AICPA Publishes a Practice Aid for Digital Assets

The growing popularity of crypto assets has left many Certified Public Accountants (CPAs) contemplating how to best account for them under Generally Accepted Accounting Principles (GAAP). 

The American Institute of CPAs (AICPA) has not been oblivious to the rapidly changing digital assets ecosystem and has even released a practice aid to help in crypto accountancy on Monday, Dec. 16. The practice aid is founded on professional experience and literature from members of the Digital Assets Working Group. It also emphasizes US-based GAAP. 

Crypto Assets Dubbed Cryptographed Digital Records

The practice aid views crypto assets as digital records that have been cryptographed for security and verification purposes on a distributed ledger. It also addresses ten questions about how digital assets should be accounted for under GAAP. 

For instance, how should an entity that does not apply under the specialized industry guidance account for purchases of crypto assets for cash?

The AICPA has also acknowledged that crypto-assets can be utilized for various purposes, such as a medium of exchange or as a financing vehicle. 

Diana Krupica, AICPA’s Emerging Assurance Technology Lead Manager, noted: “This nonauthoritative guidance will be updated with additional content regularly, as topics are finalized, and posted to aicpa.org.” 

She added: “Content related to auditing of digital assets is expected to be added to the Practice Aid in early 2020.”

The AICPA created the Digital Assets Working Group as a joint working group under the Assurance Services Executive Committee and the Financial Reporting Executive Committee. It comprises of two areas, one that tackles accounting and the other on auditing matters. 

The accounting subgroup was, therefore, mandated with creating nonauthoritative guidance on accounting for crypto assets intended for financial statement auditors and preparers with a notable knowledge of blockchain technology. 

As reported by Blockchain.News on Nov 26, the Crypto Price Index (CPI) is expected to be an ideal crypto market indicator because it will include over 200 of the top traded cryptocurrencies based on market capitalization. As a result, it is anticipated to function like the Dow Jones Industrial Average by offering insights about the trading history of the major blockchain projects.

 

 

Image via Shutterstock