The Financial Accounts Standards Board in the US has revised rules for crypto asset valuation, which will impact crypto firms and other companies holding such assets.
Crypto firms in the US are set to benefit from new accounting rules. The Financial Accounts Standards Board (FASB), has created the new crypto asset valuation rules. It has published a detailed Accounting Standards Update. The regulator said the new rules result from detailed consultations for a year. It said the rules would affect all entities holding such assets.
The rule would ensure crypto assets get valuations at fair value. The accounting books measure a crypto asset’s losses in the current system. Moreover, the asset’s value can only increase in the books once its holder sells it. It cannot increase even when its value goes up. The current nature of accounting standards could be a disadvantage for crypto asset holders in the volatile market.
The FASB said, “Accounting for only the decreases, but not the increases, in the value of crypto assets in the financial statements until they are sold does not provide relevant information that reflects (1) the underlying economics of those assets and (2) an entity’s financial position.”
As a result, the fair market value of crypto assets can now go to the companies’ books in each accounting period. Meanwhile, insiders from the crypto industry hailed the FASB decision. A few pointed out that corporations may now hold Bitcoin as a corporate treasury reserve asset. Besides, the step would be a positive development for crypto firms in the US. It could lead to wider crypto adoption in the country.
On the other hand, the US is currently in the spotlight for one of its regulators, the SEC, which is yet to approve the spot crypto ETFs. The ETF applications, filed by several global firms, could change the landscape of the crypto industry.
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