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The US Financial Accounting Standards Board (FASB) has announced its first crypto accounting rules, marking a significant change in the way companies record cryptocurrency assets.
The new rules, which record the ups and downs of crypto assets, will affect companies such as enterprise software maker MicroStrategy, electric car maker Tesla and payment processor Block.
Under the new rules, crypto companies and other companies holding Bitcoin or Ethereum will be required to register their coins at fair value. This measurement technique aims to capture the most current value of these assets, with changes in fair value recorded in net income.
Previously, companies could only record the lowest values of crypto assets, which was criticized for being a one-sided practice. Given the volatile nature of cryptocurrencies, companies often reduce the value of their assets, which reduces their earnings.
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The new rules will go into effect for both public and private companies with fiscal years starting after December 15, 2024, meaning 2025 for calendar year-end companies. However, companies have the option to comply with the rules before the deadline.
Until now, there have been no specific US accounting rules for how companies should recognize and measure the digital currencies they own. The crypto industry has asked the FASB to write the rule three times since 2017, but the accounting body has so far resisted.
Under the new rules, companies will have to make a separate entry for crypto assets as an item on their balance sheets. They will also need to disclose significant crypto holdings and any restrictions on those holdings in their footnotes for each reporting period. They will be required to reconcile or disclose changes in the opening and closing balances of crypto assets by category on an annual basis.
Former CEO of MicroStrategy, Michael Saylor, said the following in his statement:
<blockquote>
 “The FASB has formally adopted Fair Value Accounting for Bitcoin for fiscal years beginning after December 15, 2024. “This improvement in accounting standards will facilitate the adoption of BTC as a treasury reserve asset by companies around the world.”
</blockquote>
*This is not investment advice.
 Continue Reading: <a href="https://en.bitcoinsistemi.com/very-critical-step-for-the-industry-in-the-us-cryptocurrency-accounting-rules-are-coming-michael-saylor-commented/" rel="noopener noreferrer nofollow">Very Critical Step for the Industry in the US: Cryptocurrency Accounting Rules Are Coming – Michael Saylor Commented</a>

Very Critical Step for the Industry in the US: Cryptocurrency Accounting Rules Are Coming – Michael Saylor Commented

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