Lukka’s Global Head of Accounting Solutions, Suzanne Morsfield, appeared on a panel hosted by NYU’s Ross Institute, titled What Should the Rules be for Crypto Assets? Accounting, Regulatory, and Legislative Perspectives.
Suzanne spoke on the current accounting standards for crypto assets and how they might evolve as the market becomes more mature. She explained that crypto is currently being classified as an indefinite life intangible asset requiring an impairment model, similar to a brand or trademark. The current accounting methods can leave some questions unanswered, especially when using crypto for more than simply holding it as an investment. She posed the question, “what would be the economic or accounting meaning if a company uses a brand or a trademark for its purchases or lending.”
She also pointed out that accounting classification should be based on the economic use of the specific crypto asset. Businesses then need to properly value their holdings. Suzanne discussed how fair value methods for pricing crypto assets will permit companies to identify a principal market to value their holdings, and then calculate mark-to-market or impairment adjustments, as needed.
Under current standards, accounting for crypto assets can be confusing. Lukka has a variety of resources to help you in your crypto data management and education. Lukka Library is a content database filled with articles, educational resources, and position papers from some of the industry’s foremost thought leaders on crypto tax regulation, and many other subjects.