A crypto month-end close, step by step
A ten-step close for digital assets: completeness, period-end pricing, lots, remeasurement or impairment, reconciliation and sign-off.
If you hold crypto on the balance sheet, your month-end close needs a few steps a bank-and-cards close does not: proving the wallet list is complete, pricing a market that never closes, and tying chain data back to the ledger. The checklist below puts them in an order that avoids rework.
It is a practical sequence, not a standard. The accounting requirements it points to come from your framework (US GAAP or IFRS) and your auditor's view of your facts.
The checklist
| Step | What you do | Evidence to keep |
|---|---|---|
| 1. Freeze the wallet list | Confirm every wallet, exchange account and custodian account the entity controls, including ones opened or closed this month. | Signed wallet register with owner, purpose and approval. |
| 2. Sync to cut-off | Pull all activity up to your documented cut-off time for each address and account. | Export date, source and cut-off used. |
| 3. Completeness checks | Compare transaction counts and closing balances per source; look for gaps, duplicates and unknown addresses. | Exception list with resolution notes. |
| 4. Period-end prices | Price each holding at the cut-off from the market you treat as principal. | Price source, timestamp and principal-market memo. |
| 5. Classify and clear the review queue | Label each transaction (trade, transfer, fee, income, internal move) and resolve flagged items. | Review log showing who decided and why. |
| 6. Lots and realized gains | Run cost-basis relief under your elected method and lock the period. | Lot report and disposals schedule. |
| 7. Remeasure or test for impairment | Fair value under ASU 2023-08, or cost less impairment (or revaluation) under IFRS. | Remeasurement calculation by asset. |
| 8. Reconcile | Tie on-chain and custodian balances to the subledger and the subledger to the general ledger. | Signed reconciliation with reconciling items. |
| 9. Post journals | Post summarized or detailed entries with links back to source transactions. | Journal listing with preparer and approver. |
| 10. Review, sign off, retain | Controller review, flux analysis, sign-off; archive the pack. | Close binder kept for your retention period. |
Steps 1 to 3: completeness before anything else
PCAOB staff have reported audit deficiencies where firms did not test the reliability of wallet downloads and outside data feeds used to support existence and completeness [5]. They also note that an entity may leave out assets at some addresses or at exchanges and custodians [5]. Start with a controlled wallet list so that a missing address cannot quietly drop out of every later step.
COSO's blockchain paper highlights controls over the movement of information from the chain into the general ledger, and notes that activity recorded off-chain, such as trades inside an exchange, needs its own reconciliation to on-chain records [6].
Step 4: pricing at period end
Under ASC 820 there is a presumption that the market you normally transact in is your principal market unless evidence says otherwise, and Deloitte notes that a price aggregator is not itself a market [1]. Crypto trades around the clock, so you have to pick a measurement time. PwC's view is that the estimate should generally use the last trade before midnight in the reporting entity's time zone, and that no blockage discount should be applied for the size of a holding [2]. Whatever you choose, write it down and apply it the same way every period.
Steps 6 and 7: lots, then measurement
Entities applying ASU 2023-08 must disclose the cost-basis method they use, such as FIFO, specific identification or average cost, and give an annual roll-forward of holdings that separates additions, disposals with realized gains and losses, and remeasurement [1]. That means the lot engine and the fair value calculation are separate steps, and both feed the disclosure.
Under IFRS, the IFRS Interpretations Committee concluded that cryptocurrencies are inventory under IAS 2 when held for sale in the ordinary course of business, and intangible assets under IAS 38 otherwise [3]. IAS 38 lets you choose a cost model or a revaluation model, but revaluation requires an active market, and increases generally go to other comprehensive income [4]. Under the cost model, impairment is assessed under IAS 36 [4].
| Account | Debit | Credit |
|---|---|---|
| US GAAP, ASU 2023-08: month-end remeasurement of 10 ETH Carrying amount 30,000.00; price at cut-off 3,250.00; fair value 32,500.00; gain 2,500.00 | ||
| Digital assets — ETH | 2,500.00 | |
| Gain on remeasurement of digital assets | 2,500.00 | |
| IFRS, IAS 38 cost model: impairment of 100 SOL Carrying amount 20,000.00; recoverable amount assessed at 15,000.00; impairment 5,000.00 | ||
| Impairment loss — digital assets | 5,000.00 | |
| Accumulated impairment — SOL | 5,000.00 | |
Steps 8 to 10: reconcile, post, sign off
COSO suggests separating the people who can authorize on-chain transactions, meaning those with key access, from those who record entries in the general ledger [6]. Build that into the close: the preparer of the reconciliation should not be the person who signs transactions.
Keep records good enough to support your tax positions. The IRS says records should be sufficient to establish return positions, including fair market value [7], and that specific identification of units in your own wallets must be documented no later than the transaction date [7]. HMRC's cryptoassets manual lists the details it expects for each transaction, including the token type, date, number of units, sterling value and running holding, and puts the onus on the taxpayer because exchanges may not keep records [8].
What to do
- Write a one-page close calendar that assigns each of the ten steps an owner and a working day.
- Document your cut-off time, time zone and principal-market assessment, and reuse them every month.
- Do not run lots or remeasurement until completeness exceptions are cleared or explicitly carried as reconciling items.
- Keep the review queue log; it is the evidence behind your classifications.
- Separate key holders from journal preparers and reviewers.
- Agree the close pack contents with your auditor before year end, not after.
Sources
- Frequently Asked Questions About Implementation of the FASB's New Crypto Assets Standard (Heads Up, Vol. 31, Issue 7) (Deloitte)
- Crypto assets guide, 4.1 Fair value (PwC Viewpoint)
- Holdings of Cryptocurrencies, June 2019 (agenda decision) (IFRS Interpretations Committee)
- IAS 38 Intangible Assets (IFRS Foundation)
- Spotlight: Inspection Observations Related to Public Company Audits Involving Crypto Assets (PCAOB staff)
- Blockchain and Internal Control: The COSO Perspective (COSO)
- Frequently asked questions on digital asset transactions (IRS)
- CRYPTO10400 - Introduction to cryptoassets: record keeping (HMRC)
General information for finance teams, current as of publication. Not legal, tax or accounting advice.