The AICPA updated its guidance on the accounting for crypto asset lending as outlined in the AICPA’s Digital Assets Practice Aid. See CA 3.4 for additional information.
As part of the updated guidance, Question 25 of the AICPA’s Digital Assets Practice Aid provides examples of disclosures that may be applicable to the lender. Disclosures may include, but are not limited to, the following:
  • The terms, risks, and nature of the lending arrangements
  • How management evaluates and monitors risk exposure (e.g., credit risk)
  • If collateral is required, the type and amount of collateral, whether additional collateral is required to be pledged, and the collateral management policies implemented by the lender, such as how it can liquidate the collateral in the event of borrower default
  • Disclosures using the principles of ASC 326, such as factors used to develop expected credit losses including, but not limited to:
    • information about the credit risk characteristics of the borrowers and lending arrangements, both quantitative and qualitative
    • changes in the allowance for expected credit losses, such as current period provisions and write-offs and, if applicable, recoveries of previous write-offs
    • crypto loans that are delinquent and how the status of such loans past due is determined
  • Any vulnerability due to concentrations using the principles in ASC 275
  • If the lending arrangement involves a related party, the disclosures in ASC 850, Related Party Disclosures
  • Disclosures in ASC 820 related to measuring the crypto asset loan receivable
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