Bitcoin vs. USDC on Your Books: ASU 2023-08 in Plain English for Merchants

Two customers checked out on your store this morning. The first one paid 0.001 BTC. The second one paid 100 USDC. Both transactions hit your wallet within minutes of each other, both worth roughly the same in dollars, both went through the same payment integration.

Your bookkeeper opens QuickBooks at the end of the day and asks: “Same entry for both, right?”

No. Not even close. The reason matters a lot more than most merchants realize. FASB’s ASU 2023-08 — effective for fiscal years starting after December 15, 2024 — drew a sharp line between the two. One goes through a fair-value-through-net-income model that hits your earnings every quarter whether you sell or not. The other doesn’t.

I’ll walk through where that line is, why FASB drew it there, and what it changes for your year-end. The audience I have in mind is the founder or finance lead who needs to talk to a CPA, not the CPA. If you are a CPA, the stablecoin scope section is still where most of the confusion in the wild lives.

The six criteria that decide everything

ASU 2023-08 created a new subtopic, ASC 350-60, sitting inside the broader Intangibles topic. The scope sits at ASC 350-60-15-1. The standard tells you to measure certain crypto assets at fair value and run the gains and losses through net income every reporting period. But it only applies to assets that meet all of these criteria. Miss one and you’re out:

1. The asset meets the definition of an intangible asset in the Master Glossary.
2. It does not provide the holder with enforceable rights to, or claims on, underlying goods, services, or other assets.
3. It’s created or resides on a distributed ledger based on blockchain or similar technology.
4. It’s secured through cryptography.
5. It’s fungible.
6. It’s not created or issued by the reporting entity or its related parties.

Number two does almost all the work in practice: no enforceable rights to underlying goods, services, or other assets.

Read that again. That sentence is the entire reason Bitcoin and USDC live in different worlds on your income statement.

Why Bitcoin is in scope

Bitcoin satisfies every criterion. It’s intangible. It’s fungible. It lives on a public ledger. It’s cryptographically secured. It isn’t issued by your company. And — the load-bearing piece — owning a Bitcoin doesn’t give you a legal claim against anyone. There’s no issuer to redeem against, no underlying basket of assets you can demand, no “I gave you my BTC, now give me $30,000.” The market price is what someone else will pay you on an exchange, and that’s it.

So Bitcoin is in scope. That means:

• At every reporting period end, you remeasure your BTC holdings to fair value (ASC 350-60-35-1).
• The unrealized gain or loss goes straight through net income. Not OCI, not equity — net income.
• Fair value follows ASC 820, which for BTC essentially means the principal market price at the measurement date.
• You can no longer use the old impairment-only model where BTC was stuck at its lowest historical mark.

The practical effect: if you hold BTC across a quarter end and the price moves 15%, your reported earnings move with it. There’s no smoothing, no “we’ll book it when we sell.” The mark is the result.

Why USDC is not in scope

Now go back to criterion two. USDC, by Circle’s issuer disclosures, is redeemable 1:1 for US dollars (directly via Circle Mint for institutional holders, through licensed third parties for retail). Most practitioners read that redemption mechanic as an enforceable claim — even though the path differs by holder type, the economic right is consistent. That’s enough to fail criterion two. The whole point of a fiat-backed stablecoin is that it represents a dollar someone is on the hook to deliver to you.

So USDC fails criterion two. It is therefore not within the scope of ASC 350-60. Most practitioners reach the same conclusion for USDT (Tether) and other fiat-backed stablecoins, but the analysis still turns on the actual rights and obligations attached to the token you hold.

Here’s where merchants get confused. The standard doesn’t tell you how to account for stablecoins. It just tells you they’re out. So what do you do?

The Deloitte FAQ on ASU 2023-08 (last updated July 21, 2025) puts it cleanest. The accounting for stablecoins “depends on the rights and obligations of the stablecoin.” It can land under financial assets, financial instruments, traditional intangibles, or other GAAP. For the typical merchant holding USDC short-term as a cash equivalent or near-cash, the answer most CPAs reach is one of two:

1. Cost less impairment under ASC 350 — treat it as a traditional intangible. You record it at acquisition cost, you don’t mark it up, you only write it down if it becomes impaired. For a token that’s pegged to a dollar and consistently trades at a dollar, impairment doesn’t trigger and the carrying value stays flat.
2. Financial asset / financial instrument treatment — if your CPA concludes the redemption right is substantive enough to make it a financial asset, you may end up in ASC 825 or similar. The mechanics differ, but the headline result for a pegged token held short term is roughly the same: you don’t see quarter-to-quarter volatility on your P&L from holding it.

This is the conclusion the typical merchant working on a typical timeline lands on with their CPA. It is not gospel and it is not universal — DAI, algorithmic stablecoins, yield-bearing tokens, and anything where the “claim” is murky can land somewhere completely different. Your CPA will have the last word.

What this looks like on a P&L

Let’s put numbers on it. Say on October 1, 2026, you receive two payments of equal dollar value:

• Payment A: 0.5 BTC, when BTC = $100,000. Fair value: $50,000.
• Payment B: 50,000 USDC. Fair value: $50,000.

You hold both through year-end. On December 31, BTC has risen to $120,000. USDC is still $1.0001.

Under ASU 2023-08 plus current GAAP for stablecoins:

Account	Oct 1 entry	Dec 31 remeasurement	Year-end carrying value
Digital Asset — BTC	$50,000	+$10,000 to net income	$60,000
Digital Asset — USDC	$50,000	$0 (no remeasurement)	$50,000

Same dollar received, very different P&L treatment. Your operating margin moved by $10,000 because you happened to hold BTC instead of USDC across the quarter end. You did nothing — no sale, no trade. The mark moved your earnings.

If BTC had dropped to $80,000 instead, the line would flip and you’d be reporting a $10,000 loss in net income for an asset you still hold. That’s the point of fair value through earnings: it shows up regardless of intent.

For a merchant who collects crypto and converts to fiat or stablecoin within days, the BTC mark exposure is small — it’s only the float sitting at period end that gets remeasured. For a merchant who treats BTC as a treasury asset, the mark is the entire story.

The disclosure requirements people forget

The fair value mechanics get the attention. The disclosure requirements catch people off guard at year-end. ASU 2023-08 added a specific set of disclosures in ASC 350-60-50. The summary for a merchant (with the timing flag people miss):

• Interim and annual: the name, cost basis, fair value, and number of units for each significant crypto asset holding, separately disclosed.
• Interim and annual: aggregate fair value and cost basis for holdings that aren’t individually significant.
• Interim and annual: contractual sale restrictions on crypto holdings — fair value of restricted holdings, nature of the restriction, remaining duration, and circumstances that could cause the restriction to lapse.
• Annual only: a reconciliation of beginning-to-ending holdings, showing additions, dispositions, and cumulative realized gains and cumulative realized losses separately, plus a description of the nature of activities driving those additions and dispositions.
• Annual only: the method used to determine cost basis (FIFO, specific identification, average cost, or other).
• Fair-value methods and inputs flow from ASC 820’s disclosure framework — which 350-60 assets are subject to — and apply at both interim and annual periods.

If you’re a small business filing GAAP-basis financials, this is real work. If you’re filing tax-basis financials, much of this doesn’t apply directly but the underlying records still matter for IRS basis tracking. Either way, the raw data you need is the same: per-receipt transaction record with timestamp, USD fair market value at receipt, wallet address, and the chain transaction hash.

That last point is worth pausing on. ASC 820 wants fair value supported by observable inputs where available. For a crypto asset received on-chain, the most defensible measurement is the price at the block timestamp where your transaction confirmed. That timestamp is on the public ledger. It’s not something your bookkeeper estimated. It’s not something a third-party platform attests to. It’s just there. Whether your payment flow is custodial or non-custodial, the on-chain timestamp is what your auditor will want to see anyway.

Edge cases that send people back to their CPA

Three situations the standard doesn’t cleanly resolve:

Wrapped tokens (wBTC, stETH, etc.). These represent a claim on an underlying asset held by a custodian or smart contract. Criterion two is in play — there is a claim. The accounting answer typically lands outside ASC 350-60. Treatment depends on the specifics of the wrapping arrangement.

DAI and other crypto-collateralized stablecoins. DAI is pegged to a dollar but isn’t a redemption claim against a regulated issuer — it’s overcollateralized and managed algorithmically. The “enforceable right” analysis is much harder. Most practitioners I’ve seen treat DAI similarly to fiat-backed stablecoins for short-term holdings, but the reasoning is shakier and your CPA may disagree.

Tokens you issued. Criterion six knocks out anything your company created. If you operate a loyalty token or any kind of issued asset, this is its own accounting analysis and it’s not what ASU 2023-08 is solving.

None of these has a one-line answer. The right response if you hold any of them is to walk through the six criteria with your CPA, document the conclusion in writing, and apply it consistently.

What to actually do this quarter

Three concrete steps, in order:

1. Separate your digital asset accounts. One ledger account per distinct asset (BTC, ETH, USDC, USDT, etc.). Don’t pool them. The disclosure rules require per-asset detail and the measurement rules require per-asset treatment.
2. Capture three numbers at every receipt: USD fair market value at the block timestamp, transaction hash, and receiving wallet address. If your payment gateway exposes this via API or CSV export, pull it monthly. If it doesn’t, get a different gateway — this is non-negotiable for audit defense.
3. Decide your stablecoin policy with your CPA in writing. Whether you’re going cost-less-impairment or financial-asset, document the reasoning, document the supporting analysis of the issuer’s redemption mechanics, and apply it the same way every period. Auditors care about consistency more than they care about which path you picked.

The companion post in this series walks through the actual journal entries — chart of accounts, debits and credits for receipt, settlement, and refund. That’s the one to read next if you need to set up the bookkeeping side. If you’re trying to figure out what your auditor will accept as evidence of these transactions, the audit trail post in this series handles that.

Three questions to bring to your CPA

1. For my stablecoin holdings, are we going cost-less-impairment under ASC 350, or financial-asset treatment? Why?
2. For my BTC and ETH holdings, what’s our fair value methodology — which price source, what time of day, how do we document it?
3. What’s our policy when a token is unclear (DAI, wBTC, stETH)? Who decides and how is that decision documented for future audits?

The standard isn’t ambiguous about Bitcoin. USDC has a strong out-of-scope analysis because of its redemption mechanics. USDT and other fiat-backed stablecoins usually land in the same practical bucket, but the conclusion should still be documented token by token. Everything in between is where your CPA earns their fee.

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This article is general information for merchants and finance leads. It is not accounting, tax, or legal advice, and it does not establish a client relationship. Accounting treatment depends on the specific facts of your business, your auditor’s interpretation of the standards, and any subsequent FASB or SEC guidance. Consult a licensed CPA before applying any of this to your books.