Definition. Under US GAAP (ASU 2023-08), the measure for in-scope crypto assets: the price that would be received to sell in an orderly transaction between market participants. Changes go through net income.
What it means
Fair value is an accounting measure, not a tax value. It is the price a company would receive to sell an asset in an orderly transaction between market participants at the measurement date, using the principal market or, if none, the most advantageous market. For bitcoin, that usually means a quoted price on the exchange where the company would normally sell, at the reporting date and time.
Whether a company measures its bitcoin at fair value depends on its accounting framework.
UK GAAP has no rules written specifically for cryptoassets. If a company treats bitcoin as an intangible asset under FRS 102 Section 18, it chooses between the cost model and the revaluation model. Revaluation, which carries the asset at fair value, is only possible where fair value can be determined by reference to an active market, and gains usually go to other comprehensive income rather than profit. From periods beginning on or after 1 January 2026, amendments add a new Section 2A on fair value measurement. Micro-entities using FRS 105 cannot revalue at all: they use historical cost.
Under ASU 2023-08, crypto assets within its scope are measured at fair value each reporting period, with changes recognised in net income. They are presented separately from other intangible assets. The standard is effective for fiscal years beginning after 15 December 2024, so a calendar year company applies it from its 2025 year.
Why it matters for a company
Fair value makes the balance sheet closer to what the bitcoin is worth, but under US GAAP it also makes reported profit move with the price. A board that has not been warned may be surprised by a large unrealised loss in a quiet trading year. Agree the price source, the cut off time and the exchange with the accountant in advance and record them in the policy.
Common mistakes
- Using different price sources at each month end.
- Assuming a fair value gain is taxable or a loss deductible. Tax usually follows disposals.
Related
Sources
Primary sources only. Each link was checked on 9 November 2026. Rules change, so confirm the current version with your adviser.
- FASBASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60)
- FRCFRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland
- FRCFRS 105: The Financial Reporting Standard applicable to the Micro-entities Regime
- DeloitteNeed to know: Amendments to FRS 102, new Section 2A 'Fair Value Measurement'
- ICAEWCan I revalue an intangible asset under FRS 102?
This is general information and education only. It is not financial, investment, tax, accounting, legal or regulatory advice, and it is not a recommendation to buy, sell or hold bitcoin or any other asset. It does not take account of your circumstances or those of your company. You must obtain your own official professional advice to confirm this information is correct before acting on it.
Rules change. This information is correct to our understanding at the last-reviewed date, but it may be incomplete or out of date, and official sources take precedence. Bitcoin is volatile. A company that buys it could lose some or all of the money it puts in.
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