FASB introduces crypto accounting rules for fair value reporting
The post FASB introduces crypto accounting rules for fair value reporting appeared on BitcoinEthereumNews.com.
The Financial Accounting Standards Board has released its first crypto accounting rules, revolutionizing how companies report cryptocurrency holdings. Under these new guidelines, businesses holding Bitcoin (BTC) or Ethereum (ETH) must now value these assets at their current market price, a method known as fair value measurement. Previously, companies could only report the depreciated value of their crypto assets, often leading to diminished earnings reports due to the volatile nature of cryptocurrencies. This one-sided approach has been a point of contention for businesses heavily invested in digital currencies. The new rules aim to provide a more balanced and accurate reflection of a company’s financial health by allowing them to record both the highs and lows of their crypto holdings in their net income. The rules are set to take effect for fiscal years beginning after Dec. 15, 2024, although early adoption is permitted for both public and private companies. Edward McGee, CFO of Grayscale Investments, lauded the update as a holiday gift of common sense accounting. Before the Financial Accounting Standards Board (FASB) decision, non-investment companies followed a practice guide by the American Institute of Certified Public Accountants, treating cryptocurrencies as intangible assets. This meant companies could only report gains upon selling the assets, and they had to write down any decreases in value permanently. Michael Saylor and David Marcus address decision Michael Saylor, a prominent advocate for Bitcoin and founder of MicroStrategy, expressed his enthusiasm over the FASB’s decision on Twitter. He highlighted the decision as a pivotal upgrade in accounting standards. FASB has officially adopted Fair Value Accounting for #Bitcoin for fiscal years beginning after Dec 15, 2024. This upgrade to accounting standards will facilitate the adoption of $BTC as a treasury reserve asset by corporations worldwide. https://t.co/4GOuji6cr0 — Michael Saylor⚡️ (@saylor) December 13, 2023 Echoing Saylor’s sentiments, former…
Filed under: News - @ December 14, 2023 11:20 pm