EY Crypto Asset Accounting and Tax Explained

KEY TAKEAWAYS

• Under recent US GAAP updates reflected in EY’s Technical Line, digital assets within the scope of ASC 350-60 are measured at fair value at each reporting period, with changes recognised in net income.
• Stablecoins and NFTs require tailored analysis: stablecoins are often treated as intangible assets with attention to peg stability and redemption features.
• EY’s specialised crypto tax services support compliance with evolving rules, assisting businesses handle income tax reporting, transaction documentation, and regulatory shifts related to digital assets.
• Digital assets are generally treated as property for tax purposes in most jurisdictions, meaning gains or losses from purchaseing, tradeing, or exchanging cryptocurrencies and stablecoins are reportable.
• Institutions and enterprises benefit from EY’s multidisciplinary guidance on tokenization, stablecoins, and custody, enabling better preparation for treasury management, risk controls, and strategic adoption amid growing mainstream acceptance and regulatory clarity.

Digital assets, which include cryptocurrencies, stablecoins, , and other blockchain-based representations of value, are now an significant part of the financial plans of businesses and institutions.

As adoption speeds up, appropriate accounting and tax treatment are still very significant for compliance, risk management, and financial reporting. offers full frameworks through its Technical Line publications and specialized services to deal with these issues. 

The Financial Accounting Standards Board (FASB) and the Securities and platform Commission (SEC) have clarified how to measure and report under US GAAP. At the identical time, tax laws worldwide are changing, with a greater focus on reporting and classification.

This research-based overview uses EY’s authoritative resources to illustrate accounting rules for digital asset holders, unique concerns, and new tax duties. It also shows how EY assists businesses with its specialist .

Accounting for Digital Assets under US GAAP

on accounting for digital assets is primarily for owners. It also discusses specialised entities and operations in emerging markets. The scope includes crypto assets as defined by ASC 350-60, which are intangible assets produced or stored on distributed ledgers using encryption and without a physical form.

Every reporting period, digital assets under ASC 350-60 are measured at fair value. This shows a move toward more open valuation. This fair value method is based on the final FASB advice and replaces older cost-less-impairment models for various crypto assets. Companies must report changes in fair value in their net income, which provides a more up-to-date picture of how much their assets are worth when markets are volatile.

The type of asset and its purpose determine its classification. Under ASC 350, most of them are indefinite-lived intangible assets. However, some arrangements may be considered inventory (for broker-dealers) or financial instruments.

Stablecoins and NFTs get special attention because stablecoins may have unique risks related to peg maintenance and redemption rights. NFTs, on the other hand, are unique and can’t be platformd for other assets, so they often fall under the identical rules as intangible assets but also need to be evaluated for their underlying rights (such as art, collectables, or access tokens).

The rules for presentation and disclosure stress openness. Entities must disclose their major holdings, how they value them, and the risks they face, including cybersecurity, regulatory, and market volatility. The cancelled previous guidance on secureguarding obligations.

This made it easier for platforms that store user funds to report certain things. EY says the guideline is mostly for holders. Still, companies that mine, stake, or issue tokens have to consider other issues, such as how to account for rewards as income or issued tokens as liabilities.

Top Considerations When Using Stablecoins and NFTs

, which are meant to maintain their value through reserves or algorithms, pose unique accounting challenges.

EY notes that some items may be classified as cash equivalents if they are highly liquid and low-risk, but most are considered intangible assets because it’s unclear how they can be redeemed. Risks include currency devaluation, inadequate reserves, and regulatory scrutiny that affects valuation.

NFTs are usually treated as indefinite-lived intangibles because they are unique digital or tokenized physical excellents like art, mementoes, and tickets. When possible, market quotes are used to determine value.

If there are signs of deterioration, testing is needed. EY says NFTs can represent ownership rights, access, or royalties. It’s significant to carefully read the conditions of the contract to make sure they are recognized correctly.

For both, ASC 820 uses Level 1, 2, or 3 classifications to evaluate fair value based on observable inputs from active markets. Companies need to keep an eye out for anything that could affect recoverability, such as outdated technology or a declining market.

EY’s Crypto Tax Services and the Changing Tax Environment

has developed specialised crypto tax services to assist businesses navigate complex compliance requirements. These services assist with income tax reporting, recordkeeping, and staying up to date with changes in the rules for digital assets. As tax rules change, EY specialists assist clients meet their obligations and develop plans.

Most of the time, tax treatment treats cryptocurrencies and stablecoins like property. This means that any gains or losses from sales, platforms, or disposals are subject to income and capital gains tax.

Stablecoins, even though they are less volatile, usually have the identical taxable events as other types of coins, unless they are classed diversely (for example, as currency in restricted situations). 

promise tax benefits, including greater transparency and easier cross-border payments. However, they also raise the question of whether digital currencies should be taxed at all. Global trends show that restrictions are becoming stricter, with greater broker reporting, increased wash-sale concerns, and greater international cooperation through OECD standards. 

‘Changes that are expected to happen in the US for tax year 2025 and beyond include better record-keeping for transactions and possible legislation initiatives that would modify how transactions are recognized and treated. EY stresses the importance of being proactive in planning, including treasury impacts, accounting integration, and compliance processes.

and stablecoin adoption can be excellent for businesses, but they need to do thorough tax research to mitigate their risks.

difficultys and Best Practices

Some of the largegest difficultys are the subjectivity in valuing illiquid assets, the cybersecurity risks that make recovery more hard, and the lack of clear rules that make classification more hard. EY says you should include digital asset operations in your current controls, conduct regular impairment assessments, and use technology to track transactions.

Best practices include working together with teams from diverse fields, such as accounting, tax, and risk. For holders, using fair value consistently makes comparisons easier. Companies should monitor updates from the FASB and the and prepare for additional disclosures.

FAQs

How are digital assets, such as cryptocurrencies, accounted for under US GAAP, according to EY?

They fall under ASC 350-60 as intangible assets measured at fair value each period, with changes in fair value recognized in net income, following FASB’s final guidance.

What special considerations apply to stablecoins in accounting?

Stablecoins are typically treated as intangible assets, with risks around peg maintenance, reserves, and redemption evaluated; they may rarely qualify as cash equivalents if meeting strict liquidity criteria.

How does EY address tax compliance for crypto assets?

EY offers dedicated crypto tax services to navigate reporting, documentation, and evolving rules, assisting with income classification, gains/losses, and preparation for changes in 2025 and future years.

Are NFTs accounted for diversely from fungible cryptocurrencies?

NFTs are generally indefinite-lived intangible assets due to their uniqueness, requiring market-based fair value measurement and impairment testing, with analysis of any associated rights or royalties.

What global tax trends are highlighted for digital assets?

Jurisdictions increasingly treat them as property subject to capital gains tax, with stablecoins and CBDCs promising benefits such as greater transparency. Still, there are ongoing questions about direct taxation and cross-border implications.

References

• : Accounting for digital assets, including crypto assets
• : Tax and Cryptocurrency Services Overview.