Crypto assets: accounting moves closer to the economics

For years, crypto assets sat awkwardly in financial statements.

A company could hold an asset that moved every day in the market, while the accounting did not fully move with it. Under the old US GAAP model, many crypto assets were treated as indefinite-lived intangible assets. Losses could be recognised through impairment.

Gains could not be reflected until disposal.

That created a one-way result: market downside appeared in the accounts, but market recovery often did not.

The US GAAP update changed that logic.

For in-scope crypto assets, the model moved to fair value measurement, with changes recognised in net income. This is not only a technical accounting adjustment. It changes how volatility appears in reported performance, how balances are explained to boards and investors, and how finance teams need to support the numbers.

The direction of travel is clear: digital assets are no longer treated as a side note.

Companies holding crypto assets need stronger evidence around:

• what assets are held;

• how they are controlled;

• where pricing data comes from;

• whether restrictions exist;

• how movements are explained period to period.

This matters especially for businesses where digital assets are not incidental. Miners, exchanges, web3 platforms, treasury-heavy businesses and investment structures all need reporting that can stand up to scrutiny.

There is also an important cross-border point.

US GAAP is now more direct for many crypto holdings. IFRS has taken a different route. In many cases, cryptocurrencies are analysed under IAS 38 as intangible assets, unless they are held for sale in the ordinary course of business, where IAS 2 may apply. That makes the IFRS answer more dependent on the facts: why the asset is held, how it is used, and what the business model actually is.

For finance teams, the practical message is simple.

Crypto accounting cannot be handled only at year-end. The policy, wallet evidence, pricing source, reconciliation process and disclosure approach all need to be built into the monthly close.

The accounting has moved closer to the economics. Reporting processes now need to catch up.