What are digital assets?

Digital assets include anything that individuals stored in the Internet, computers or cloud storage may have economic value, emotional value and personal value. They also include the domain name of online account, e-mail of personal webpage, application of personal life data and virtual currency, scores and props in the game.

Generally speaking, there are two standards for asset recognition, that is, the future economic benefits and their costs and values can be measured reliably, and digital assets meet these two standards. First of all, in an enterprise that mainly produces and operates digital products, selling digital products is the main source of its main business income, which can bring economic benefits to the enterprise, and digital assets, as the research and development achievements of the enterprise, are intellectual property rights that the enterprise can own and control. Secondly, as mentioned above, the R&D cost of digital assets can be measured reasonably, and its market value can be determined through evaluation.

Digital assets are measurable. There are two value bases for measuring assets, namely input value and output value. Because the input value can be verified, it is the first choice in traditional financial accounting measurement, and its measurement attributes include historical cost, current cost or replacement cost. The output value of assets is based on the cash and cash equivalents that assets can get when they finally leave the enterprise through exchange, and its measurement attributes include current market price, net realizable value, liquidation value and present value of future cash flows. We know that the tangible assets of general computer software enterprises are very limited.

There are no large-scale production equipment, workshop and office equipment, no raw materials, only a few studios, computers and developers, but the value they create is hard to estimate, which can be seen from the far difference between the market price and the book value of such enterprises. Therefore, it is impossible to measure only the input value. At present, the market price, net realizable value and liquidation value's measurement of digital assets are not convincing, because the uniqueness of digital assets fundamentally denies that there are the same or similar assets in the market for reference, and a lot of knowledge used in developing digital assets has no market value to measure. Therefore, the present value of future cash flow of digital assets is an ideal measurement attribute, which not only focuses on the future, but also considers the expected actual value of digital assets, its time distribution and discount rate, and can properly reflect the characteristics of "future economic benefits".