6.1 Presentation and Disclosure of Crypto Assets That Are Not Within the Scope of ASU 2023-08

6.1.1 Balance Sheet and Income Statement Presentation

ASC 350-30

45-1 At a minimum, all intangible assets shall be aggregated and presented as a separate line item in the statement of financial position. However, that requirement does not preclude presentation of individual intangible assets or classes of intangible assets as separate line items.

45-2 The amortization expense and impairment losses for intangible assets shall be presented in income statement line items within continuing operations as deemed appropriate for each entity.

45-3 Paragraphs 350-30-35-9 through 35-12 and 350-30-35-15 through 35-17 require that an intangible asset be tested for impairment when it is determined that the asset shall no longer be amortized or shall begin to be amortized due to a reassessment of its remaining useful life. An impairment loss resulting from that impairment test shall not be recognized as a change in accounting principle.

In accordance with ASC 350-30-45-1, an entity may elect to aggregate all of its intangible assets and present them as a single line item on the balance sheet or may elect to present individual intangible assets or classes of intangible assets separately to distinguish crypto assets from other traditional intangible assets like patents. An entity should also appropriately classify intangible assets as either current or noncurrent in accordance with ASC 210. Under ASC 350-30-45-2, any impairment losses related to intangible assets should be ”presented in income statement line items within continuing operations as deemed appropriate for each entity.” In addition, an entity should determine whether it is the principal or agent in a sale of crypto assets to counterparties as well as the impact of such a determination on the entity’s income statement (i.e., gross vs. net). See Section 5.1 for more information.

6.1.2 Financial Statement Disclosures

In providing disclosures about its holdings of crypto assets that are not within the scope of ASU 2023-08, an entity would apply the relevant accounting guidance it uses to account for its crypto asset holdings and transactions (e.g., ASC 350, ASC 606, ASC 610-20, ASC 845). An entity must disclose the accounting policy related to its crypto asset holdings, the business purpose for holding the assets, qualitative and quantitative information about its crypto assets, and risks and uncertainties associated with its crypto asset holdings. In addition, an entity will need to use judgment to determine the level of detail to include in its disclosures so that users of the entity’s financial statements can understand the entity’s holdings of crypto assets, the purpose of its investment, and the impact on the entity’s financial statements.

As mentioned in Section 4.1, SEC registrants should carefully consider non-GAAP measures and disclosures related to crypto assets, particularly impairment losses, since the SEC has often focused on this topic in its comment letters and challenges.

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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.