The Financial Accounting Standards Board (FASB), the organization that sets accounting standards in the US, is reportedly green-lighting new rules for measuring the value of crypto assets on a company’s balance sheet.
According to Bloomberg, the FASB on Wednesday unanimously voted in favor of new rules that will require companies that hold or invest significant amounts of Bitcoin (BTC), Ethereum (ETH) and other crypto to report their holdings at fair value.
The objective is to provide an updated and more accurate measure of the asset’s worth.
Under the new rules, companies have to make a separate entry for their crypto assets in their balance sheets.
They also need to disclose their significant holdings of crypto, restrictions on these assets and information on the reconciliation activity of crypto assets that were received as payment and immediately converted to cash.
The crypto assets covered by the rules must also be fungible, or interchangeable, with other assets, which means that non-fungible tokens like NFTs are excluded. The rules don’t cover stablecoins or wrapped tokens.
The new set of accounting rules will be mandatory for both public and private companies for fiscal years beginning after December 15th, 2024, and will cover interim periods within those years. Companies are allowed to apply the rules early though once the FASB publishes them this year.
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