New US Accounting Rules for Crypto Assets Announced: Report
The Financial Accounting Standards Board (FASB), the organization responsible for setting accounting standards in the US, has approved new rules for measuring the value of crypto assets on a company’s balance sheet. The objective of these rules is to provide a more accurate assessment of the worth of these assets.
Under the new rules, companies that hold or invest significant amounts of Bitcoin, Ethereum, and other crypto assets must report their holdings at fair value. They also need to make a separate entry for their crypto assets in their balance sheets and disclose information about their significant holdings, restrictions, and reconciliation activity of crypto assets that were converted to cash.
The rules cover fungible crypto assets but exclude non-fungible tokens, stablecoins, and wrapped tokens. They will be mandatory for both public and private companies beginning after December 15th, 2024.
Hot Take
The new accounting rules for crypto assets signal a growing recognition of their importance in the business world. By requiring companies to report their crypto holdings at fair value, the rules aim to provide more transparency and accuracy in financial reporting. This move by the FASB further validates the legitimacy of cryptocurrencies as an asset class.
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