CECL allowance for crypto receivables

Accounting for current expected credit losses on tokens receivable from contracts with customers

The Current Expected Credit Losses (CECL) standard (ASC 326) excludes non-financial receivables from its scope. Consequently, some companies assume that CECL does not apply to cryptocurrency receivables outstanding from customers, even if the credit risk of such receivables is significant. However, this conclusion violates the guidance provided in ASC 606-10-45-3, which requires the impairment guidance of ASC 326 to be applied to all contract assets, including non-financial assets. Therefore, the provision for current expected credit loss is required, at least for those cryptocurrency receivables that arise from arrangements in the scope of ASC 606 (i.e., any enforceable contract with a customer).