Thu, Jul 16, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Cryptocurrencies and digital assets create fair value headaches for auditors

Thursday, July 25, 2019

Bailey McCann, Opalesque New York:

Cryptocurrencies and other digital assets raise unique valuation questions for auditors. Digital assets are the only investments that truly trade 24/7/365 and also lack a clear principle market which makes it difficult for auditors to establish a consistent fair value. Delegates at the recent Opalesque Crypto Asset Pricing & Valuation Roundtable say that the industry will have to provide answers to valuation questions if digital assets are to be adopted for widespread use and as investments.

"We all know that from time to time there are pricing inconsistencies across these markets," says Joshua Lefcowitz, Partner-in-Charge, Valuation Services at accounting firm Cohen & Company. "If we are talking about fair value measurements for audited financial statements, how do you price these actively traded or liquid assets and establish consistency across the industry?"

Lefcowitz notes that often times individual clients will consider certain exchanges the "principal market" because they have consistently higher valuations listed or they are easier to use. But from an accounting perspective, that's a tough sell. Auditors will want to see the principal market defined as the primary market for a digital asset not just whatever exchange an investment fund likes best. Creating standardization around principal markets for individual digital asset classes will make it easier for auditors to convert the value of investment portfolios into US ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Satori Capital buys into hedge fund manager Mountain Cove Capital Management[more]

    Laxman Pai, Opalesque Asia: Dallas-based alternatives manager founded on the principles of conscious capitalism, Satori Capital has agreed to back compatriot investment firm Mountain Cove Capital Management. Satori, a multi-strategy firm with more than $1 billion in assets under management, co

  2. SEC proposes to amend Form 13F[more]

    B. G., Opalesque Geneva: The Securities and Exchange Commission (SEC) said on Friday that it had proposed to amend Form 13F - for the first time in more than 40 years. The proposal will update the reporting threshold (currently at $100m) for institutional investment managers and make other change

  3. News Briefs: An amateur investor turned $15,000 into $1m then lost it all, the latest cautionary tale in the day-trading frenzy, SoftBank-Backed Beike Zhaofang Aims to Raise $3bn in U.S. IPO[more]

    An amateur investor turned $15,000 into $1m then lost it all, the latest cautionary tale in the day-trading frenzy From Business Insider: Robinhood-user Richard Dobatse said he turned $15,000 into $1 million, and then lost everything. He told the New York Times: "They make it so easy fo

  4. PE/VC: Could this new metric upend private equity compensation?, Venture funding remains elusive for Black tech entrepreneurs in the US, Fintech to drive biggest VC exits over next five years, Second-quarter VC investing totals appear lackluster[more]

    Could this new metric upend private equity compensation? From Institutional Investor: A secondaries investor and public pension fund are publishing what they say is the first methodology for calculating the dollar value of excess returns generated by private market investments. The

  5. Activists: Effissimo tells Toshiba that shareholders make good directors, Japan activist calls in SPV cavalry for small-cap attacks[more]

    Effissimo tells Toshiba that shareholders make good directors From Reuters: Effissimo Capital Management, which wants to install three directors on Toshiba Corp's board, told the Japanese conglomerate's directors that shareholders make good board members because they are invested in the