US GAAP Standards | CryptoGAAP.com

1. What Changed

Prior to ASU 2023-08, crypto assets were treated as indefinite-lived intangible assets under ASC 350-30, measured at historical cost less impairment. The new standard (ASC 350-60) requires subsequent measurement at fair value under ASC 820, with changes recorded in net income each reporting period. This replaces a model that could only recognize decreases in value — never recoveries.

The practical effect is significant: companies holding Bitcoin, Ether, or other qualifying digital assets must now mark their holdings to market at each reporting date and flow changes through the income statement. The old indefinite-lived intangible model — which produced asymmetric, impairment-only adjustments — is no longer permissible for assets within the scope of ASC 350-60.

2. Scope Criteria

A crypto asset falls under ASC 350-60 if it meets all six criteria:

Meets the US GAAP definition of an intangible asset
Does not provide enforceable rights to underlying goods, services, or other assets
Resides or is created on a distributed ledger (blockchain or similar technology)
Is secured through cryptography
Is fungible
Is not created or issued by the reporting entity or its related parties

Notable exclusions: NFTs (non-fungible), wrapped tokens (provide rights to underlying asset), staking positions with lockup conditions.

3. Presentation Requirements

Balance sheet: Crypto assets presented separately from other intangible assets, at fair value
Income statement: Fair value changes presented separately from changes in other intangible assets
Cash flow: Sale of crypto assets received as noncash consideration in the ordinary course and converted nearly immediately to cash → classified as operating activities

4. Key Disclosure Requirements

At each reporting period, for each significant holding, preparers must disclose:

Name of crypto asset
Number of units held
Cost basis (method disclosed: FIFO, specific identification, average cost, or other)
Fair value
Restrictions, if any

5. Open Questions

Several areas remain outside ASC 350-60's explicit scope and require practitioner judgment:

NFT accounting — outside ASC 350-60 scope; falls back to ASC 350-30 indefinite-lived intangible treatment
Wrapped token accounting — outside scope; represents enforceable rights to underlying asset; practitioner judgment required
Staking income recognition — IRS Revenue Ruling 2023-14 addresses federal tax treatment (income when received); GAAP recognition pattern follows similarly
Transaction cost treatment — not addressed by ASU 2023-08; follows ASC 350-30-30-1 general guidance
Transfer pricing for crypto — multinational treasury considerations; no authoritative guidance specific to digital assets

6. Key Framework References