Industries

Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

SEC issues SAB 121 on digital asset custodial obligations

Hot topic | March 2022

Requires entities undertaking certain digital asset custodial activities to record a safeguarding liability and asset.

Initial and subsequent measurement of the safeguarding obligation liability and related asset will be based on the fair value of the custodied digital assets.

Applicability

Staff Accounting Bulletin 121

SAB 121 applies to financial statements prepared under either US GAAP or IFRS® Standards for:

  • Existing registrants
  • Entities that have submitted or filed a not-yet-effective registration statement
  • Other entities and financial statements as specified by the SAB

 

Relevant dates

Existing registrants apply SAB 121 to financial statements for interim and annual periods ending after June 15, 2022, with retrospective application, at a minimum, to the beginning of the fiscal year.

Other entities subject to SAB 121 apply it in their next submission or filing. Retrospective application is required to either:

  • the beginning of the most recent annual period ending before June 15, 2022 when a subsequent interim period is presented; or
  • the beginning of the two most recent annual periods ending before June 15, 2022 when a subsequent interim period is not presented.

Key Impacts:

Recognition and measurement:

  • An issuer that holds digital assets for others recognizes (1) the custodied digital assets and (2) a liability to return those assets if it ‘controls’ them.
  • An issuer that holds digital assets for others, but does not ‘control’ them, recognizes (1) a liability for its obligation to safeguard the digital assets and (2) a corresponding asset. This reflects the SEC staff’s view that safeguarding digital assets presents unique risks and uncertainties not present in arrangements to safeguard other assets.
  • The liability is measured initially and subsequently at the ASC 820 fair value of the digital assets held; as, in general, is the corresponding asset.

Disclosures:

  • How the issuer is accounting for the safeguarding liability and asset, and the effects of initially applying the SAB.
  • Nature and amount of each significant digital asset that the issuer is responsible for safeguarding for others, as well as any vulnerabilities that the issuer has from any concentration of such activities.
  • Required fair value measurement disclosures under ASC 820.
  • Who (e.g. the company, its agent or another third party) holds the cryptographic keys, maintains the internal recordkeeping of those assets, and is obligated to secure the assets and protect them from loss or theft.
  • Significant risks and uncertainties associated with the issuer’s safeguarding of digital assets for others.

Download the document:

Evaluating custody of digital assets

Download PDF

Meet our team

Image of Scott Muir
Scott Muir
Partner, Dept. of Professional Practice, KPMG US
Image of Chase Stobbe
Chase Stobbe
Partner, Dept. of Professional Practice, KPMG US

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline