whenever their fair value falls below their carrying amount.
  • Impairments of crypto intangible assets, once taken, cannot be reversed – even if the asset’s fair value recovers during the same reporting period that an impairment is taken.
  • Sales of crypto intangible assets are subject to ASC 606 (if the sale is to a customer) or ASC 610-20 (if the sale is not to a customer).

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