NFT Accounting for Companies: Outside ASU 2023-08, Into the Intangible

When US GAAP finally handed crypto a fair-value model in ASU 2023-08, NFTs were left out on purpose: the standard applies to fungible assets, and an NFT is non-fungible by definition. The practical consequence is that a company holding NFTs does not get the headline treatment its fungible tokens now enjoy. NFTs fall back into intangible — or, in some cases, inventory — accounting, carrying all the old cost-less-impairment baggage US GAAP just removed for ordinary crypto. This article works through that for corporate holders specifically: why NFTs are scoped out, how the purpose of holding decides where they land, and why valuing a unique, thinly traded token is the part that actually bites. For the fungible side of the same fork see IAS 38: crypto as an intangible asset, and for income from NFTs you create rather than hold, see NFT royalty income accounting.

The position in brief

• NFTs are outside ASU 2023-08: the standard requires fungibility, and an NFT is non-fungible by definition.
• With no new fair-value model, NFTs follow other guidance — typically an intangible under IAS 38, or inventory under IAS 2 if held for sale.
• Cost less impairment is the common landing point, which means the pre-ASU problem persists for NFTs.
• The purpose of holding forks the treatment: strategic asset, held for sale, or rights-bearing.
• Valuation is genuinely hard, because NFTs are unique, often illiquid, and frequently have no active market for the specific token.
• The area is unsettled. With no NFT-specific standard, the documented classification and valuation judgement is the audit artefact.

Why NFTs are excluded from ASU 2023-08

The scope criteria in ASU 2023-08 require, among other things, that the asset be fungible. An NFT is non-fungible by definition, since each token is unique, so it fails the scope test and sits explicitly outside the new fair-value-through-net-income model (see the ASU 2023-08 scope). The exclusion is deliberate: the fair-value model relies on the kind of observable market that unique tokens generally do not have.

Where NFTs land instead

Excluded from the fungible-crypto model, NFTs follow other applicable guidance, routed by the purpose of holding. It is the same fork as for fungible crypto (IAS 38 vs IAS 2), but without the ASU 2023-08 fair-value override:

The common landing point is an intangible carried at cost less impairment, which means the asymmetric impairment problem that US GAAP removed for fungible crypto still applies to NFTs.

The valuation problem

NFTs are unique and often thinly traded, so there may be no active market for the specific token. That has three consequences:

• impairment testing becomes judgemental, since there is no obvious benchmark to test against;
• any fair-value disclosure is hard to support;
• floor prices and collection averages are not the value of a specific NFT.

The illiquidity is exactly why the fungibility-based fair-value model was not extended to NFTs, and why cost less impairment with documented judgement is where most corporate NFT accounting settles.

Substance over the "NFT" label

Classification follows substance and purpose, not the token type. An NFT that is really an access pass, a claim, or a right has to be analysed for what it conveys rather than booked as a generic collectible. A creator or marketplace holding NFTs for sale is in an inventory analysis, not a strategic-intangible one. The label "NFT" describes the token standard, not the accounting.

Impairment testing in practice

For an NFT held as an intangible under cost-less-impairment, the entity must assess at each reporting date whether there is any indication that the NFT may be impaired. This is harder for NFTs than for fungible crypto because there is no continuous price feed for a unique asset. The indicators an entity typically considers:

Market activity. Has the collection to which this NFT belongs experienced a significant decline in sales volume or average sale price? A collection-level decline is evidence of impairment at the specific-token level, though it is not a direct measurement. The entity must document the comparison against the specific token's carrying value, not just note a market decline in general.

Liquidity. Has the number of active listings and sales in the collection dropped to near-zero? An NFT in a collection with no recent trades is effectively unmarketable, which is a strong indicator that the carrying value (even if low) may not be recoverable. The IASB's guidance on assets with no active market (IAS 36) requires estimation of recoverable amount using the best available information.

Rights and utility changes. Has the underlying utility or right conveyed by the NFT changed materially — for example, a game that issued NFT items has closed, or a platform that backed membership NFTs has changed its terms? A change in the asset's utility is a direct impairment indicator independent of market price.

Creator or issuer failure. For corporate strategy NFTs or access NFTs tied to a specific counterparty, the failure or cessation of operations of the issuer is a strong impairment indicator. The NFT may retain secondary-market value as a collectible but has lost its functional value.

Disclosure considerations

Even where no NFT-specific standard applies, entities should consider disclosing:

• Classification basis — why an NFT is recorded as an intangible vs inventory, and the key assumptions.
• Valuation method for impairment — the approach used to estimate recoverable amount or fair value for disclosure purposes, including why the collection floor was or was not used.
• Carrying value and movement — additions (at cost, including gas/acquisition fees), disposals (gain/loss), impairments recognised.
• Restrictions or encumbrances — if an NFT has been pledged as collateral or is subject to licensing restrictions.

Practical guidance

1. Do not apply ASU 2023-08 to NFTs; they fail the fungibility scope test.
2. Route by purpose of holding: strategic intangible, held-for-sale inventory, or rights-bearing.
3. Expect cost less impairment for held NFTs, since the asymmetric model persists here.
4. Document the valuation judgement against the specific token's value, not floor or collection averages.
5. Analyse rights-bearing NFTs for what they convey rather than treating them as collectibles.
6. Record the classification and valuation judgement; in an unsettled area, that record is the audit-critical artefact.

Choosing and configuring a tool

The structural risk with NFTs is a tool that quietly funnels them into the same fair-value flow it uses for fungible crypto, which is wrong under both US GAAP and IFRS. Cryptio and Bitwave both inventory NFTs separately and support a cost-less-impairment intangible basis, or an inventory basis where the NFTs are held for sale. Before you commit, confirm the tool:

• keeps NFTs out of the fungible-crypto fair-value pipeline, so an NFT line is never remeasured to a floor price as if ASU 2023-08 applied;
• supports a per-NFT, cost-less-impairment basis (or an inventory basis) rather than forcing a single portfolio valuation method;
• lets you attach the impairment and valuation evidence to the specific token — the collection floor used or rejected, the utility or issuer changes considered — so the judgement is reconstructable;
• can record acquisition cost inclusive of gas and minting fees, and track disposals with gain or loss against that cost.

Treating an NFT like a fungible token is the error that everything else follows from; the rest is making the per-token judgement defensible.

Where Wag3s fits

Wag3s Ledger inventories NFTs separately from fungible crypto, applies an intangible cost-less-impairment basis (or an inventory basis where held for sale), and keeps the per-NFT valuation and impairment judgement on the audit trail rather than defaulting a rights-bearing NFT to a collectible line. NFT accounting is unsettled and fact-specific, so Wag3s is built to assemble the classification and valuation evidence the auditor needs to review, not to substitute for that review. See the Ledger product page and the Wag3s for accountants page.

Further reading

• FASB ASU 2023-08: Fair-Value Crypto Accounting
• IAS 38: Crypto as an Intangible Asset
• NFT Royalty Income Accounting
• Crypto Impairment vs Fair Value Accounting
• Crypto Held as Inventory (IAS 2)
• Governance Token Accounting
• Crypto Audit Trail and Piste d'Audit Fiable

Sources

• FASB — ASU 2023-08 (Subtopic 350-60): the scope is limited to crypto assets that are fungible, among other criteria, so non-fungible tokens are excluded from the fair-value-through-net-income model.
• IFRS — IAS 38 Intangible Assets and IAS 2 Inventories: the two routes NFTs fall into depending on the purpose of holding — a cost-less-impairment intangible, or held-for-sale inventory.
• There is no NFT-specific standard. Unique, often illiquid assets produce judgemental impairment and valuation conclusions, and practice remains unsettled, so the documented judgement is the artefact that matters.