FASB Approves New Accounting Standards for Crypto Holdings

Bitcoin Crypto Regulation Michael Saylor
Last updated:
Author
Author
Jai Pratap
About Author

Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: Pixabay

The Financial Accounting Standards Board (FASB) in the United States has given unanimous approval to new accounting standards for disclosure of cryptocurrency holdings. 

The FASB, a non-governmental entity overseen by the U.S. Securities and Exchange Commission (SEC), introduced these rules in March, departing from the traditional practice of valuing cryptocurrency assets solely based on unrealized losses. 

The implementation of these rules is scheduled to commence for fiscal years starting after December 15, 2024, pending final approval through a written vote.

This change was viewed as a barrier to wider corporate adoption of cryptocurrencies.

Under the new standards, companies will be required to adopt a fair-value approach, assessing certain digital assets based on their market trading prices.

New Rules will Impact how Companies Report Crypto Holdings

The new rules set by FASB will impact how companies report their financial performance, with gains and losses related to cryptocurrencies becoming a standard part of their quarterly income reports.

Richard Jones, Chairman of the FASB, expressed support for the move, noting that it is aimed at providing investors with better information for decision-making.

One notable aspect of this development is its potential to remove obstacles to the corporate adoption of cryptocurrencies as treasury assets. 

Michael Saylor, the founder and former CEO of MicroStrategy, commented on this aspect, stating that it eliminates a significant impediment to corporate adoption of Bitcoin.

FASB Encourages Companies to Consider Early Adoption

While the change in accounting methodology will lead to increased earnings volatility for companies holding substantial amounts of cryptocurrency, it will also enable them to record financial recoveries as cryptocurrency prices rise. 

This rule change will particularly impact companies like Coinbase, investment firms, and major corporations such as MicroStrategy and Tesla, which hold significant cryptocurrency portfolios.

To accommodate these changes, cryptocurrencies will now be categorized as “intangible assets” in financial accounts, reflecting their evolving role in the financial landscape.

More Articles

Altcoin News
Further Punishment Awaits South Korean Civil Servant Who Stole $416k to Buy Crypto
Tim Alper
Tim Alper
2025-02-17 03:00:00
Cryptonews Reports
Lawyer Confirms US Has Dropped Vinnik Case, Client ‘Has a Clean Slate’
Tim Alper
Tim Alper
2025-02-16 23:30:00
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors