The AICPA has issued guidance on how to account for digital assets.
Digital assets are defined as “digital records, made using cryptography for verification and security purposes, on a distributed ledger.” Blockchain is the distributed ledger used for crypocurrency transactions.
Because the business environment is changing so quickly and various types of crypto assets are being used more frequently, the AICPA is providing nonauthoritative guidance on how to account for these assets properly under GAAP rules. Digital assets are used for a variety of purposes, including “as a medium of exchange, as a representation to provide or access goods or services, or as a financing vehicle, such as a security, among other uses,” the AICPA says.
Ten questions and answers related to the issue are included in a free practice aid, which was developed by the AICPA’s the Digital Assets Working Group.
The AICPA notes that auditors should first think carefully about the risks and whether they have the skills needed before accepting or continuing audit engagements involving digital assets.
As additional topics are completed, the practice aid will be updated.