Non-Fungible Token valuation: State of the art and future insight

Author/s Paola Paoloni, Giuseppe Modaffari, Martina Manzo
Publishing Year 2023 Issue 2023/2
Language English Pages 32 P. 39-70 File size 209 KB
DOI 10.3280/FR2023-002002
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

Purpose: This paper aims to provide an exploratory analysis of Non-Fungible Tokens (NFTs) valuation. NFTs are a new kind of digital asset born out of the dis-ruptive technologies’ introduction (i.e., blockchain). A lot of small and medium en-terprises (SMEs), as innovative start-ups, are involved in this domain. Nowadays, several issues in the evaluation field remain unclear. To fill this gap, this research adopts a holistic approach is crucial to draw a clear picture of the first-time ac-counting treatment of these new digital assets. Design/methodology/approach: Using a structured approach, this research considers some of the state-of-the-art international practices and reviews some major scholars’ opinions on the matter. Particularly, the study analyses the main contributions provided by international entities (e.g., European Financial Reporting Advisory Group - EFRAG, Chartered Business Valuators institute - CBV, PriceWa-terhouseCoopers - PWC), digital operators, and academia. Findings: Based on the two main strands defined for the NFT’s nature, NFTs valuation issues can be resumed in twofold. The first one that considers NFTs as intangible assets suggests following the traditional valuation approaches (cost, in-come, or market) that is already a part of international accounting standards. The second strand that considers NFTs as financial assets proposes a different valua-tion approach based on quantitative methods coming mainly from finance fun-damentals. Originality/value: The originality of this study includes the different NFT val-uation approaches, which enrich the literature and can help SMEs in managing and accounting for this new kind of digital asset.

Keywords: Non-fungible token; valuation; Accounting; Disclosure.

Jel codes: M100

  1. Aharon D.Y. and Demir E. (2022). NFTs and asset class spillovers: Lessons from the period around the COVID-19 pandemic. Finance Research Letters, 47, 102515,
  2. Antonakakis N., Chatziantoniou I. and Gabauer D. (2019). Cryptocurrency market contagion: Market uncertainty, market complexity, and dynamic portfolios. Journal of International Financial Markets, Institutions and Money, 61, pp. 37-51,
  3. Antonakakis N. and Gabauer D. (2017). Refined measures of dynamic connectedness based on TVP-VAR. MPRA Paper No. 78282, pp. 1-14.
  4. Bao H. and Roubaud D. (2022). Non-Fungible Token: A Systematic Review and Research Agenda. Journal of Risk and Financial Management, 15(5), pp. 215-224,
  5. Bianchi S. (2019). Disclosure initiative and related research projects. Financial Reporting, 1, pp. 145.153, DOI: 10.3280/FR2019-001005
  6. Borup M., Brown N., Konrad K. and van Lente H. (2006). The sociology of expectations in science and technology. Technol. Anal. Strat. Manag, 18, pp. 285-298, DOI: 10.1080/09537320600777002
  7. Burniske C. and Tatar J. (2018). Cryptoassets: The innovative investor’s guide to bitcoin and beyond. New York, USA: McGraw-Hill Education.
  8. de Moya-Anegon F., Chinchilla-Rodrıguez Z., Vargas-Quesada B., Corera-Alvarez E., Munoz- Fernandez F.J., Gonzalez-Molina A. and Herrero-Solana V. (2007). Coverage analysis of Scopus: a journal metric approach. Scientometrics, 73(1), pp. 53-78,
  9. Diebold F.X. and Yilmaz K. (2009). Measuring financial asset return and volatility spillovers, with application to global equity markets. The Economic Journal, 119(534), pp. 158-171,
  10. Diebold F.X. and Yilmaz K. (2012). Better to give than to receive: Predictive directional measurement of volatility spillovers. International Journal of forecasting, 28(1), pp. 57-66,
  11. Diebold F.X. and Yılmaz K. (2014). On the network topology of variance decompositions: Measuring the connectedness of financial firms. Journal of econometrics, 182(1), pp. 119-134,
  12. Domínguez M.A. and Lobato I.N. (2003), Testing the martingale difference hypothesis. Econometric Reviews, 22(4), pp. 351-377, DOI: 10.1081/ETC-120025895
  13. Dowling M. (2022a). Fertile LAND: Pricing non-fungible tokens. Finance Research Letters, 44, 102096,
  14. Dowling M. (2022b). Is non-fungible token pricing driven by cryptocurrencies?. Finance Research Letters, 44, 102097,
  15. Escanciano J.C. and Lobato I.N. (2009). An automatic portmanteau test for serial correlation. Journal of Econometrics, 151(2), pp. 140-149,
  16. European Financial Reporting Advisory Group (July 2020). Accounting for crypto-assets (liabilities): holder and issuer perspective, Discussion Paper, pp. 1-152. -- Available at
  17. Freni P., Ferro E. and Moncada R. (2022). Tokenomics and blockchain tokens: A design-oriented morphological framework. Blockchain: Research and Applications, 3(1), 100069,
  18. Gerber S., Markowitz H.M., Ernst P.A., Miao Y., Javid B. and Sargen P. (2022). The Gerber statistic: a robust co-movement measure for portfolio optimization. The Journal of Portfolio Management, 48(3), pp. 87-102,
  19. Gubareva M. and Umar Z. (2020). Emerging market debt and the COVID‐19 pandemic: a time–frequency analysis of spreads and total returns dynamics. International Journal of Finance & Economics, pp. 1-15,
  20. Hayes A. (2015), A Cost of Production Model for Bitcoin, retrieved from Department of Economics, The New School for Social Research: available at --
  21. International Accounting Standard Board (2011). International Financial Reporting Standard nr. 13 – Fair Value Measurement, pp. 1-48.
  22. International Accounting Standard Board (2014). International Accounting Standard nr. 38 – Intangible Asset, pp. 1-36.
  23. Jesson J., Matheson L. and Lacey F.M. (2011). Doing your literature review: Traditional and systematic techniques. London, United Kingdom: Sage.
  24. Kalichkin D. (2018). Rethinking Network Value to Transactions (NVT) Ratio. Medium, February, 3 --
  25. Kim J.H. (2009). Automatic variance ratio test under conditional heteroskedasticity. Finance Research Letters, 6(3), pp. 179-185,
  26. Ko H., Son B., Lee Y., Jang H. and Lee J. (2022). The economic value of NFT: Evidence from a portfolio analysis using mean – variance framework. Finance Research Letters, 47, 102784,
  27. Liberati A., Altman D. G., Tetzlaff J., Mulrow C., Gøtzsche P. C., Ioannidis J. P. ... and Moher D. (2009). The PRISMA statement for reporting systematic reviews and meta-analyses of studies that evaluate health care interventions: explanation and elaboration. Journal of clinical epidemiology, 62(10), pp. e1-e34,
  28. Massaro M. (2021). Digital transformation in the healthcare sector through blockchain technology, insights from academic research and business developments. Technovation, 102386,
  29. Massaro M., Dumay J. and Guthrie J. (2016), On the shoulders of giants: undertaking a structured literature review in accounting. Accounting, Auditing & Accountability Journal, 29(5), pp. 767-801, DOI: 10.1108/AAAJ-01-2015-1939
  30. Maouchi Y., Charfeddine L. and El Montasser G. (2022). Understanding digital bubbles amidst the COVID-19 pandemic: Evidence from DeFi and NFTs. Finance Research Letters, 47, 102584,
  31. Mechelli A., Sforza V., Stefanoni A. and Cimini R. (2018). The value relevance of the fair value hierarchy. Empirical evidence from the European Union. Financial Reporting, 2, pp. 7-35, DOI: 10.3280/FR2018-002002
  32. Mofokeng N. and Fatima T. (2018). Future tourism trends: Utilizing non-fungible tokens to aid wildlife conservation. African Journal of Hospitality, Tourism and Leisure, 7(4), pp. 1-20.
  33. Momtaz P.P. (2021). The pricing and performance of cryptocurrency. The European Journal of Finance, 27(4-5), pp. 367-380, DOI: 10.1080/1351847X.2019.1647259
  34. Nash G. (2017). The Anatomy of ERC721: Understanding Non-Fungible Ethereum Tokens. -- Available at
  35. (2022). Quarterly NFT Market Report. Q1-2022, pp. 1-54. -- Available at
  36. Paoloni P., Modaffari G., Ricci F. and Della Corte G. (2022). Intellectual capital between measurement and reporting: a structured literature review. Journal of Intellectual Capital, (ahead-of-print).
  37. Paoloni P., Paoloni N. and Modaffari G. (2019). Crowdfunding as a new collaborative process in the knowledge economy: A literature review. VINE Journal of Information and Knowledge Management Systems, 49(2), pp. 241-255.
  38. Patrickson B. (2021). What do blockchain technologies imply for digital creative industries?. Creativity and Innovation Management, 30(3), pp. 585-595,
  39. Petticrew M. and Roberts H. (2008). Systematic Reviews in the Social Sciences: A Practical Guide. Kindle ed., Oxford: Wiley-Blackwell.
  40. PricewaterhouseCoopers (2019). Cryptographic assets and related transactions: accounting considerations under IFRS, pp. 1-23. -- Available at -assets-related-transactions-accounting-considerations-ifrs-pwc-in-depth.pdf.
  41. PricewaterhouseCoopers (2021). Non-Fungible Tokens (NFTs): Legal, tax and accounting considerations you need to know, pp. 1-32. -- Available at
  42. Quagli A. (2009). Dal fair value al fairy value: coerenza concettuale e condizioni di impiego del fair value negli IFRS. Financial reporting, 1, pp. 94-120.
  43. Quagli A. and Paoloni P. (2012). How is the IFRS for SME accepted in the European context? An analysis of the homogeneity among European countries, users and preparers in the European commission questionnaire. Advances in accounting, 28(1), pp. 147-156,
  44. Quagli A., Avallone F. and Ramassa P. (2016). The Real Impact Factor and the Gap between Accounting Research and Practice. Financial Reporting, 1, pp. 29-58, DOI: 10.3280/FR2016-001003
  45. Quagli A., Venuti M. and Ramassa P. (2021). Dialogue with standard setters: edited by Raffaele Fiume and Tiziano Onesti: COVID-19: the impact on IFRS Financial Reporting. Financial Reporting, 2, pp. 161-173, DOI: 10.3280/FR2021-002005
  46. Ramassa P. and Leoni G. (2022). Standard setting in times of technological change: accounting for cryptocurrency holdings. Accounting, Auditing & Accountability Journal, 35(7), pp. 1598-1624, DOI: 10.1108/AAAJ-10-2020-4968
  47. Rizza C., Greco A.M. and Rizzotti D. (2011). Informativeness of intangible assets voluntary disclosure: effects on Italian financial market. Financial Reporting, 2, pp. 9-31, DOI: 10.3280/FR2011-002002
  48. Schmitz J. and Leoni G. (2019). Accounting and auditing at the time of blockchain technology: a research agenda. Australian Accounting Review, 29(2), pp. 331-342,
  49. Secundo G., Ndou V., Del Vecchio P. and De Pascale G. (2020). Sustainable development, intellectual capital and technology policies: a structured literature review and future research agenda. Technological Forecasting and Social Change, 153, 119917.
  50. Sidanius J., Pratto F., Van Laar C. and Levin S. (2004). Social dominance theory: Its agenda and method. Political psychology, 25(6), pp. 845-880.
  51. Singh T.K. and Tylar J. (2019). Decrypting Crypto: An Introduction to Crypto-assets and a study of select valuation approaches. Journal of Business Valuation, pp. 1-90.
  52. Snyder H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of business research, 104, pp. 333-339,
  53. Socoliuc M. and Grosu V. (2016). Approaches And Clarifications On The Ifrs 13 Application-Fair Value Measurement. Management Strategies Journal, 34(4), pp. 107-114.
  54. Spanò R., Massaro M., Ferri L., Dumay J. and Schmitz J. (2022). Blockchain in accounting, accountability and assurance: an overview. Accounting, Auditing & Accountability Journal, 35(7), pp. 1493-1506, DOI: 10.1108/AAAJ-06-2022-5850
  55. Stephenson N. (1992). Snow Crash. New York: Bantam.
  56. Tranfield D., Denyer D. and Smart P. (2003). Towards a methodology for developing evidence-informed management knowledge by means of systematic review. British Journal of Management, 14, pp. 207-222, DOI: 10.1111/1467-8551.00375
  57. Treiblmaier H. (2021). Beyond blockchain: How tokens trigger the internet of value and what marketing researchers need to know about them. Journal of Marketing Communications, pp. 1-13, DOI: 10.1080/13527266.2021.2011375
  58. Tremolada L. (2021). Come si determina il prezzo degli Nft? Una mappa per visualizzare la “rivoluzione” dei token non fungibili. Il Sole 24 Ore, Novembre.
  59. Trevisi C., Moro Visconti R. and Cesaretti A. (2022). Non-FungibleTokens (NFT): business models, legal aspects, and market valuation. Medialaws, pp. 1-26.
  60. Umar Z., Gubareva M., Teplova T. and Tran D.K. (2022). COVID-19 impact on NFTs and major asset classes interrelations: Insights from the wavelet coherence analysis. Finance Research Letters, 102725,
  61. Vagnozzi O. (2017). Accounting research production and evaluation: The view of the professionals. Financial Reporting, 2, pp. 75-80, DOI: 10.3280/FR2017-002008
  62. Vidal-Tomás D. (2022). The new crypto niche: NFTs, play-to-earn, and metaverse tokens. Finance Research Letters, 102742,
  63. Wang Q., Li R., Wang Q. and Chen S. (2021). Non-Fungible Token (NFT): Overview, Evaluation, Opportunities and Challenges. arXiv, 2105.07447, pp. 1-22,
  64. Wong G., Greenhalgh T., Westhorp G., Buckingham J. and Pawson R. (2013). RAMESES publication standards: Meta-narrative reviews. BMC Medicine, 11(20), pp. 1-15, DOI: 10.1186/1741-7015-11-20
  65. Woo W. (2017). Introducing NVT Ratio (Bitcoin’s PE Ratio), use it to detect bubbles, October 5, -- https://
  66. Woo W. (2017). Is Bitcoin In A Bubble?. Check The NVT Ratio, September 29, --
  67. Yousaf I. and Yarovaya L. (2022). Static and dynamic connectedness between NFTs, Defi and other assets: Portfolio implication. Global Finance Journal, 53, 100719,
  68. Yue Y., Li X., Zhang D. and Wang S. (2021). How cryptocurrency affects economy? A network analysis using bibliometric methods. International Review of Financial Analysis, 77, 101869,
  69. Zaremba A., Umar Z. and Mikutowski M. (2019). Inflation hedging with commodities: A wavelet analysis of seven centuries worth of data. Economics Letters, 181, pp. 90-94,

Paola Paoloni, Giuseppe Modaffari, Martina Manzo, Non-Fungible Token valuation: State of the art and future insight in "FINANCIAL REPORTING" 2/2023, pp 39-70, DOI: 10.3280/FR2023-002002