The Financial Accounting Standards Board (FASB) has voted unanimously to change the way companies account for and disclose their holdings of cryptocurrencies such as Bitcoin and other digital assets. The new rules, which will come into effect in 2025, aim to provide greater transparency to investors and other financial statement users about these volatile assets. Companies will be required to account for digital assets at fair market value, with gains and losses flowing through the income statement.
The rules also expand disclosure requirements, including details on the cost basis of major cryptocurrency holdings, restrictions on selling the assets, and a reconciliation of crypto asset activity from opening to closing balances during the period. The Grayscale Bitcoin Trust, which holds over $16 billion worth of BTC, has not disclosed the on-chain addresses of the trust despite publicly reporting balances.
The implementation of fair value accounting for Bitcoin is expected to remove a major obstacle to corporate adoption of BTC as a treasury asset. This change is seen as positive for Bitcoin, as cash-rich companies now have a way to insure their bond portfolios against debasement. The FASB's final rules on the matter incorporate feedback from over 80 comment letters received during a public comment period, completing a standard-setting process that began in July 2022.
All Comments