Crypto companies and institutions holding crypto assets will be able to record the value of their crypto more realistically under accounting rule changes in the United States.
The Financial Accounting Standards Board (FASB) finalized the new rules on Dec. 13. The FASB is the organization that sets accounting and reporting standards for the U.S. Generally Accepted Accounting Principles (GAAP). GAAP-standard financial reports are required from companies that trade on public markets in the United States.
Related: New crypto accounting guidelines could ‘smooth the way’ for adoption
Under current practice, crypto is considered an indefinite-lived intangible asset and therefore is subject to impairment. This means the value of the crypto assets is decreased on the books if they lose value in an accounting period, and the recorded value cannot be increased until the assets are sold, even if the value of the holdings goes up before then.
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
This is a disadvantage in the volatile crypto market, as it could make a company’s assets appear to be worth less than their market value. The FASB said in its Accounting Standards Update:
“Accounting for only the decreases, but…
