Crypto Fair Value Accounting: 4 Situations and Who Fits Each

Crypto Fair Value Accounting: 4 Situations and Who Fits Each

Crypto fair value accounting means a company that holds in-scope crypto assets reports them at fair value on the balance sheet and runs the changes through net income each period. A rise shows up as income and a drop as a loss, whether or not you sold anything, and the tax return tells a different story.

This post sorts four situations by how a company came to hold crypto. Crypto Tax Made Easy, a New Jersey digital asset tax firm, fits where the question is tax lots and basis. Iota Finance, a Florida accounting, tax and fractional CFO firm, fits where the question is monthly books for a startup. Every firm named is a vetted Sam's List member. The firms written up below are paying members of our featured program, and payment does not buy the language we use or its reviews. How we picked is at the end.

What ASU 2023-08 Changed for Crypto Fair Value Accounting

ASU 2023-08 is the FASB update that moved in-scope crypto assets to fair value, with changes reported in net income. It applies to fiscal years beginning after December 15, 2024, and early adoption was allowed. Before it, many companies carried crypto at cost less impairment.

Scope is the first question, not the last. The update covers assets that meet a set of criteria, including that they are fungible, sit on a blockchain and are secured by cryptography, and that they are not created by the company or a related party. A token your company issued is generally outside it, so do not assume every token you hold is covered.

Two sets of numbers follow. Book fair value moves every period, while tax basis generally stays at what you paid until you dispose of the asset. Reconciling the two is the recurring work below.

The limitation: this is a general summary, and neither firm below is described on its profile as an audit firm.

Situation 1: Crypto Fair Value Accounting When You Are Paid in Coin

A customer pays in coin, and some of it sits in a wallet. Revenue is generally recorded at the value when you receive it, and the balance is then remeasured each period you hold it, with the change going through net income. For tax, the value at receipt is generally income and becomes your basis, so you need a record of each receipt: date, amount and value used.

Crypto Tax Made Easy may fit if the open question is the lot-by-lot record and the basis. Iota Finance may fit if you also need the monthly entries booked.

The limitation: Crypto Tax Made Easy's profile centers on crypto investors, so ask whether it works with operating businesses.

Situation 2: Crypto Accounting for Startups With a Token Treasury

Some startups keep part of their cash in crypto or hold tokens received in a deal. Fair value swings flow through net income, so a profitable quarter can turn into a loss on a price move, and investors will ask what is operating and what is revaluation. Pull fair value from the same source at each close and keep the support. Keep tax basis by lot separately, because book fair value does not become your basis.

Iota Finance may fit here. Its live profile describes monthly accounting, tax and fractional CFO for small businesses, startups and entrepreneurs. Crypto Tax Made Easy may fit alongside it for the tax lots.

The limitation: Iota's profile lists minimums of $200,000 in income, $500,000 in revenue and $500,000 raised, so an earlier-stage company may fall outside them. Neither profile mentions ASU 2023-08, so ask each how it has handled it.

Situation 3: The Business Accepts Crypto and Converts It at Once

Some businesses take crypto at checkout and convert it the same day through a processor. Fair value matters least here because little is held. Revenue is generally recorded at the value when received, and the conversion usually produces a small gain or loss. Small is not zero, though: hundreds of daily transactions are hundreds of dispositions, and the processor's report may show dollars without lot detail.

Iota Finance may fit if the aim is clean month-end reconciliation of processor reports to the books. Crypto Tax Made Easy may fit if the processor leaves gaps in the basis record and someone must rebuild it.

The limitation: whether a processor reports gains correctly depends on the processor and your setup. Neither profile says it integrates with a specific payment processor, so ask which reports it works from.

Situation 4: Founder-Held Tokens Are Contributed to the Company

A founder who bought tokens years ago contributes them to the new company for equity. The company needs a starting value for the books and a basis for tax, and the two can differ. How the contribution is treated depends on the entity type and the structure of the transfer, so this post does not describe the rules. Have a CPA review it before it happens, not after the books are open.

Crypto Tax Made Easy may fit for reconstructing the founder's cost basis and holding period from wallet and exchange history. Iota Finance may fit for recording the contribution in the company's books and keeping fair value going afterward.

The limitation: a missing history cannot always be rebuilt, and then the basis may be uncertain.

Where Crypto Tax Made Easy Fits on Crypto Fair Value Accounting

Crypto Tax Made Easy is based in Little Silver, NJ, founded in 2021, with six employees, and serves clients nationwide. It lists Cryptocurrency Investors as a specialty and lists no minimums.

Crypto Tax Made Easy has 6 verified client reviews on Sam's List. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Crypto Tax Made Easy is a paying member of our featured program, and payment does not buy its reviews. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: a count of 6 is a small sample, and the profile is investor-focused, so confirm it handles company books.

Where Iota Finance Fits

Iota Finance is a Florida firm, founded in 2022, with seven employees, and serves clients nationwide. Its live profile names Igor Tutelman CPA as Managing Partner and lists Cryptocurrency Investors, Digital Nomads and Equity Compensation as specialties.

Iota Finance has 14 verified client reviews on Sam's List. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Iota Finance is a paying member of our featured program, and payment does not buy its reviews. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: the minimums of $200,000 in income and $500,000 in revenue may exclude smaller companies, so ask whether it has handled crypto at fair value.

Frequently Asked Questions

What is ASU 2023-08?

It is the FASB update requiring in-scope crypto assets to be measured at fair value, with changes in net income. It applies to fiscal years beginning after December 15, 2024, and early adoption was allowed. Scope turns on criteria, so confirm with your CPA that your tokens qualify.

Does crypto fair value accounting change what I owe in tax?

Generally no. Book fair value and tax basis are separate, and for most companies tax is generally triggered by a sale or other disposal, not by a price move. That is why you keep two records and reconcile them. Confirm your treatment with a CPA.

Do startups have to use fair value for crypto?

If the crypto is in scope and the company reports under US GAAP, generally yes. A company that does not prepare GAAP statements may not face the requirement. Ask your CPA which framework you use and whether your tokens meet the scope criteria.

Before the next close, list every wallet the company uses and how each balance is priced. You can browse accountants on Sam's List, including the firms above, and ask how each would reconcile that list to the books.

How We Picked These Firms

You should be able to check our work, so here is how this post was built.

The pool. We wrote up two vetted Sam's List members from our featured program: one with a crypto tax focus and one describing monthly accounting, tax and fractional CFO for startups. This is not a survey of every accountant who handles crypto.

How it is organized. The four situations are ordered by how a company comes to hold crypto, not by firm quality, and the firms are not ranked. Each firm is matched to the situations its live profile most closely describes.

What review counts mean here. We cite each firm's verified review count and its date from its profile. A count does not measure technical quality.

What payment does and does not buy. Listing on Sam's List is free, and so is being named in this article. The firms written up here are paying members of our featured program, which is why they get a write-up. What payment does not buy is the language we use about a firm, its review count, or a promise that it fits you.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.