How to Sell Crypto as a Corporation: Accounting Treatment,…
By Damilola Esebame
AI summary of the source article
FASB Accounting Standards Update 2023-08 codified under ASC 350-60 requires corporations to account for qualifying crypto holdings at fair value rather than historical cost minus impairment. Mark-to-market gains and losses are recognized directly in net income, affecting fungible assets like Bitcoin and Ethereum while excluding NFTs and stablecoins. For federal taxes, the IRS treats virtual currency as property, meaning every corporate sale or swap triggers a taxable event reported on Form 1120. Additionally, the SEC issued SAB 122 in January 2025 to rescind SAB 121, easing balance sheet liabilities that previously discouraged banks from offering crypto custody.
Why it matters
The accounting shift eliminates the downward-only impairment bias on corporate balance sheets, allowing firms to reflect market appreciation while navigating quarterly earnings volatility and strict IRS reporting.
Key facts
- FASB ASU 2023-08 mandates fair-value measurement for qualifying corporate crypto assets for fiscal years beginning after December 15, 2024.
- The IRS treats virtual currency as property, requiring corporate sales, exchanges, and token swaps to be reported on Form 1120 Schedule D.
- The SEC issued SAB 122 on January 23, 2025, rescinding SAB 121's balance-sheet safeguarding liability requirements for crypto custodians.