The Financial Accounting Standards Board (FASB) has released a new Accounting Standards Update (ASU) aimed at improving the accounting and disclosure of specific crypto assets. This update comes in response to feedback from stakeholders who have emphasized the need for better accounting practices in the crypto asset space.
The ASU covers all assets defined as intangible assets in the FASB Accounting Standards Codification. These assets must originate or exist on a blockchain-based distributed ledger, be secured through cryptography, be fungible, and not be designed or issued by the reporting entity or its related parties.
Under the new standards, entities will be required to measure certain crypto assets at fair value each reporting period, with changes in fair value recognized in net income. Additionally, entities will need to disclose significant crypto asset holdings, contractual sale restrictions, and changes during the reporting period.
The FASB Chair, Richard R. Jones, highlighted that the update aims to provide investors and capital allocators with more relevant information that reflects the underlying economics of certain crypto assets and an entity’s financial position. The update also aims to reduce the cost and complexity associated with applying current accounting practices.
The ASU will be effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.
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| Information | Details |
|---|---|
| Geography | North America |
| Countries | |
| Sentiment | very positive |
| Relevance Score | 1 |
| People | Richard Jones |
| Companies | Financial Accounting Standards Board (FASB) |
| Currencies | None |
| Securities | None |
