FASB Accounting Change Removes Bitcoin Impairment Barrier for Corporations

MicroStrategy has reported over $2B in bitcoin impairment losses, giving a false impression of reduced value.
FASB voted to allow fair-value accounting for digital assets, eliminating impairment losses.
This change eliminates a barrier to corporate bitcoin adoption per Michael Saylor.
MicroStrategy is expected to adopt the new accounting rules as soon as allowed, before 2025.
U.S. companies may be more open to holding digital assets given improved accounting impacts.

coindesk.com

Relevant topic timeline:

9/6/2023

FASB Says Crypto Assets Should Be Marked at Current Values

The Financial Accounting Standards Board (FASB) is drafting a new accounting standard that requires companies to use a fair-value approach for cryptocurrency, measuring digital assets based on their market trading value, which is expected to be approved by the end of the year.

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.

9/15/2023

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

The Financial Accounting Standards Board (FASB) plans to introduce new fair-value accounting rules for Bitcoin and other cryptocurrencies, which could provide clarity and eliminate ambiguity for companies interested in holding digital assets, potentially leading to increased adoption and long-term price appreciation.

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 9/8/2023, 9:30:00 AM