Not-for-profit entities (NFPs) may hold crypto assets for purposes of investment, to execute transactions with customers, or for other reasons. For crypto assets that meet the scope criteria in ASC 350-60, NFPs follow the same accounting guidance for crypto assets as business entities as described in CA 2.4. If the crypto asset does not meet the scope criteria in ASC 350-60, differences may arise if the NFP is holding the crypto asset as an investment. ASC 958-325 and ASC 954-325 provide guidance on accounting for investments in nonfinancial assets, such as intangible assets, when those assets are acquired for purposes of earning an investment return.
For NFPs, other than healthcare entities within the scope of ASC 954, Health care entities, measurement of nonfinancial investments that GAAP does not require to be measured at fair value is based on the portfolio-wide accounting policy selected for reporting investments, as explained in NP 9.3. The method selected (carrying value or fair value) must be consistently applied to all alternative investments within a portfolio. If a non-healthcare NFP elects the portfolio-wide fair value option, and holds crypto assets in an investment portfolio managed for total return (such as an endowment), then we believe the crypto assets should be carried at fair value, similar to crypto assets that meet the scope criteria in ASC 350-60.
For NFP healthcare entities, ASC 954-325-35-1 requires subsequent reporting of investments in nonfinancial assets at amortized cost subject to impairment considerations for property, plant, and equipment, consistent with those in ASC 360-10, Property, plant, and equipment. Crypto assets that do not meet the scope criteria in ASC 350-60 and are accounted for as indefinite lived intangible assets would be reported at cost less any impairment recognized.
In some cases, a donor may contribute crypto assets to an NFP. ASC 958 requires that donated nonfinancial assets be measured at fair value at the date of the gift (see NP 7.4.2 for further information on measuring donations of noncash assets). Subsequent accounting for the contributed crypto asset will depend on its use. If the donated crypto asset meets the scope criteria in ASC 350-60 or is held as an investment, the discussion above applies. Otherwise, the crypto asset should be accounted for as an intangible asset in accordance with ASC 350-30. In that case, the fair value of the crypto asset at the date of gift becomes its carrying value for purposes of subsequent measurement.
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