Hot Topic |March 2022

 

Insight

Evaluating custody of digital assets

We explore accounting ownership of custodied digital assets, and when custody affects revenue recognition.

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


In this Hot Topic, we delve into how an entity assesses the accounting owner of custodied digital assets and when custody is a performance obligation under ASC 606. 

Applicability

All entities that either:

  • Engage unrelated custodians to hold their digital assets; or
  • Act as a digital asset custodian for individuals or other entities

Relevant dates

  • Effective immediately

Topics addressed:

  • Accounting ownership of digital assets purchased through a custodial wallet
  • Accounting ownership of digital assets controlled by the depositor before transfer into a custodial wallet
  • Identifying custodial performance obligations under the revenue standard (ASC 606)

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