Article

Updated practice aid: Accounting for digital assets

Feb 28, 2022
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Audit Financial assets Intangibles & other assets

The American Institute of Certified Public Accountants Digital Assets Working Group recently updated a practice aid, Accounting for and auditing of digital assetsto include three new accounting sections, which address:

  • Contracts involving derivatives and embedded derivatives
  • Crypto asset lending
  • Mining

Other accounting matters discussed in this practice aid include:

  • Classification and measurement when an entity purchases crypto assets
  • Recognition and initial measurement when an entity receives digital assets that are classified as indefinite-lived intangible assets
  • Subsequent accounting for digital assets classified as indefinite-lived intangible assets
  • Measurement of cost basis of digital assets that are classified as indefinite–lived intangible assets when derecognized
  • Derecognition of digital asset holdings that are classified as indefinite-lived intangible assets
  • Recognition of digital assets when an entity uses a third-party hosted wallet service
  • 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

The audit-related content of the practice aid addresses:

  • Client acceptance and continuance
  • Risk assessment and processes and controls
  • Laws and regulations and related parties

The practice aid also includes a blockchain universal glossary.

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