Real-world asset tokenization has moved from conference slides to production systems. Treasuries, real estate, private credit, and commodities now trade as tokens on blockchain rails. For accounting and finance teams, this creates a new category of complexity—familiar assets with unfamiliar wrappers.
The accounting questions are not theoretical anymore. When a company holds tokenized treasury bills, receives tokenized equity as payment, or issues tokens representing ownership in physical assets, the general ledger needs entries. Those entries need to be defensible, consistent, and auditable.
The asset underneath still matters most
A tokenized treasury bill is still a treasury bill. A tokenized share of real estate is still real estate. The token is a wrapper—a delivery mechanism and ownership record—but it does not fundamentally change what the asset is.
This matters because accounting treatment follows the economic substance of what you hold, not the technology used to hold it. If the underlying asset would be classified as a financial instrument, a security, or an intangible, that classification likely carries forward to the tokenized version.
The questions to ask are straightforward. What rights does the token represent? Does it convey ownership, a claim, or something else entirely? Is there recourse to an underlying asset, or is the token itself the only thing you own? What happens if the issuer fails or the platform shuts down?
These answers drive classification. A tokenized money market fund share that provides direct ownership of the underlying assets looks very different from a token that simply tracks an index with no redemption rights.
Classification is where teams get stuck
The challenge with tokenized assets is that they often blend characteristics. A single token might look like a security, behave like a currency, and settle like a commodity. Existing accounting frameworks were not written with this flexibility in mind.
Start with the framework you know. ASC 860 addresses transfers of financial assets. ASC 320 covers debt securities. ASC 321 addresses equity investments. ASC 350 handles intangibles. The new ASC 350-60 guidance addresses crypto assets specifically. One of these frameworks applies—the question is which one, and why.
For tokenized securities, the analysis often maps cleanly. If the token represents equity in an entity, equity accounting applies. If it represents debt with fixed payments, debt security accounting applies. The token layer does not change this.
Tokenized commodities create more complexity. Does holding a gold-backed token mean you hold gold, or do you hold a claim on gold? The answer depends on the token structure—whether you can redeem for physical delivery, whether the gold is allocated or pooled, and whether the issuer is operationally capable of delivery.
Utility tokens and governance tokens present the hardest cases. These often lack any claim on underlying assets and derive value from platform access or voting rights. For most enterprises, these fall into intangible asset treatment, but the analysis needs to be documented.
Fair value measurement gets complicated fast
Once you have classified the asset, you need to value it. Tokenized assets introduce fair value challenges that traditional assets avoid.
The first issue is market depth. Many tokenized assets trade on specialized platforms with limited liquidity. A quoted price exists, but the market may not be able to absorb a meaningful sale at that price. Level 2 and Level 3 fair value measurements become common when the token market itself is thin but the underlying asset has observable pricing.
Consider a tokenized real estate position. The token might trade on a secondary market at one price, while the underlying property has an appraised value at another. Which price represents fair value? The answer depends on whether you are measuring the token or the real estate interest, and whether the token market is sufficiently active to provide a reliable indication of fair value.
Pricing sources require documentation. If you use the token trading price, you need to demonstrate that the market is active enough for that price to be meaningful. If you use the underlying asset value, you need to explain why the token market price is not representative and document your valuation methodology.
The timing of valuations also matters. Token markets may trade 24/7 while underlying assets—particularly real estate or private credit—value on different schedules. Treasury teams need a consistent approach to measurement date and time, documented and applied uniformly.
Revenue recognition has new wrinkles
When tokenized assets generate income, revenue recognition follows the nature of the underlying economics—but the mechanics can create tracking challenges.
Tokenized bonds or credit instruments may distribute interest through on-chain transactions. These distributions represent interest income, accounted for under ASC 835, regardless of how they are delivered. The fact that interest arrives as a token transfer rather than a wire does not change its character.
Tokenized equity positions may distribute dividends in kind—sometimes in the same token, sometimes in other tokens, sometimes in stablecoins. Each distribution needs to be captured, valued at the time of receipt, and recorded appropriately.
Real estate tokens that distribute rental income create similar tracking requirements. The income is rental income, but the delivery mechanism means treasury teams need systems that capture on-chain distributions and map them to the correct revenue accounts.
Staking or liquidity rewards on tokenized asset platforms add another layer. If you earn additional tokens by providing liquidity or participating in platform governance, those rewards likely represent income at receipt. The value at receipt becomes your cost basis, and subsequent changes flow through the appropriate gain or loss accounts.
Issuers face a different set of questions
If your company issues tokenized assets rather than holding them, the accounting sits on the other side of the transaction—and the stakes are higher.
Liability recognition depends on what the token represents. If you issue tokens backed by real assets with redemption rights, you likely have a liability on your books equal to the redemption value. The assets backing those tokens may need to be segregated and disclosed.
Derecognition questions arise when tokenized assets transfer. Under ASC 860, a transfer of financial assets qualifies for sale treatment only if certain conditions are met—legal isolation, transferee rights, and no effective control retained by the transferor. Token transfers need to be evaluated against these criteria.
Revenue recognition for token issuers follows ASC 606 when the token sale represents a contract with a customer. If the token provides access to future goods or services, revenue may need to be deferred and recognized over time. If the token represents a completed sale of an asset, recognition may be immediate. The analysis depends on the specific token structure and the promises made to token holders.
Disclosure obligations for issuers typically exceed those for holders. The nature of the tokenized assets, redemption terms, custody arrangements, and risk factors all warrant disclosure when material.
Internal controls need to cover the full lifecycle
Tokenized assets introduce control considerations that span both traditional finance and blockchain operations.
Custody controls must address both the tokens and, where applicable, the underlying assets. If you hold tokenized real estate, someone controls the tokens and someone controls the real estate. The relationship between these custody arrangements needs documentation, and the controls need to ensure they stay in sync.
Transaction authorization requires clear policies. Who can acquire tokenized assets? At what thresholds does approval escalate? How are dispositions authorized? These policies should mirror your controls for traditional investments, with additions for the technical aspects of token transfers.
Reconciliation processes must tie together multiple data sources—on-chain token balances, platform records, custodian statements, and underlying asset records where applicable. Discrepancies between these sources indicate control weaknesses that need investigation.
Valuation controls require documentation of sources, methodologies, and approvals. When fair values come from less liquid markets or require judgment, the control environment should include review and approval by appropriately qualified personnel.
The regulatory picture continues to develop
Tokenization sits at the intersection of securities law, banking regulation, tax policy, and emerging digital asset frameworks. The rules are not settled, and treasury teams need to monitor developments.
Securities classification determines not just accounting treatment but regulatory obligations. Tokens that constitute securities under the Howey test or similar frameworks trigger registration, disclosure, and trading restrictions that affect how they can be held and transferred.
Tax treatment may differ from accounting treatment. The IRS has provided limited guidance on tokenized assets specifically, and the treatment may depend on the underlying asset, the token structure, and the nature of transactions. Cost basis tracking and gain recognition timing need to align with tax requirements in each relevant jurisdiction.
International considerations multiply the complexity. A tokenized asset issued in one jurisdiction, held by an entity in another, and traded on platforms in a third creates a web of regulatory and tax questions. Multinational treasury operations need coordinated approaches across their entities.
Building the right foundation
Tokenization is not a temporary trend. The infrastructure is maturing, institutional adoption is accelerating, and the range of tokenized assets continues to expand. Treasury and accounting teams that build the right frameworks now will be positioned to handle whatever comes next.
The fundamentals remain constant—understand what you hold, classify it correctly, value it defensibly, and maintain controls and documentation that satisfy auditors and regulators. The token layer adds complexity, but it does not change these underlying requirements.
Navigating Tokenization and RWA Accounting?
For Accounting Firms:
Clients asking about tokenized securities or real-world asset accounting? The frameworks are evolving, but the audit evidence requirements are clear. Click here to schedule a meeting to discuss how firms are handling RWA client work.
For ETF Issuers and Fund Operators:
Tokenized fund accounting requires protocol-aware transaction classification and audit-ready reporting. Click here to schedule a meeting to discuss NAV calculation and cross-border compliance.
For Treasury Companies:
Considering tokenized treasury products or holding tokenized assets on your balance sheet? Click here to schedule a meeting to discuss GAAP treatment and internal controls.
