This Financial Reporting Alert discusses the SEC’s recently issued Staff Accounting Bulletin (SAB) No. 121. The new SAB (1) provides the SEC staff’s view that it would be appropriate for an entity that has an obligation to safeguard crypto-assets held for platform users to record a liability and corresponding asset on its balance sheet at the fair value of the crypto-assets and (2) adds Section FF to SAB Topic 5, which includes “interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for their platform users.”

Updated 28 July 2022: This update discusses the SEC’s Staff Accounting Bulletin No. 121 (released on 31 March 31 2022) and has been updated to reflect recent discussions the AICPA’s Digital Assets Working Group has had with the SEC staff as well as updated Q&As in the AICPA Practice Aid Accounting for and Auditing of Digital Assets.

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