Wait, Do NFTs Count in Reporting Crypto?

While ASC 350-60 brought long-awaited clarity for cryptocurrency accounting, it didn't cover everything. In particular, it left out non-fungible tokens, or NFTs. For businesses that hold NFTs as part of their crypto activity, this exclusion means going back to the old framework. And because NFTs operate very differently from fungible tokens like Bitcoin or Ethereum, the accounting treatment reflects that complexity.

How Do Companies Even Control NFTs?

At first glance, NFTs may seem like collectibles for crypto-enthusiasts - and often, they are. But some companies hold NFTs as part of broader Web3 strategies or marketing initiatives.

A media company, for example, might acquire NFTs linked to entertainment IPs for digital rights or brand partnerships. Retailers may experiment with loyalty programs or digital product drops, where ownership is verified through NFTs.

In other cases, firms may simply acquire them as speculative assets, much like how they might invest in high-risk stocks or emerging tech. While still a niche play, business involvement in NFTs is real, and so is the need for proper accounting treatment. Unified Global has worked with forward-looking businesses to ensure these digital experiments are matched with financial discipline.

NFTs Don't Qualify Under ASC 350-60

To fall under ASC 350-60, a digital asset must be fungible – one unit must be identical and interchangeable with another.

FTs, by definition, are unique. Each represents a one-of-a-kind digital item, often tied to digital art, collectibles, or even smart contract access rights. Because their value isn't standardized and can't be swapped one-to-one, they don't meet the standard's criteria.

As a result, they remain under the umbrella of ASC 350, which governs intangible assets - the same standard that was used for all crypto before ASC 350-60 existed.

What That Means for Financial Reporting

For companies, the accounting treatment of NFTs under ASC 350 is more limited. NFTs must be recorded at cost, and if their value declines, an impairment must be recognized.

The problem? If the market value rises again, that gain can't be reported; the impairment is permanent unless the NFT is sold. That's a big deal for companies holding high-value or speculative NFTs, as the books might not reflect real market conditions. This is especially tricky when dealing with NFTs that fluctuate based on hype, rarity, or media exposure, like limited-edition collectibles or branded partnerships.

"Until a new accounting framework is developed specifically for NFTs - which may eventually happen and which Unified Global will certainly stay ahead of - they'll need to be handled like any other intangible asset."

The Case for Conservative Valuation

Given the volatility and subjective pricing of NFTs, companies should approach valuation with caution. A Bored Ape NFT bought during its hype's peak may no longer carry the same market appeal or liquidity. Businesses should document the basis for valuations carefully, monitor for impairment triggers, and ensure transparent disclosures.

In 2024 alone, the NFT trading volume hit $3.9 billion in Q1, a 50% year-over-year increase, signaling a rebound - but also heightened risk. Market projections estimate the NFT sector could grow to $212 billion by 2033, making it one of the fastest-evolving digital asset classes today.

Until a new accounting framework is developed specifically for NFTs - which may eventually happen and which Unified Global will certainly stay ahead of - they'll need to be handled like any other intangible asset with irregular market behavior.

NFTs might be innovative, but for now, the accounting rules aren't. Without a dedicated standard, companies must treat them like any other intangible asset - even if their market value tells a different story. That makes clear documentation and conservative reporting the smartest path forward in 2025.

As more businesses experiment with NFTs, the burden of accurate and transparent reporting grows heavier. Missteps in valuation, impairment, or classification could quickly spiral into audit risks or reputational damage. With clients exposed to these volatile assets, Unified Global provides valuation advisory that's conservative, defensible, and customized for fast-moving market segments.

Our technical accounting team specializes in crypto and digital asset compliance, helping businesses strike the right balance between innovation and integrity. Whether you're holding NFTs for branding, investment, or product strategy, our experts can help you stay compliant and investor-ready at every turn.