An American Institute of Certified Public Accountants' Working Group (the "Working Group") published a practice aid on how to account for and audit digital assets under U.S. generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS). The practice aid is intended for for financial statement preparers and auditors.

The practice aid provides guidance concerning when an entity:

  • purchases crypto-assets, including the (i) classification and (ii) measurement;
  • receives digital assets that are classified as indefinite-lived intangible assets, including the (i) recognition and initial measurement, (ii) accounting, (iii) cost basis measurement, and (iv) derecognition; and
  • holds its digital asset in a third-party hosted wallet service (i.e., the custodian).

The Working Group noted that it will soon be releasing an overview on auditing for digital assets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.