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Digital assets (even those that can function as a medium of exchange) likely do not meet the definition of cash as they are not legal tender. Digital assets also may not meet the definition of a financial asset as they do not include an obligation to deliver cash or another financial instrument. However, given that intangible assets are defined as assets that lack physical substance, many digital assets meet this definition. When a digital asset is determined to meet the definition of an intangible asset, it should follow the guidance in ASC 350. Given the nature of many digital assets, they will usually have indefinite useful lives.
See PwC’s Crypto assets guide (CA) for the relevant accounting and reporting considerations related to digital assets.
New guidance
In December 2023, the FASB issued ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. If crypto assets that meet the definition of an intangible asset also meet all of the additional criteria in ASC 350-60-15-1, ASU 2023-08 indicates that reporting entities should follow the accounting guidance in ASC 350-60 for the subsequent measurement, presentation, and disclosure of those crypto assets. This guidance requires all entities holding in-scope crypto assets to subsequently measure those in-scope crypto assets at fair value, with the remeasurement recorded in net income. See CA 1.1, CA 2.4 through CA 2.4.2 and CA 5.4 through CA 5.4.2 for accounting considerations related to crypto assets in the scope of ASC 350-60.
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