According to the Financial Accounting Standards Board (FASB), the first US accounting rule specific to cryptocurrencies requires companies to use a fair value approach, which requires certain digital assets to be valued at what they would be traded for in the markets .
At a Wednesday meeting, the board evaluated comments on the change and gave employees permission to draft a final version of the new accounting standard, effective for fiscal years beginning after December 15, 2024. The final version is expected to be approved in a written vote before the end of the year.
The FASB, a nongovernmental standard-setting body overseen by the US Securities and Exchange Commission (SEC), proposed the rule in March. The proposed changes depart from the standard practice of flagging these assets for their unrealized losses – which the industry sees as a barrier to wider crypto adoption. In particular, the inclusion of cryptocurrencies in accounting regulations means that companies will include profits and losses in their quarterly earnings reports.
“I think we’ve heard mostly from investors that allocate capital based on financial reports is that it gives them better information to make decisions and I wholeheartedly support that,” said Richard Jones, CEO.
The Board encourages companies to seek early adoption of the new standard.
Michael Saylor, the founder and former CEO of MicroStrategy (MSTR), tweeted that this development “removes a major barrier to corporate adoption of $BTC as a treasury asset.”
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