Exploring the exclusion of NFTs and other digital assets from FASB’s new definition of crypto assets

Abstract

This paper examines the Financial Accounting Standards Board’s (FASB) recent changes to define crypto assets, focusing on why non-fungible tokens (NFTs), utility tokens and asset-backed tokens (ABTs) were not included. By examining the core features of these excluded assets, the research unpacks the reasoning behind their omission. The absence of these assets from the standard definition creates challenges for financial institutions. Without clear accounting guidance, companies face uncertainty in valuation, liquidity risk and difficulty meeting compliance requirements. Risk managers are left guessing how to assess and report these holdings. This has an impact on everything from disclosures to capital planning. The findings highlight a critical need for accounting standards that keep pace with the complexity and growth of digital assets. Institutions may misprice assets, misjudge exposure and fall short of regulatory expectations without up-to-date guidance. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.