FASB Announces New Accounting Rules for Cryptocurrencies, Allowing Unrealized Gains/Losses on Corporate Balance Sheets

The FASB has announced new accounting rules for cryptocurrencies like Bitcoin, allowing unrealized gains/losses to be reported on balance sheets. This provides more clarity than previous rules.
The new FASB rules could encourage more corporate adoption of Bitcoin by eliminating previous accounting barriers and ambiguities.
Companies can now benefit from Bitcoin appreciation on their balance sheets without having to sell holdings.
The new rules allow investors to better gauge the financial health of companies holding Bitcoin.
While a Bitcoin ETF may improve access, the FASB rules provide guidance on managing crypto holdings, which could be more impactful.

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Relevant topic timeline:

8/28/2023

New tax rules for crypto in the US: Law Decoded

The United States Internal Revenue Service has proposed regulations for the sale and exchange of digital assets by brokers, aiming to simplify tax filings and prevent tax cheating, with the rules set to go into effect in 2026; meanwhile, several crypto commentators have criticized the new tax reporting rules.

9/7/2023

New Accounting Rules Help Companies Holding Crypto Like Tesla

The U.S. Financial Accounting Standards Board has voted to change how digital assets are valued, a move that could benefit companies, including Tesla and Bitcoin, that hold cryptocurrency.

9/8/2023

FASB Accounting Change Removes Bitcoin Impairment Barrier for Corporations

The Financial Accounting Standards Board (FASB) has voted to allow companies like MicroStrategy to report their bitcoin holdings without recognizing impairment losses if the cryptocurrency's price drops, eliminating the negative impact on the company's value.

9/24/2023

The Rapid Rise of Crypto: Governments Grapple with Regulation while Innovation Marches On

Cryptocurrency faces regulatory challenges that could shape its future, but despite these challenges, the industry holds promise with developments such as increased institutional adoption, central bank digital currencies (CBDCs), DeFi innovation, interoperability, and expected regulatory clarity.

9/26/2023

Taiwan Introduces New Cryptocurrency Regulations, Requiring Registration for Exchanges

Taiwan's Financial Supervisory Commission (FSC) has issued new rules and guidelines to protect cryptocurrency investors, including separating exchange treasury assets from customer assets and requiring foreign virtual asset service providers to obtain necessary approvals to operate in the country.

9/27/2023

Gensler Faces Criticism in House Hearing Over SEC's Crypto Custody Guidance

SEC Chairman Gary Gensler faced criticism during a House Financial Services Committee hearing regarding the SEC's policies and actions, including the issuance of Staff Accounting Bulletin (SAB) 121 on accounting and disclosure of crypto assets, without consulting prudential regulators or the Financial Accounting Standards Board (FASB). The bulletin, which requires disclosure of risks associated with digital asset custody, has faced opposition and accusations of being "regulation disguised as staff guidance." Issues such as the approval of spot Bitcoin exchange-traded funds and the SEC's stance on Grayscale's Bitcoin ETF application were also discussed.

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Posted 9/15/2023, 9:59:00 AM