CHALLENGES IN RECOGNIZING NFTS AS INTANGIBLE ASSETS: A CRITICAL REVIEW OF CURRENT ACCOUNTING FRAMEWORKS

The meteoric rise of Non-Fungible Tokens (NFTs) has outpaced the development of standardized accounting frameworks, creating significant valuation inconsistencies globally-and acutely in South Africa. This study investigates the impact of behavioral drivers, regulatory environment, and technological infrastructure on accounting valuation standards for NFTs between 2020 and 2024, moderated by macroeconomic conditions. The research is timely, given South Africa's 150% NFT market growth and the absence of binding accounting guidance despite increasing adoption. Using a panel regression approach based entirely on secondary data from 40 firms, the study applied robust diagnostics (ADF, VIF, Durbin-Watson, Breusch-Pagan) to validate statistical reliability. Results revealed behavioral drivers (β = 0.416, p< 0.001) and technological infrastructure (β = 0.371, p< 0.001) as the strongest predictors of NFT accounting standards, followed by the regulatory environment (β = 0.332, p< 0.001) and macroeconomic conditions (β = 0.231, p = 0.001). The overall model fit was high (R² = 0.76), with correlation coefficients also confirming strong associations, particularly between behavioral trends and valuation practices (r = 0.84). The findings suggest that accounting systems must evolve to incorporate behavioral analytics, blockchain-based valuation mechanisms, and responsive regulatory frameworks. The study recommends the adoption of NFT-specific fair value standards, sentiment-driven valuation adjustments, and enhanced enforcement of accounting disclosures to ensure consistency, transparency, and investor protection in South Africa's digital economy.