Valuation of nonfungible tokens (NFTs) became a popular topic when a digital artist sold an NFT for almost $70 million earlier this year, commanding numerous other transactions that posed a difficult question for CPAs.
NFTs are digital cryptoassets that are unique digital representations and establish the ownership and authenticity of assets. NFTs give artists a way to confirm their rights and ensure the creators will get compensated for future use of the tokens.
Because of their nature and relatively new use, valuation of NFTs is an evolving and challenging area. There are different valuation considerations for the creator, purchasers and owners of NFTs at the beginning of their existence and on an ongoing basis. Learn why.