Grayscale Investments CFO Praises New Crypto Accounting Standards
Grayscale Investments CFO, Ed McGee, recently praised the Financial Accounting Standards Board’s (FASB) new crypto accounting standards. In an interview with CFO Dive, McGee expressed his support for the step forward that FASB took in including digital assets in generally accepted accounting principles.
Narrow Scope of Assets
- The new accounting rules address bitcoin and ethereum but not non-fungible tokens.
- McGee believes it would have been better if the rules included wrapped tokens or tokens with enforceable rights.
Progress and Excitement
While the new standard may not solve every nuance from an accounting perspective, McGee is excited about the progress made by FASB. He believes that the inclusion of digital assets in the accounting rules is a significant step forward.
FASB’s Decision Comes at a Difficult Time
The FASB decision on fair value accounting for cryptocurrencies comes at a challenging time for the crypto industry. The sector is still recovering from the collapse of FTX and other crypto companies, which led to criticism of regulatory oversight.
FASB’s Previous Caution
In the past, FASB had been cautious about addressing cryptocurrency. However, the collapse of FTX and the attention it drew to the sector likely influenced FASB’s decision to move forward on the new rule.
Accounting Standards Update
The new accounting standards update will require companies to report qualifying crypto assets using the fair value accounting method. This is a change from current practice, where most companies report crypto assets as impaired intangible assets.
A Major Change
The inclusion of crypto in the accounting rules is a significant change. It provides clarity and a baseline for companies to follow when accounting for digital assets.