New accounting guidelines passed by the Financial Accounting Standards Board (FASB) will require companies to use a “fair value” methodology that requires cryptocurrencies be valued according to market prices.<\/p>\n
The new guidelines, the first accounting rule<\/a> specifically for cryptocurrencies in the US, received a unanimous vote of approval from the FASB with the final draft expected later in the year. The standards are expected to take effect starting December 15, 2024, after final approval of the final draft goes to a written vote.<\/p>\n The regulations were introduced in March<\/a> by the FASB, a non-governmental organization regulated by the U.S. Securities and Exchange Commission (SEC), as a move to break from the custom of valuing bitcoin and other digital assets based on unrealized losses.<\/p>\n The implementation of the new guidelines will see companies disclose their cryptocurrency holdings by making crypto gains and losses a part of their quarterly reports.<\/p>\n The disclosure will be made at fair value, which captures the most recent value of an asset. While the new standard will add volatility to the profitability of organizations that are significantly involved in cryptocurrencies, the ability to report recoveries is seen as an improvement over the existing practice.<\/p>\n Companies will be able them to instantly recognize losses and gains and treat digital assets like traditional financial assets rather than as indefinite-lived intangible assets.<\/p>\n The implementation and adherence to the accounting rules is expected to break the barrier that is believed to have slowed down the adoption of crypto, especially among corporate companies, says Microstrategy co-founder and former CEO Michael Saylor.<\/p>\n Fair value accounting is coming to #Bitcoin<\/a>. This upgrade to FASB accounting rules eliminates a major impediment to corporate adoption of $BTC<\/a> as a treasury asset.https:\/\/t.co\/MjVzUJRVjX<\/a><\/p>\n — Michael Saylor⚡️ (@saylor) September 6, 2023<\/a><\/p><\/blockquote>\n\n