More firms set to add Bitcoin to balance sheets after major rule change
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Bitcoin (BTC) and crypto may soon see another mass wave of adoption by United States-based firms after a new accounting rule change that lets companies more accurately reflect the value of their crypto holdings. Cory Klippsten, the CEO of Bitcoin-only exchange Swan Bitcoin, told Cointelegraph that Bitcoin-holding companies like MicroStrategy and Tesla, which both had to report impairment on their holdings, “can now more accurately reflect their Bitcoin investments’ true value.” “This change is crucial for a broad range of companies, not just those primarily focused on Bitcoin, encouraging more mainstream corporate adoption.” The new Financial Accounting Standards Board (FASB) rules released on Dec. 13 that come into effect in December 2024 see the estimated market value of crypto held by companies represented accurately on companies’ accounting books by allowing them to record when they’re holding assets at a gain. Previously, crypto held by companies was subject to impairment only when the value of crypto decreased on the books, which could not be increased until sold, even if its value increased while being held. Klippsten added that companies could now use Bitcoin as a “strategic financial asset,” as they would be able to report on their value gains and losses, a feature that could help drive adoption. Matrixport research head and Crypto Titans author Markus Thielen told Cointelegraph that the rule change “underscores the palpable corporate demand” for incorporating crypto into a firm’s accounting. Related: BlackRock revises spot Bitcoin ETF to enable easier access for banks “Digital assets are increasingly becoming a crucial component of financial statements,” said Thielen, adding that companies will now have more confidence when valuing their crypto holdings. “This signals a resounding confirmation that digital assets have firmly established themselves in the financial landscape.” Others were also excited by the rule change. David Marcus, co-creator of Facebook’s…
Filed under: News - @ December 14, 2023 7:19 pm