Crypto assets shift to fair value under ASU 2023-08

EY Crypto Asset Accounting and Tax Explained: what changed under US GAAP, how it affects disclosures, and what teams should do next.

Organizations are aligning policies and systems to the Financial Accounting Standards Board’s (FASB) new crypto standard while monitoring parallel IRS reporting developments. This report synthesizes EY crypto asset accounting and tax guidance with the latest rule changes so preparers can assess scope, measurement, and near-term control requirements.

EY guidance on ASU 2023-08: in-scope assets and fair value

According to the Financial Accounting Standards Board, ASU 2023-08 requires that certain crypto assets be measured at fair value each reporting period, with gains and losses recognized in net income. The standard replaces the prior cost-less-impairment approach for in-scope assets, aligning financial statements more closely with observable market movements.

The scope is limited to crypto assets defined in ASC 350-60; entities should determine which tokens meet those criteria and apply fair value measurement consistently each period. Preparers reviewing wallets and exchange accounts can prioritize clarity on ownership rights and restrictions to support measurement and presentation under US GAAP.

In practice, EY crypto asset accounting and tax materials emphasize policy-setting and data readiness to operationalize fair value. That includes inventorying tokens by legal rights and settlement mechanics, documenting price sources and cutoffs, and establishing procedures to evidence period-end valuations.

Why fair value matters: transparency, volatility, and disclosure obligations

As reported by Accounting Today, fair value is viewed as more decision-useful than the old impairment model but may increase earnings volatility and the disclosure burden for many companies. Preparers should anticipate expanded rollforwards and visibility into restricted balances and wallet movements as part of the new reporting baseline.

“[The] new FASB guidance is likely to encourage adoption of digital assets, providing greater clarity and helping companies align decisions with accurate disclosures,” said Aaron Jacob, VP & GM, Enterprise Accounting, at TaxBit.

The report notes that stronger systems and reconciliations are needed to support fair value, including controls that tie on-chain and exchange activity to the general ledger. Clear audit trails and consistent classification policies reduce the risk of inconsistent measurement across reporting periods.

At the time of this writing, Bitcoin (BTC) traded around $65,150, and the market backdrop included very high volatility of roughly 11.72% alongside a bearish sentiment tag. These figures frame why earnings could appear more variable under fair value, even when underlying strategies have not changed.

Immediate steps: fair value controls, EY CAAT, 1099-DA readiness

Near term, finance and accounting teams can formalize fair value control activities: define price hierarchies and cutoff times, reconcile subledgers to wallets and exchanges, and document frequency and independence of valuation checks. Disclosure templates and restricted-asset tracking help standardize rollforwards and reduce last‑mile adjustments.

Organizations frequently reference EY CAAT (Crypto Asset Accounting & Tax Tool) to standardize transaction capture across exchanges and wallets and to support audit-ready outputs, including reconciliations and rollforwards. Aligning data ingestion with ledger mapping improves completeness and speeds review of period-end measurements.

According to EY Tax News, new IRS and Treasury rules for 2025 introduce Form 1099-DA and per-wallet cost-basis tracking, expanding broker reporting obligations and documentation needs. The update highlights that taxpayers and brokers may need to refine asset classification (including stablecoins), enhance gain/loss reconciliations, and adapt compliance systems ahead of first filings.

FF News reported that EY’s alliance with TaxBit supports detailed cost-basis computation, validation, and digital asset tax reporting, which can complement existing accounting workflows. Integration of tooling with policy and controls can help maintain consistent results across accounting and tax.

Assets outside ASU 2023-08: NFTs, wrapped and governance tokens

According to AICPA/CIMA’s January 2025 Digital Assets Practice Aid update, NFTs, wrapped tokens, and many governance tokens fall outside the current definition of in-scope crypto assets under ASU 2023-08. For these instruments, entities should apply separate US GAAP analyses and document policies that reflect the assets’ specific rights, obligations, and economic features. The practice aid update also expands guidance on presentation of gains and losses and the layout of disclosures for digital assets.