- FASB has approved accounting regulations for cryptocurrencies like Bitcoin and Ethereum.
- The regulations will mandate businesses to report digital assets at fair market value.
- MicroStrategy’s CFO believes fair-value reporting will offer investors a more pertinent perspective.
The Financial Accounting Standards Board (FASB) in the United States has approved accounting regulations for leading cryptocurrencies such as Bitcoin and Ethereum, as per a Bloomberg report on September 6. Michael Saylor, the founder of MicroStrategy, lauded this development on Twitter, asserting that the FASB’s decision to allow fair value accounting for Bitcoin will remove obstacles previously deterred corporations from integrating Bitcoin
Saylor’s viewpoint is echoed by many within the crypto community. Numerous users have voiced their approval of the accounting regulations. One Bitcoin advocate stated that fair value accounting propels the “natural evolution of the outdated financial system to embrace Bitcoin.” Jeff Rundlet, the head of accounting strategy at Cryptio, a leading accounting software firm, concurred that these regulations are a step in the right direction.
It’s a great step forward for the entire crypto market. I think it’s a great step toward mainstream adoption. I can see finalizing this proposal to help large corporations that are maybe scared to hold crypto on their balance sheet because they’re scared of the technical complexities.
The forthcoming regulations, slated for implementation in 2025, will mandate businesses possessing digital assets to report their investments at fair market value, thereby providing a true representation of the asset’s present value. Over the past few months, corporations and accountants have consistently communicated to the Financial Accounting Standards Board that the capacity to document value recoveries will significantly improve existing procedures, notwithstanding the volatility in financial returns.
In May, Andrew Kang, the Chief Financial Officer of MicroStrategy, reacted to the initial proposal of the Financial Accounting Standards Board (FASB) by asserting that the fair-value reporting of cryptocurrencies would empower them to offer investors a more pertinent perspective of their financial standing and the economic worth of their Bitcoin assets. He emphasized that this would lead to well-informed investment and capital distribution decisions.
