FASB Mulls Fair-Value Accounting for Crypto Holdings: Report

Fair-value accounting for crypto will encourage companies to put bitcoin on their balance sheet, according to Michael Saylor.

AccessTimeIconOct 13, 2022 at 9:48 a.m. UTC
Updated May 9, 2023 at 3:59 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Financial Accounting Standards Board (FASB) has said that firms should use fair-value accounting methods for cryptocurrencies likes bitcoin (BTC) and ether (ETH), according to a Wall Street Journal report.

Fair-value accounting of crypto would allow companies to report losses and gains immediately and treat the asset class as traditional financial assets. Currently, digital assets are considered as indefinite-lived intangible assets that only require reporting once a year.

In May, the FASB unanimously voted to review accounting rules for crypto following pressure from the likes of former MicroStrategy (MSTR) CEO Michael Saylor, who said that current rules discourage companies from holding bitcoin on their balance sheets.

Saylor tweeted his support for the new accounting system, calling it a major milestone on the road to institutional bitcoin adoption.

MicroStrategy currently holds 130,000 bitcoin valued at $2.47 billion, with the position at an unrealized loss of $1.51 billion.

“We expect the disconnect between the reported carrying value on our balance sheet and the fair market value of our bitcoin holdings to grow significantly over time,” MicrosStrategy CEO Phong Le said in a letter to the FASB last year, as quoted by WSJ.

The FASB will make likely make a decision before the end of the year, the report said.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Oliver Knight

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.