On Wednesday, the US body responsible for setting accounting standards voted unanimously to introduce new accounting guidelines for companies with significant cryptocurrency holdings.
After indicating support last year, the Financial Accounting Standards Board (FASB) has taken the next step toward codifying a requirement that companies report their cryptocurrency assets at their fair value. An approach designed to reflect the assets’ most up-to-date worth.
Crypto Accounting to Judge Assets at “Fair Value”
Previously, the prevailing model reflected only decreases in asset value, not increases, until the asset’s sale. The update aims to measure crypto assets at fair value, capturing both rises and falls in value. In doing so, the FASB believes it provides a more accurate picture of an entity’s financial position.
The amendment would also require detailed disclosures about the types and changes in crypto asset holdings. The aim here is to reduce complexity and better align with the needs of investors.
Learn more about how crypto taxes work in the United States: The Ultimate US Crypto Tax Guide for 2023
Companies will need to implement these fair value rules in fiscal years beginning after December 15, 2024. Those following the calendar year will adopt them in 2025. Although, companies can apply the rules immediately.
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Author: Josh Adams
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