By Susie Violet Ward · Forbes · 20 December 2023
In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-08, changing how companies account for certain crypto assets such as bitcoin. Instead of recording them at cost less impairment, companies would measure them at fair value each reporting period, with changes recognised in net income, and make new disclosures about their holdings. The rules applied to fiscal years beginning after 15 December 2024, with early adoption allowed.
The article presents the change as a gain in transparency and as more favourable to companies with appreciating holdings, such as MicroStrategy and Tesla, which had struggled under the previous model. It also notes the challenges, including determining fair value for assets traded across many exchanges and deciding which tokens fall within the update’s narrow scope, which covers fungible intangible assets created or residing on a distributed ledger.