{"id":2163,"date":"2022-03-31T15:27:17","date_gmt":"2022-03-31T19:27:17","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=2163"},"modified":"2022-03-31T15:27:17","modified_gmt":"2022-03-31T19:27:17","slug":"sec-staff-accounting-bulletin-121-crypto-asset-accounting-for-platform-operators","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/sec-staff-accounting-bulletin-121-crypto-asset-accounting-for-platform-operators\/","title":{"rendered":"SEC Staff Accounting Bulletin 121 \u2013 Crypto-Asset Accounting for Platform Operators"},"content":{"rendered":"

On March 31, 2022, the SEC staff issued SAB 121<\/a> to address \u201caccounting for entities that have obligations to safeguard crypto-assets held for their platform users.\u201d\u00a0 SAB 121 has been added to Topic 5 in the SAB codification<\/a>.<\/p>\n

The SAB<\/a> starts with this fact set to specify the circumstances in which the SAB would apply:<\/p>\n

Entity A\u2019s\u00a0business includes operating a platform that allows its users to transact in crypto-assets.\u00a0 Entity A also provides a service where it will safeguard the platform users\u2019 crypto-assets,\u00a0including maintaining the cryptographic key information\u00a0necessary to access the crypto-assets. Entity A also maintains internal recordkeeping of the amount of crypto-assets held for the benefit of each platform user. Entity A secures these crypto-assets and protects them from loss or theft, and any failure to do so exposes Entity A to significant risks, including a risk of financial loss. The platform users have the right to request that Entity A transact in the crypto-asset on the user\u2019s behalf (e.g., to sell the crypto-asset and provide the user with the fiat currency (cash) proceeds associated with the sale) or to transfer the crypto-asset to a digital wallet for which Entity A does not maintain the cryptographic key information. However, execution and settlement of transactions involving the platform users\u2019 crypto-assets may depend on actions taken by Entity A.<\/p>\n

As you can read in the SAB<\/a>, given the risks that \u201cEntity A\u201d has taken on in its business, the staff believes that it should record a liability on its balance sheet for the fair value of the crypto-assets it holds for customers.\u00a0 This liability would be measured at fair value at each period end.\u00a0 A corresponding asset would also be recorded and carried at fair value.\u00a0 In addition, the SAB enumerates disclosures the staff believes appropriate in these circumstances.<\/p>\n

Companies should apply this guidance for interim and annual periods ending after June 15, 2022.<\/p>\n

\u00a0As always, your thoughts and comments are welcome!<\/p>\n","protected":false},"excerpt":{"rendered":"

On March 31, 2022, the SEC staff issued SAB 121 to address \u201caccounting for entities that have obligations to safeguard crypto-assets held for their platform users.\u201d\u00a0 SAB 121 has been added to Topic 5 in the SAB codification. The SAB starts with this fact set to specify the circumstances in which the SAB would apply: … Continue reading SEC Staff Accounting Bulletin 121 \u2013 Crypto-Asset Accounting for Platform Operators<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[242],"tags":[],"coauthors":[154],"class_list":["post-2163","post","type-post","status-publish","format-standard","hentry","category-reporting"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/2163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=2163"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/2163\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=2163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=2163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=2163"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=2163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}