Cryptocurrency Accounting Guidelines Updated by US Accounting Standards Board

Crypto Accounting to Judge Assets at “Fair Value”

The Financial Accounting Standards Board (FASB) has unanimously voted to introduce new accounting guidelines for companies with significant cryptocurrency holdings. The guidelines require companies to report their cryptocurrency assets at their fair value, reflecting the assets’ most up-to-date worth. This approach aims to provide a more accurate picture of an entity’s financial position.

The update also includes a requirement for detailed disclosures about the types and changes in crypto asset holdings, reducing complexity and aligning with investor needs.

New Rules Will Not Include NFTs and Stablecoins

The new guidelines specifically address blockchain-based assets that meet certain criteria for fungibility and cryptography. However, they do not include non-fungible tokens (NFTs) and stablecoins. The FASB decided to wait for more market data before broadening the scope of the rules to include wrapped tokens that facilitate cross-blockchain swaps.

Companies will need to implement these fair value rules in fiscal years beginning after December 15, 2024. Those following the calendar year will adopt them in 2025.

Background and Global Comparison

The FASB had previously rejected three requests since 2017 to establish cryptocurrency-specific rules. However, as major corporations like Tesla and MicroStrategy began investing in Bitcoin, the board changed its stance.

The FASB is ahead of the International Accounting Standards Board (IASB) in terms of crypto accounting and fair value. Korea’s Financial Services Commission (FSC) has also issued its own cryptocurrency accounting guidelines, favoring the IASB norms.

Disclaimer

This news article aims to provide accurate and timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.