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5.1 Disclosures related to crypto assets
Publication date: 28 Feb 2023
us Crypto assets guide 5.1
Other than SAB 121 there is no authoritative guidance that specifically addresses the accounting for crypto assets, therefore reporting entities should consider disclosures based on the relevant accounting standard applied (e.g., indefinite-lived intangible, financial asset). See CA 3.7.1 for additional considerations related to the scope of SAB 121 and CA 5.2 for the SAB 121 disclosure requirements.
Figure CA 5-1 summarizes some of the more common topics for disclosure. However, this list is not exhaustive and will need to be tailored to develop disclosures that are specific to the entity and the relevant facts and circumstances.
Figure CA 5-1
Frequently required disclosures
Frequently required disclosures
Accounting guidance | Requirement | Additional information |
ASC 275, Risks and Uncertainties | Given the risks and uncertainties associated with certain crypto assets, reporting entities should consider the need for disclosures about the nature of the crypto asset activities they are undertaking, the use of estimates for fair value, and any vulnerabilities due to concentration of risk due to a lack of diversification. | |
ASC 350, Intangibles – Goodwill and Other | When an impairment is recognized on crypto assets accounted for as intangible assets, include a description of the circumstances leading to the impairment, the amount of the impairment, the caption in the income statement that includes the impairment loss, and the segment in which the impaired asset is reported. | |
ASC 820, Fair Value Measurement | When the crypto asset is a financial asset, include the relevant disclosures for an instrument that is recorded at fair value on a recurring basis. For crypto assets that are recognized as intangible assets, include the fair value disclosure for assets recorded at fair value on a non-recurring basis. | |
Additional considerations for SEC registrants | Regulation S-X Article 5 requires registrants to separately state each class of intangible asset that is in excess of 5% of total assets. The amount of significant additions or deletions related to these assets should be disclosed in a footnote. Registrants should also consider additional disclosures outside of the financial statements, including any material information that may be necessary to ensure the financial statements are not misleading. In meeting their disclosure obligations, registrants should consider disclosures related to the description of the business, risk factors, and management’s discussion and analysis. For additional information and illustrative examples of comments, refer to the SEC’s Sample Letter to Companies Regarding Recent Developments in Crypto Asset Markets. |
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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