Start with the applicable accounting guidance

In the United States, FASB Accounting Standards Update 2023-08 applies to certain crypto assets that meet the standard's scope criteria. For entities within its scope, the guidance requires those assets to be measured at fair value at each reporting date, with changes in fair value recognized in net income.

The standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption was permitted. Whether a particular asset, entity, or transaction is in scope requires analysis under the complete guidance rather than a label such as “bitcoin treasury.”

Presentation and disclosures

ASU 2023-08 includes presentation and disclosure requirements in addition to fair-value measurement. In-scope crypto assets and related fair-value changes are presented separately from other intangible assets and changes in their carrying amounts. Required disclosures include information about significant holdings, contractual sale restrictions, and changes in holdings during the reporting period.

The exact disclosures and their timing depend on the reporting period and the entity's facts. Finance teams should use the current FASB codification and their accounting advisers when preparing financial statements.

Book treatment and tax treatment are separate

IRS Notice 2014-21 states that virtual currency is treated as property for U.S. federal tax purposes. A sale, exchange, or use of bitcoin can therefore create a taxable gain or loss based on the difference between the disposition value and the taxpayer's adjusted basis. Fair-value changes recognized in financial statements do not, by themselves, determine the timing or amount of taxable income.

Differences between financial-reporting amounts and tax basis may create deferred-tax consequences, but the result depends on the entity, jurisdiction, transaction history, and other facts. Businesses should obtain advice from a qualified CPA or tax professional.

Records a business should retain

• Trade date, settlement date, quantity, and transaction identifiers.
• Purchase price, fees, and the source used for fair-value measurements.
• Wallet, custodian, exchange, and account records that support ownership and control.
• Disposition proceeds and the cost-basis method applied.
• Journal entries, reconciliations, approvals, and supporting statements.

A consistent subledger and reconciliation process helps the general ledger, financial statements, and tax workpapers trace back to the same source activity.

Authoritative starting points

• FASB ASU 2023-08: Accounting for and Disclosure of Crypto Assets
• IRS Notice 2014-21
• IRS digital-assets guidance