The American Accounting Standards Board has attempted to require firms to declare their crypto holdings using "fair-value" accounting.According to the Financial Accounting Standards Board (FASB), the first U.S. accounting regulation particularly for cryptocurrencies would require corporations to employ a fair-value methodology, which would require some digital assets to be evaluated at what they would trade …
The American Accounting Standards Board has attempted to require firms to declare their crypto holdings using “fair-value” accounting.
According to the Financial Accounting Standards Board (FASB), the first U.S. accounting regulation particularly for cryptocurrencies would require corporations to employ a fair-value methodology, which would require some digital assets to be evaluated at what they would trade for in the markets.
At a meeting on Wednesday, the board reviewed opinions on the modification and authorized staff to draught a final version of the new accounting standard, which will be applicable for fiscal years beginning after December 15, 2024. Before the end of the year, the final text is likely to be adopted in a written vote.
The regulation was proposed by the FASB, a voluntary standard-setting body regulated by the U.S. Securities and Exchange Commission (SEC), in March. The proposed revisions deviated from the industry’s standard practise of accounting for unrealized losses on these assets, which is considered as a barrier to widespread crypto adoption. Moving bitcoin into accounting standards specifically implies that corporations will include gains and losses in their quarterly income reports.
“I think we heard overwhelmingly from investors who allocate capital based on the use of financial statements that this will provide them with better information to make their decisions, and so I’m fully supportive of it,” said chairman of the board.
The board of directors encourages businesses to pursue early adoption of the new standard. MicroStrategy (MSTR) creator and former CEO Michael Saylor tweeted that this move “eliminates a major impediment to corporate adoption of $BTC as a treasury asset.”
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