RFS supports crypto-native and Web3 companies with technical accounting memos that address the evolving application of U.S. GAAP to digital assets, token-based ecosystems, on-chain activity, and regulatory complexity. These memos help management document key judgments, structure financial statements properly, and ensure consistency across reporting periods. This list summarizes the common scenarios where RFS prepares memos for clients for clarity. Contact us for assistance.

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Digital Asset Classification & Measurement

1. Crypto Asset Classification (ASC 350)
   Why it matters: Most tokens are treated as indefinite-lived intangibles under GAAP.
   Memo includes: Classification rationale, impairment methodology, fair value reference sources.
2. Impairment Testing of Crypto Assets
   Why it matters: Required when crypto asset fair value falls below carrying value.
   Memo includes: Frequency of testing, price source hierarchy, impairment tracking.
3. Fair Value Election for Crypto Assets
   Why it matters: New FASB guidance may allow fair value through P&L.
   Memo includes: Election policy, transition approach, pricing sources, valuation timing.
4. NFT Valuation and Accounting
   Why it matters: NFTs may be treated as intangibles, inventory, or financial instruments depending on context.
   Memo includes: Asset purpose, unit of account, impairment or fair value approach.
5. Stablecoin Holdings
   Why it matters: May qualify as cash equivalents or financial assets.
   Memo includes: Redemption rights, backing transparency, issuer risk.

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Revenue Recognition & Token Flows (ASC 606)

6. Token Sales / ICOs
   Why it matters: May represent deferred revenue or financial liability.
   Memo includes: Performance obligation identification, breakage, legal form vs substance.
7. Staking Rewards Revenue
   Why it matters: Often the primary revenue stream.
   Memo includes: Principal vs agent, performance obligation, valuation of token rewards.
8. Transaction Fees and Protocol Revenue
   Why it matters: On-chain services (e.g. validators, bridges) earn fees in tokens.
   Memo includes: Revenue recognition timing, non-cash consideration.
9. Mining Rewards
   Why it matters: Treated as revenue when earned.
   Memo includes: Block reward timing, valuation at receipt.
10. Marketplace or Exchange Fees
    Why it matters: Determines revenue recognition and principal vs agent classification.
    Memo includes: Smart contract control, custody, counterparty role.
11. Airdrops and Token Grants Received
    Why it matters: May be income, contribution, or equity.
    Memo includes: Timing of recognition, valuation, performance conditions.

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Token Issuance & Liabilities

12. SAFT Agreements (Simple Agreements for Future Tokens)
    Why it matters: May be deferred revenue or liability.
    Memo includes: Obligation evaluation, redemption or refund features, delivery expectations.
13. Treasury Token Classification
    Why it matters: Company-issued tokens may be liability, equity, or deferred revenue.
    Memo includes: Use case, control retention, obligation to holders.
14. Token Warrants or Token-Based Compensation (ASC 718 by analogy)
    Why it matters: Tokens granted to employees or advisors require expense recognition.
    Memo includes: Grant date, vesting schedule, valuation, service-based or performance-based terms.
15. Governance or Utility Tokens with Embedded Rights
    Why it matters: May contain derivatives or settlement features.
    Memo includes: Token design, host vs embedded feature analysis under ASC 815.
16. Token Buyback or Burn Programs
    Why it matters: May trigger liability extinguishment or equity reduction.
    Memo includes: Substance of repurchase, accounting treatment.

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Consolidation, Control & Structures (ASC 810)

17. DAO Involvement or Consolidation
    Why it matters: If the company controls a DAO, consolidation may be required.
    Memo includes: Power and benefit analysis, VIE status.
18. Foundation and Treasury Entity Relationships
    Why it matters: Foundations may house token treasuries or IP.
    Memo includes: Voting/control rights, benefit flows, consolidation under ASC 810.
19. Joint Ventures and Protocol Affiliates
    Why it matters: For shared control over new L2s, tools, or ecosystems.
    Memo includes: Equity method vs consolidation determination.

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Custody, Risk, and Compliance

20. SAB 121/122 Crypto Custody Treatment
    Why it matters: SEC guidance may require grossing up custodial assets and liabilities.
    Memo includes: Custodial responsibility, legal ownership, risk exposure.
21. Safeguarding Obligations
    Why it matters: May trigger separate liability for tokens held for customers.
    Memo includes: Nature of custody, segregated wallets, liability vs agency view.
22. On-Chain Wallet Reconciliation
    Why it matters: Required to support audit assertions.
    Memo includes: Reconciliation methods, DeFi activity matching, smart contract reporting.

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Other Relevant Areas

23. Going Concern Evaluation
    Why it matters: High volatility can threaten liquidity runway.
    Memo includes: Treasury runway, stablecoin exposure, operational burn.
24. Fair Value Hierarchy for Illiquid Tokens
    Why it matters: Level 3 estimates require support.
    Memo includes: Market activity, OTC pricing, valuation models.
25. Environmental or Energy Usage Disclosures
    Why it matters: Required or expected for mining-intensive businesses.
    Memo includes: Emissions estimates, energy use per token mined.

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This is not an exhaustive list. If you are facing a unique or complex accounting matter not shown here, reach out to us. Ridgeway Financial Services is happy to help. Contact us.