According to Mark Maurer from the Wall Street Journal, the Financial Accounting Standards Board (FASB) has proposed new crypto rules for 2023 on how companies should report and share information about their cryptocurrency holdings with investors. The new rules would require companies to use a fair-value system to report the value of their Bitcoin and other crypto assets.
This new proposal would let companies recognize losses and gains and treat digital assets as monetary assets rather than something that might last forever. Currently, companies treat crypto assets like a trademark. They have to check how much the asset is worth at least once a year and write down if it’s worth less than what they paid. They can only record a gain if they sell the asset.
FASB wants to ensure investors have clear information about a company’s cryptocurrency holdings. However, the new rule wouldn’t apply to people who create or issue new cryptocurrency tokens or those who use wrapped tokens. In August 2022, the FASB also decided to exclude nonfungible tokens and certain stablecoins from the project.
Chairman Rich Jones from FASB has said that this new rule will only affect a small number of companies since only some businesses outside the crypto industry hold cryptocurrency. For example, only a few public companies, such as Tesla and MicroStrategy, own cryptocurrency on their balance sheets compared to the many companies that own traditional assets like stocks and bonds. Tesla didn’t say anything about the new rules. Still, MicroStrategy’s Chief Financial Officer, Andrew Kang, thinks they are a great idea.
FASB added this project to their agenda in May 2022 and quickly plans to release a proposal by late March 2023 and give the public 75 days to give their opinion. After that, they could make the new crypto rules official by the end of 2023.
