2.4 Classification and Scope Decision Tree

An entity must first determine the appropriate guidance to apply in accounting for a digital asset that the entity holds. To do so, the entity must determine whether the accounting for the digital asset is addressed in any relevant U.S. GAAP. In the absence of other applicable U.S. GAAP, an entity must determine whether the digital asset meets the definition of an intangible asset and is therefore within the scope of the intangible asset guidance in ASC 350. If it is an intangible asset, it would be accounted for as such in accordance with ASC 350-30 or ASC 350-60 (added by ASU 2023-08). Regardless of whether a digital asset is within the scope of ASC 350-30 or ASC 350-60, the recognition and initial measurement guidance are the same. The primary differences between the two subtopics are related to subsequent measurement and disclosures. The digital asset would be subsequently measured at (1) cost less impairment under ASC 350-30 and (2) fair value under ASC 350-60.