ASC 350-60 does not address an issuer’s accounting for crypto assets that it creates or issues. Those assets are outside the scope of ASC 350-60 when they are created or issued by the reporting entity or its related parties. [FASB ASC 350-60]
Issuer-created tokens are generally internally developed intangible assets. When a token has no contractual expiration date or other legal, regulatory, technological, or economic factor that establishes a determinable useful life, its useful life is indeterminate.
ASC 350-30-25-3 requires the costs of internally developing an intangible asset with an indeterminate life to be expensed as incurred. Accordingly, development costs associated with an issuer-created token with an indeterminate useful life should generally be recognized as expense rather than capitalized, unless another area of U.S. GAAP specifically permits capitalization of the particular costs. [FASB ASC 350-30-25-3]
Examples of other intangible assets that may fall within the categories addressed by ASC 350-30-25-3 include:
Not specifically identifiable: internally generated synergies or other benefits that cannot be separated from the business as a whole.
Indeterminate useful life: an issuer-created token for which there is no contractual expiration date or other supportable limit on the period over which it is expected to provide economic benefits.
Inherent in the continuing business: internally generated goodwill or similar benefits arising from the entity’s ongoing operations.
For issuer-created tokens, the second category is particularly relevant. If no supportable limit on the token’s useful life can be identified, the related internal development costs are expensed as incurred under ASC 350-30-25-3.
