Fairly Valuing Cryptocurrency Assets: A Case Study

Abstract

Cryptocurrency represents the emergence of a new asset class in accounting. This case helps students to think through the challenges associated with accounting for this unique asset by having them play the role of an assistant controller who is tasked with assigning the correct valuation for a recently purchased cryptocurrency asset. By applying the guidelines of the new cryptocurrency standard, Accounting Standards Update No. 2023-08, to the case scenario, students deepen their understanding of fair value accounting, which is often a challenging topic for students to master. Through case analysis, students enhance their knowledge of the accounting regulations pertaining to cryptocurrency, gain the ability to articulate what makes this asset class unique, and come to understand some of the potential ethical issues that could arise when approaching cryptocurrency valuation. Data gathered from pre- and post-tests demonstrate that the case was useful in improving students’ understanding of fair value accounting and how to apply accounting standards in the valuation of cryptocurrency. Furthermore, survey data show students found the case to be a valuable learning tool that increased their awareness of the challenges associated with valuing this distinct asset class.