US Financial Accounting Standards Board Approves New Rules to Improve Crypto Accounting Practices
Summary:
New rules approved by the US Financial Accounting Standards Board (FASB) will improve the accounting practices for companies holding cryptocurrencies. Analysts believe these changes will benefit MicroStrategy and other firms, allowing them to report their digital asset holdings without incurring impairment losses. The new rules, effective from 2025, will enable companies to report crypto holdings at fair value, reflecting current market prices. MicroStrategy is expected to adopt the new rules in advance, potentially valuing its BTC holdings at $8.8 billion by April 2024. CEO Michael Saylor sees the accounting change as a positive catalyst for Bitcoin adoption.
US Financial Accounting Standards Board (FASB) has approved new rules for cryptocurrencies, aiming to address poor optics associated with companies holding digital assets. Analysts from Berenberg Capital suggest that these changes will particularly benefit companies like MicroStrategy, allowing them to report their digital asset holdings quarterly without incurring impairment losses. The new rules, effective from 2025, will enable firms to report crypto holdings at fair value, reflecting current market prices and any price rebounds. MicroStrategy, the world's largest corporate holder of BTC, is expected to adopt the new rules in advance, resulting in a valuation of around $8.8 billion for its BTC holdings by April 2024. CEO Michael Saylor has previously criticized the FASB's treatment of crypto and believes the accounting change will encourage more tech companies to adopt BTC investment strategies.
Published At
9/7/2023 4:53:05 AM
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