The AICPA has updated their Practice Aid on Accounting for and auditing of digital assets to address more niche Codification topics. The update includes discussion of accounting for broker dealers as well as investment companies. It also provides guidance on determining principal markets for fair value. The Digital Assets Working Group has been great in providing accounting and auditing guidance for entities as this topic is not well addressed in authoritative literature.
Cryptocurrency is becoming a more recognized transaction with more entities participating in this ecosystem. The AICPA has issued non-authoritative guidance on accounting and auditing digital assets. Current FASB does not have authoritative guidance in this area, so the practice aid addresses some common considerations. In addition, it addresses the questions firms need to address before accepting a client and provides procedures to ensure that digital asset risks are properly identified and an appropriate audit response is performed. We’ll take a high-level look at some of the considerations for those contemplating moving into this area.