Fair Value Reports
In this guide, you will find information on the Fair Value Reports found on the Entries and Adjustments tab of the Reports page in the Taxbit Accounting Suite.
Contents
What is the Fair Value Standard?
The Fair Value standard, as defined by the FASB, is the value at which organizations must report for qualifying assets as of a given reporting period end. Fair Value is updated each reporting period based on the current market price, ensuring accurate valuation for the duration the asset is held.
Compared to the previous cost standard, Fair Value also improves the understandability of financial statements, as it reflects unrealized gains in net income rather than just impairment losses.
Things to Consider Under the Fair Value Standard and How Taxbit Can Help:
Market Volatility
Given the volatility of the crypto market, the ability to keep a detailed record of the valuation of assets throughout the time that they are held can seem impossible; however, Taxbit solves this problem by recording the fair value at the lot level for each qualifying asset held and disposed of during the selected period. This ensures that the carrying value of the asset is continuously updated based on market conditions at the end of each period.
Scoping of Crypto Assets
Understanding whether your assets fall into scope to report under the Fair Value standard can be difficult to determine based on the guidance provided by the Federal Accounting Standards Board. To help automate this process, Taxbit automatically lists each eligible asset within the Fair Value reports, both held and disposed of. You can declare an asset as ‘out-of-scope’ to exclude it from the Fair Value Reports.
Please note: Per the guidance, all NFTs are considered out of scope.
Data and Disclosure Requirements
It can be overwhelming to track the necessary details for reporting qualifying assets at Fair Value, such as the acquisition date, disposal date, details of the asset and source, gain/loss, period adjustments, fair value adjustments, and cost basis. Each of these details is provided within the Fair Value reports that Taxbit offers, making this process much easier for our customers.
Audit and Assurance Challenges
When the time comes to complete an audit, the auditors will likely want to review the records of these assets and where the values are coming from. With the details provided within each Fair Value report, Taxbit has accounted for the details they may ask for, such as beginning and end of period quantities for all held and disposed assets, the source the asset was held during that period, associated dates, lot quantities, etc.
Taxbit’s Fair Value Reports
Below, you will find detailed information regarding each of the Fair Value Reports that can be viewed and exported from the “Entries and Adjustments” section of the Reports page to help track the fair value of your assets.
Fair Value Summary
This report provides a detailed summary of all eligible assets (held and disposed of) during a given period. The columns of this report include:
Asset
The ticker symbol for the eligible asset(s).
Beginning of Period - Fair Value (All Assets)
The total fair value for each asset (both held and disposed) as of the beginning of the selected period.
Beginning of Period - Fair Value (Held Assets)
The total fair value for each asset as of the beginning of the selected period.
End of Period - Held Quantity
The total quantity of each asset as of the end of the selected period.
Cost Basis
The total cost basis for each asset as of the beginning of the selected period.
End of Period - Fair Value
The total fair value for each asset (both held and disposed) as of the end of the selected period.
Period Adjustment (Held Assets)
The difference between the end-of-period fair value and the beginning-of-period fair value of each asset held as of the ending date of the report.
Period Adjustment (Disposed Assets)
The difference between the end-of-period fair value and the beginning-of-period fair value of each asset disposed of during the period.
Cumulative FV Adjustment (Held Assets)
The difference between the end-of-period fair value and the initial cost basis for held assets as of the ending date of the report.
Total Period FV Adjustments (Held + Disposed)
The difference between the end-of-period fair value and the beginning-of-period fair value of all assets held at the end-of-period date and disposed of during the period.
Fair Value Adjustment Detailed - Ending Inventory by Lot
In this report, you can find a lot level breakdown of all eligible assets tracked at fair value as of the end of the selected period. The columns of this report include:
Asset
The ticker symbol for the eligible asset(s).
Buy Transaction ID
The transaction ID of the buy associated with each lot for the selected period.
Lot ID
Unique identifier for a lot. Usually, this is the Transaction Hash unless a smart contract event.
Source
The source from where the asset was acquired.
Beginning of Period - Quantity
The starting quantity of the asset within the lot.
End of Period - Quantity
The remaining quantity of the asset within the lot as of the end of the period.
Cost Basis
The original cost of the asset within the lot.
Acquisition Date
The date and time the asset was acquired within the lot.
Beginning of Period
The start date of the fair value calculation period.
End of Period
The ending date for the fair value calculation period.
Beginning of Period - Fair Value
The fair value of the lot at the beginning of the period.
End of Period - Fair Value
The fair value of the lot at the end of the period.
Period Fair Value Adjustment
The change in fair value of the lot during the period.
Cumulative FV Adjustment (Held Quantity)
The difference between the end-of-period fair value and the initial cost basis for held assets in the lot as of the ending date of the report.
Fair Value Adjustment Detailed - Disposition
This report provides a lot-level breakdown of all disposed of assets during the chosen period, tracked at Fair Value. The columns of this report include:
Asset
The ticker symbol for the eligible asset(s).
Buy Transaction ID
The transaction ID of the buy associated with each lot for the selected period.
Lot ID
Unique identifier for a lot. Usually, this is the Transaction Hash unless a smart contract event.
Source
The platform where the asset was disposed of.
Disposed of Quantity
The raw quantity of the asset that was disposed of.
Disposal Transaction ID
The transaction ID of the disposition event.
Cost Basis
The original cost basis of the disposed assets.
Acquisition Date
The date the asset was acquired.
Disposition Date
The date the asset was disposed of.
Fair Value at Last Adjustment
Fair value as of the last period end date, or the acquisition date FV for assets acquired intra-period.
Fair Value at Disposition
Fair value of the assets at the point of disposition.
Period Fair Value Adjustment
The change in fair value during the period and the last adjustment.
Cumulative Fair Value Adjustment
Difference between the fair value at disposition and the original cost basis for lots disposed of prior to period-end.