How To: Manage Asset Categorizations
- Cryptio |
- 9 steps |
- 24 seconds
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Navigate to <https://app.cryptio.co/assets/valuation>
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Click "Assets"
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This is your overview of all assets held and previously disposed of in your workspace. The potential spam review tab allows for quick and easy detection of assets to be marked and confirmed as spam in the workspace.
System Categories
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Click "System Categories"
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Ensure that significant assets are correctly categorized to reflect true financial health. Use off-balance sheet accounting for certain assets to comply with regulations and manage spam tokens to avoid cluttering financial statements.
1. **Significant Assets:** This represents the main assets important to client business operations. These assets are usually the focus of external audit and internal reporting. Therefore, utilizing the significant asset filter when running reports, it provides the reviewer with the complete population of key assets to focus on.
2. **Not to be booked:** Marking an asset as “not to be booked” is essentially using the off-balance sheet accounting method. These assets will still be included in your inventory views but they are not included in ERP Synchronization or ledger entry reports. This approach is perfect for clients that act as custodians and would like to keep customer assets separate from company business activities.
3. **Confirmed Spams:** These are confirmed spam asset tokens either done manually or automatically. Once confirmed as spam, the asset is priced at $0 and labeled “Spam” which can then be filtered out from the Treasury, Transactions, and Data Integrity modules. This also includes all reports.
Clustering
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Click "Clustering"
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Token clustering helps in grouping similar tokens together, simplifying asset management and tracking as it relates to key business activities. Below are some examples of how asset clustering can be used.
1. A Fund can create a cluster to include BTC and ETH as their main fund. This would allow for the fund manager to auto track/map the tokens to a specific GL account and across reports.
2. This is also a helpful tool for DeFi clients. LP tokens can be added to a “Defi” asset cluster which is mapped to their respective GL account and tracked through various reports.
Valuation
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Click "Valuation"
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**Asset Valuation →** Choosing the most relevant market for asset valuation ensures accurate reflection of market conditions. Ensure pegged assets (like stablecoins) are valued correctly, maintaining accurate financial records.
1. **Asset Pegging:** Is very useful when dealing with tokens that can derive their value from another token. For example, when you receive a LP token the accounting for the value can be a bit confusing. However, if you know the underlying asset that is funding the pool or base pair, then you can peg your LP token to that asset.
2. **Stablecoin Pegging:** Same process as Asset Pegging, but the main focus here is pegging the token to the backed FIAT. This will eliminate immaterial rounding differences that occur during transactions.
3. **Principal Market:** During an audit, it is preferred to have the most granular level of pricing available for assets. The default (Coin gecko) aggregates pricing from different sources which in return could decrease the efficiency of audit testing. In the valuation section, you have the ability to select specific principal markets for each material significant asset or all. This means you can have a different price provider for each asset and choose the period start date to avoid overwriting the historical pricing for previously closed periods.
Tip! You can compare prices from different principal market providers at a specific date and for specific assets.
Alert! 💡 Stablecoin pegging is **not** recommended for clients with arbitrage trading activity.