In December 2023 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-08, titled "Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets." The Update created a new Codification subtopic, 350-60, and changed how companies that hold qualifying crypto assets carry them on the balance sheet and recognize changes in their value. The short version: in-scope crypto assets are now measured at fair value, and the change in that fair value each period flows through net income rather than being deferred.

The change matters because of what it replaced. Before this Update, a company holding bitcoin and similar tokens generally accounted for them as indefinite-lived intangible assets under a cost-less-impairment model. Under that model, the company recorded the asset at cost, wrote it down when its price fell below cost, and was not permitted to write it back up when the price recovered, recognizing a gain only on sale. FASB describes the problem the Update is solving in the standard's summary.

"Specifically, accounting for only the decreases, but not the increases, in the value of crypto assets in the financial statements until they are sold does not provide relevant information that reflects (1) the underlying economics of those assets and (2) an entity's financial position."- FASB, ASU 2023-08, source

What the measurement rule actually says

The operative measurement guidance is concise. Subtopic 350-60-35-1 provides that an entity shall measure crypto assets at fair value in the statement of financial position, and that gains and losses from the remeasurement of crypto assets shall be included in net income. Fair value is determined under the existing fair value framework in Topic 820, which for an actively traded asset such as bitcoin generally points to quoted prices on an exchange. In the basis for conclusions, FASB stated it decided to require fair value measurement "because it will provide investors with more decision-useful information about the value at which crypto assets can be sold and about changes in that value," observing that the predominant way an entity realizes value from a scoped crypto asset is through exchange.

The Update also changes presentation. An entity must present crypto assets measured at fair value separately from other intangible assets in the balance sheet, and must present changes from the remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. In practice, that means a reader of the financial statements can see the crypto position and its period-over-period swing as distinct line items rather than buried inside a general intangibles caption.

Effective date and transition

The Update states that the amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted for both interim and annual financial statements that have not yet been issued. For a calendar-year company, that placed adoption at the start of fiscal 2025. The transition is not retrospective: an entity recognizes the cumulative effect of initially applying the new guidance as an adjustment to the opening balance of retained earnings as of the beginning of the fiscal year of adoption.

That transition mechanic has a visible effect in real filings. A company that adopted the standard at the start of 2025 carries its crypto at fair value going forward, but its pre-adoption results were prepared under the old cost-less-impairment model, so the periods are not directly comparable. Filers that adopted have disclosed exactly this point, noting that results for the adoption year and prior periods are not comparable because the guidance required a cumulative-effect adjustment to opening retained earnings and did not permit retrospective restatement of historical financial statements.

How the standard sits inside existing GAAP

ASU 2023-08 did not invent a new valuation methodology; it routed crypto assets into existing machinery. The fair value itself is measured under Topic 820, the long-standing fair value framework that defines fair value as an exit price and establishes a three-level hierarchy of inputs. For a token with quoted prices on an active exchange, the measurement generally falls high in that hierarchy, using observable market prices rather than modeled estimates. By placing crypto assets in a dedicated subtopic-350-60-within the intangibles area of the Codification, the Board kept the asset's classification as an intangible while carving out its measurement, which is why the balance sheet still groups crypto among intangibles even as it presents the crypto line separately.

The Board's own basis for conclusions explains the reasoning. It observed that the predominant way an entity realizes value from a scoped crypto asset is through exchange, and that such assets are not used in combination with other assets to generate value-characteristics that, in the Board's view, make a current market value more relevant than historical cost. The Update also limits its own reach deliberately: it applies a defined scope test rather than sweeping in every digital asset, and it does not change how an entity accounts for crypto it issues itself or for tokens that convey enforceable claims on other assets. Those design choices keep the fair value model targeted at the holdings where a quoted market price is the most decision-useful number.

For investors and analysts, the consequence is a cleaner read of a crypto position over time. Because the carrying amount is reset to fair value every period and the change is labeled as a distinct remeasurement line, a reader can see both the current value of the holding and the period's contribution to earnings from price movement, without reconstructing the figure from impairment history. The prior model, by contrast, could leave a holding carried far below its market value after a single decline, with no subsequent write-up, obscuring the asset's economic position until a sale crystallized the difference. The new presentation removes that asymmetry.

Two limits are worth stating plainly. First, the Update applies only to crypto assets that meet a defined set of scope criteria; it does not sweep in every digital asset a company might hold, and assets outside the scope continue under their prior accounting. Second, fair value measurement records both gains and losses through net income, which means earnings now move with crypto prices in both directions, a volatility that the prior model muted on the downside and ignored on the upside. What the standard does, on its own terms, is align the reported carrying amount with an observable market value and surface the change each period for investors to read.