Fair-Value Measurement for Illiquid and Unexchangeable Crypto Assets
Journal
Journal of Emerging Technologies in Accounting
Journal Volume
22
Journal Issue
2
Start Page
1-25
ISSN
1554-1908
1558-7940
Date Issued
2025-09
Author(s)
Abstract
This paper revisits the principal path method (PPM) for fair-value pricing of crypto assets and compares its performance with alternative models. The original PPM, as outlined by Beigman, Brennan, Hsieh, and Sannella (2023), is tailored for situations where few crypto assets trade directly against functional currencies on established exchanges, dynamically selecting primary pricing paths based on trading parameters like volume and reputation. This study extends the PPM by incorporating blockchain-specific factors, such as finalization and transaction fees, which influence trading costs and pricing relevance. We assess the modified PPM (MPPM) against other pricing methods using historical market data, showing that the MPPM delivers pricing information that more accurately aligns with the relevance and faithful representation criteria outlined in ASC 820 and IFRS 13.
Subjects
crypto assets
fair-value measurement
inactive markets
thinly traded
Publisher
American Accounting Association
Type
journal article