The Statement of Digital Assets White Paper
The Statement of Digital Assets is a standardized reporting approach that clarifies an organization’s digital asset holdings.
The Statement of Digital Assets provides a bridge between Generally Accepted Accounting Principles (GAAP) based balance sheet reporting and the value represented on-chain.
Taken with a firm’s fiat holdings and select other assets, the Statement of Digital Assets helps present a complete picture of a firm’s liquidity.
The Statement of Digital Assets
Executive Summary
The Statement of Digital Assets is a standardized report that clarifies an organization’s digital asset holdings, providing a bridge between Generally Accepted Accounting Principles (GAAP) based balance sheet reporting and the value represented on-chain. SoDA provides detailed support to the digital asset balance sheet entries by listing every wallet and asset combination (Wallet/Asset Pair) along with business use or purpose. Fair market value is also calculated to provide a more rational sense of liquidity. Taken with a company’s fiat holdings and select other assets, SoDA attempts to present a complete picture of a company's digital asset liquidity.
The ultimate goal of SoDA is to provide a lasting and transparent bridge between accurate GAAP reporting of digital assets and the details from multiple wallets, centralized exchanges, and other cryptographically-based ownership and/or custody arrangements. The first use case was delivering a full liquidity picture for managers of and investors in growth stage businesses with digital assets on their balance sheet. Additional beneficiaries now include auditors, tax planners, regulators, analysts, and many more direct and indirect stakeholders.
A balance sheet exists to report what a business owns (assets), what it owes (liabilities) and what the ownership or equity in the business is. GAAP is the financial reporting language of business in the United States, unfortunately existing reporting standards for businesses interacting with digital assets can make the balance sheet opaque. Current GAAP reporting for recording digital assets “breaks” several core purposes of a balance sheet – primarily understanding and assessing liquidity. The balance sheet should tell the complete financial story for an entity but unfortunately for those that hold and transact in digital assets, it does not.
Recent FASB guidance requires fair market value reporting of select digital assets, however the new rules are not complete as NFTs (non-fungible tokens), native tokens (tokens created or issued by the reporting entity), select tokens representing real world assets (RWAs), and wrapped tokens are excluded. These excluded digital assets continue to be defined as indefinite-lived intangible assets that necessitates the valuation at the lower of cost or impaired value (“LOCOM” or “BV”) and can only be marked down, never marked to market. This range of treatments complicates balance sheet reporting, by reporting significantly different valuation methodologies alongside one another. Further complicating matters is the balance sheet reporting of stablecoins, essentially adding a third distinct type of digital asset that should be broken out in the same context. This is essentially comparing Apples (crypto @ FV) vs. Oranges (crypto @ LOCOM) vs. Bananas (stablecoins).
At the highest level, this challenges the operation of digital asset-based businesses as questions persist regarding operating runway, tax liability, and fully understanding a companies’ digital asset treasury. It also makes it difficult to assess, and nearly impossible to report, a firm’s true liquidity to analysts, investors, regulators, and auditors. By reporting at the wallet/asset level and providing the corresponding FV and LOCOM, SoDA provides all the backup for the digital asset balance sheet entries and in addition to providing better visibility into the aforementioned operating metrics.
The SoDA International Expansion Paper
This paper explores the current reporting standards of digital assets across IFRS, Canadian AcSB, Swiss Code of Obligation, and other regimes.
The SoDA International Expansion Paper provides an in-depth technical review of current accounting treatments for digital assets under a number of major international standards.
It also includes a comparative analysis, recent regulatory developments, and the gaps that a SoDA standard can fill internationally.
The SoDA International Expansion Paper
Executive Summary
Digital assets like cryptocurrencies and tokenized real-world assets have exploded in usage, challenging traditional accounting standards across jurisdictions. Financial reporting regimes, from U.S. GAAP to International Financial Reporting Standards (IFRS) and various national standards, struggle to consistently classify and value these new assets, resulting in fragmented practices.
The Statement of Digital Assets (SoDA) framework primarily emerged - as a form of best practice - to bridge these gaps. Originally developed to address U.S. GAAP’s limitations for crypto (e.g., restrictive intangible asset treatment), SoDA demonstrates transformative potential as a universal reporting standard for digital assets across IFRS, Canadian AcSB, Swiss Code of Obligation, and other regimes.2 By organizing holdings into “wallet-asset pairs” with standardized fields (asset type, quantity, cost basis, and fair value), SoDA enables apples-to-apples comparisons of crypto balances across borders. In effect, SoDA serves as a common language for digital asset reporting, mitigating cross-jurisdiction inconsistencies.
Moreover, each major international framework has taken a somewhat unique approach to digital asset accounting3, resulting in varying classification and measurement practices. The following lays the groundwork for how SoDA can harmonize global reporting, reduce compliance costs, and improve transparency. The following paper provides an in-depth technical review of current accounting treatments for digital assets under major international standards, followed by a comparative analysis, recent regulatory developments, and the gaps that a SoDA standard can fill internationally.