Bitcoin and Cryptocurrency Alert from the US Financial Accounting Standards Board (FASB)!

The Financial Accounting Standards Board (FASB) has announced that companies will be primarily responsible for a new draft rule expected in the coming months. cryptocurrency He said they would have to disclose details about their assets.

FASB Says New Regulation Will Require Companies to Disclose Cryptocurrency Asset Details

The disclosure plan, outlined on Wednesday, is one of the last steps before a rule is proposed that, if approved, will fill a gap for companies with these assets and provide more information to investors.

Currently in the USA bitcoin and there are no specific accounting or disclosure rules for crypto assets. Businesses classify them as intangible assets of indefinite duration, similar to intellectual property such as trademarks.

Companies should review the value of such assets at least once a year and write off their value if they fall below the purchase price. If the value rises, companies can only record earnings when they sell the asset, but not if they continue to hold.

Setting accounting standards for public and private companies in the US, the FASB has made several key decisions in the past months regarding the scope of the crypto project and accounting for crypto assets. In August, it left out non-fungible tokens and certain stablecoins, detailing criteria for the assets it would include in the project.

Then, in October, he said companies should use fair value accounting to value Bitcoin and other crypto assets.

Companies and accountants have long struggled that this move would allow them to instantly recognize losses and gains and treat digital assets as financial assets rather than intangible assets of indefinite duration.

The FASB said in a statement today that it requires public and private companies to highlight the amount of cryptocurrency holdings in their financial statements separately from the amount of other intangible assets such as patents and trademarks. Companies will need to factor gains and losses in crypto assets into their net income.

The FASB said companies must disclose a table of key crypto-asset holdings by fair value, i.e. market price, at the end of each quarterly and annual period.

*Not investment advice.