CDS Crypto News FASB Crypto Rules Amended, Cryptocurrency Asset Standard Approved
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FASB Crypto Rules Amended, Cryptocurrency Asset Standard Approved

It was reported that the cryptocurrency asset standard was approved under the FASB crypto rules regulation.

FASB Crypto Rules Amended, Cryptocurrency Asset Standard Approved

Crypto News – During a meeting on Wednesday, the Financial Accounting Standards Board approved its much-anticipated cryptocurrency asset standard, quantifying the fluctuations in the value of digital currencies owned by businesses like Bitcoin.

FASB Crypto Rules Amended, Cryptocurrency Asset Standard Approved

Cory Klippsten, known for his interest in cryptocurrency, especially Bitcoin, also shared a post on his X account about the new regulations.

After initially focusing on cryptocurrencies like bitcoin rather than a wider range of assets like NFTs, the FASB’s prior research on digital assets’ scope was narrowed, and an exposure draft was published in March. FASB also made the decision to employ fair value measurement and had proposed, among other things, that organizations holding cryptocurrency assets falling under the project’s purview would afterward measure those assets at fair value and report changes in the fair value in net income on a period-by-period basis.

I know that some of our stakeholders noted that this is a more fulsome disclosure package than might typically be the case. But I do think that it’s important that we acknowledge that this asset class is pretty unique. It’s a relatively new asset class and trades in very unregulated markets, sometimes very thinly traded.

Putting together a really complete set of disclosures to help investors understand not only the fair value at the end of the period but also what’s going on during the period and to be able to better assess the risk exposure, that the types of disclosures that we’re going to be requiring are just absolutely necessary to get there. I’m really pleased with this set of disclosures. I think it’s going to help the investment community significantly.

Christine Botosan, FASB member

FASB was Requested to Comment in March

Organizations that adhere to U.S. Generally Accepted Accounting Principles (GAAP) are subject to the accounting and reporting rules defined by the FASB. The FASB Accounting Standards Codification was the subject of a request for comments from it in March. On September 6, the idea came up for discussion and a vote.

I know there will be some that are disappointed that we haven’t expanded the scope to address wrapped tokens and NFTs and whatnot, but I think intentionally keeping this project narrow has really allowed us to get this into the hands of investors sooner,

Sue Cosper, board member

FASB Announced a Tentative Decision in October

In October 2022, the FASB made a temporary ruling regarding fair value accounting for crypto assets. In the past, businesses had to continue recording crypto-related impairment losses, which happen when an asset abruptly loses value, even after the value of the digital asset has increased.

Companies with significant crypto holdings will see an increase in earnings volatility as a result of the new accounting approach, but they will also be able to recognize financial gains from rising crypto values. Companies have the option to start implementing fair-value accounting for their cryptocurrency right away.

It’s not very often that we can both take cost out of the system and improve the decision usefulness of information, and it makes it a really easy vote to do both of those.

FASB Crypto Rules Amended, Cryptocurrency Asset Standard Approved
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Lectertodd is 25 years old. She graduated from Çankaya University, Department of Psychology, in 2021. She actively works as a writer, translator, and editor for various websites. Moreover, she loves reading, researching, and learning new things.

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