ASC 350-60 Crypto Asset Accounting

Was the crypto asset created or issued by the reporting entity or its related parties?

ASC 350-60-15-1 excludes crypto assets created or issued by the reporting entity or its related parties because issuer-side questions - obligations to token holders, revenue recognition, and cost basis - are governed by other GAAP. Related parties are identified using the ASC 850 definition. A common trap is a token issued by a consolidated subsidiary or by a founder acting on the entity's behalf; those holdings remain out of scope even if identical tokens trade publicly.

Assets created or issued by the reporting entity or its related parties are excluded from ASC 350-60 scope (ASC 350-60-15-1).

Official guidance: FASB Accounting Standards Codification

Does the holding meet the definition of an intangible asset, that is, an asset lacking physical substance that is not a financial asset?

The first scope criterion in ASC 350-60-15-1 requires the asset to meet the Codification Master Glossary definition of an intangible asset, which excludes financial assets. Look through the token wrapper to the substance of what is held: a tokenized share or bond is accounted for as the security it represents, not as a crypto intangible. The common trap is letting the delivery technology, rather than the rights conveyed, drive classification.

The instrument is not an intangible asset; account for the underlying financial instrument under other applicable GAAP, such as ASC 310, ASC 320, ASC 321, or ASC 815.

Official guidance: FASB Accounting Standards Codification

Does the asset provide the holder with enforceable rights to, or claims on, underlying goods, services, or other assets?

ASC 350-60-15-1 scopes out assets that give the holder enforceable rights to, or claims on, underlying goods, services, or other assets. Read the legal terms, redemption mechanics, and issuer obligations rather than relying on marketing labels. Common traps: treating a redeemable stablecoin as if it were in scope, and assuming a wrapped token qualifies when it actually represents a redemption claim on the underlying asset held by a third party.

Claim-bearing tokens fail the scope criterion in ASC 350-60-15-1; account for the rights conveyed under other applicable GAAP.

Official guidance: FASB Accounting Standards Codification

How is the asset created, recorded, and secured?

Two of the six scope criteria in ASC 350-60-15-1 are technological: the asset must be created or reside on a distributed ledger based on blockchain or similar technology, and it must be secured through cryptography. Support the answer with the protocol whitepaper, technical documentation, or a specialist's description of the ledger. Note that private permissioned chains can satisfy these criteria; the ledger does not have to be public.

The asset fails the distributed ledger criterion in ASC 350-60-15-1; if it is an intangible asset, it remains in the ASC 350-30 model. The asset fails the cryptographic security criterion in ASC 350-60-15-1; if it is an intangible asset, it remains in the ASC 350-30 model.

Official guidance: FASB Accounting Standards Codification

Is the asset fungible, that is, interchangeable unit-for-unit with other units of the same asset?

Fungibility under ASC 350-60-15-1 means one unit is interchangeable with another unit of the same asset. NFTs fail this criterion and stay in the cost-less-impairment model of ASC 350-30 even when they trade actively. Watch for edge cases: fractionalized NFT interests, semi-fungible token standards, and tokens issued in distinct series where units are interchangeable only within a series require careful analysis of what the unit of account actually is.

Non-fungible tokens fail the fungibility criterion in ASC 350-60-15-1 and remain in the ASC 350-30 indefinite-lived intangible model.

Official guidance: FASB Accounting Standards Codification

Which best describes the market evidence available to measure the crypto asset at fair value under ASC 820?

ASC 350-60-35-1 requires subsequent measurement at fair value in accordance with Topic 820, with changes recognized in net income each reporting period. Identify the principal market - the market with the greatest volume and level of activity for the asset that the entity can access - and price from that market. Common traps: using an index or aggregator price for a market the entity cannot access, and inconsistent pricing cutoffs when exchanges trade continuously across time zones.

Confirm the fair value measurement framework in Topic 820 and the crypto asset measurement requirement in ASC 350-60-35-1 at the official source.

Official guidance: FASB Accounting Standards Codification

• FASB Accounting Standards Codification

Is the crypto asset subject to contractual sale restrictions, such as a lock-up in a token purchase agreement or a vesting schedule?

A contractual sale restriction does not change the measurement model: the asset stays at fair value under ASC 350-60-35-1, and consistent with Topic 820 the entity does not adjust fair value for a restriction that is a characteristic of the holding entity rather than of the asset. What changes is disclosure - ASC 350-60-50-2 requires the fair value of restricted holdings, the nature and remaining duration of the restrictions, and the circumstances that could cause them to lapse. The trap is netting restricted and unrestricted holdings in the disclosure.

In scope with contractual sale restrictions - measure at fair value and provide the restriction disclosures in ASC 350-60-50-2. In scope - measure at fair value through net income with separate presentation and full ASC 350-60 disclosures.

Official guidance: FASB Accounting Standards Codification