FASB Takes Step Toward Fair Value Accounting of Cryptoassets
As part of its ongoing work on the disclosure of cryptoassets, the Financial Accounting Standards Board (FASB) has tentatively decided to use fair value to measure certain cryptoassets in financial reporting.
At an Oct. 12 meeting, FASB tentatively made a decision to require an entity to:
- Measure cryptoassets at fair value using FASB ASC Topic 820, Fair Value Measurement
- Recognize increases and decreases in fair value in comprehensive income each reporting period
- Recognize certain costs incurred to acquire cryptoassets as expenses unless the entity follows specialized industry measurement guidance
FASB launched its project on the disclosure of cryptoassets on Dec. 15, 2021. This past summer, FASB stated that the project would be limited to cryptoassets that:
- Meet the definition of intangible asset as defined in the Codification Master Glossary
- Do not provide the asset holder with enforceable rights to, or claims on, underlying goods, services or other assets
- Are created or reside on a distributed ledger or blockchain
- Are secured through cryptography
- Are fungible
FASB said that the Board will consider presentation, disclosure and transition at a future meeting.