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Frequently Asked Questions About Implementation of the FASB’s New Crypto Assets Standard (April 2, 2024)

Heads Up | Volume 31, Issue 7
April 2, 2024
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Frequently Asked Questions About Implementation of the FASB’s New Crypto Assets Standard


FASB Accounting Standards Update (ASU) No. 2023-08, Accounting for and Disclosure of Crypto Assets.
For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”
For all entities, the ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. See the Effective Date and Transition section within Deloitte’s December 15, 2023, Heads Up for more information.
A reporting entity that performs mining or validating services, and that receives newly created crypto assets as consideration for those services, would not be deemed the creator of those crypto assets as long as the services constitute the entity’s only involvement with the creation of the asset.
The practice aid provides nonauthoritative interpretive guidance from the AICPA’s Digital Assets Working Group on how to account for and audit digital assets.
The cumulative-effect adjustment is applied on a modified retrospective basis, meaning that the impact of a change in accounting principle is reported as a cumulative catch-up adjustment to beginning retained earnings. The Board decided against requiring a full retrospective approach, or providing an option for entities to do so, because the expected costs of full retrospective application may not justify the potential expected benefits for investors.
Note that for illustrative purposes only, the first-in, first-out method is used as the cost method in this example.
While not specifically required in the ASU, this example language would be expected within an entity’s financial statements in accordance with SAB Topic 11.M (SAB 74), “Miscellaneous Disclosure; Disclosure of the Impact That Recently Issued Accounting Standards Will Have on the Financial Statements of the Registrant When Adopted in a Future Period.”