News

As different forms of crypto tokenization enter the marketplace and intersect with real-world physical assets, getting the accounting and reporting correct will only become more important.

There has been no shortage of conversation and analysis around the various trends and developments as it connects to how the crypto economy and existing fiat economy can become better integrated. Decentralized finance (DeFi), non-fungible tokens (NFTs), and the overall trend to try and embed digital assets into a blockchain are trends that continue virtually unabated. An important issue that can be overlooked in the excitement (and potential frothiness) in these markets is the fact that, as these new crypto applications develop and expand, is that new and complicated questions are being raised with regards to the accounting and reporting of these cryptoassets.

Accounting and financial reporting, not always the hottest or most buzzworthy of topics, continues to become complicated and generate numerous unanswered questions. Setting aside the “usual” accounting issues with regards to cryptoassets – valuation, accounting standards, tax issues – the rise of NFTs and DeFi continue to create new and more nuanced questions. This does not even touch on the multitude of issues that need to be understood and addressed by market participants as they pertain to smart contracts, a blockchain-enabled method of automating certain parts of certain transactions.