After December 15, 2024, New FASB Crypto Rules Will Be Mandatory

Crypto News – Long-awaited rules that the Financial Accounting Rules Board, a U.S. regulatory agency that establishes general accounting procedures, claims will enhance disclosure of specific cryptocurrency assets have been issued.

After December 15, 2024, New FASB Crypto Rules Will Be Mandatory

FASB Chairman Richard R. Jones made a statement on the new rules.

The new standard responds to feedback from stakeholders of all backgrounds who indicated that improving the accounting for and disclosure of crypto assets should be a top priority for the Board,

It will provide investors and other capital allocators with more relevant information that better reflects the underlying economics of certain crypto assets and an entity’s financial position while reducing cost and complexity associated with applying current accounting,

Jones

The new regulations allow companies holding certain cryptocurrencies on their balance sheets to employ fair-value accounting. Following the erstwhile accounting regulations known as the “indefinite-lived intangible asset accounting model,” businesses were required to record cumulative impairment charges after using the original acquisition price.

Rules May Apply Earlier for Companies’ Unreleased Financial Statements

Companies may apply the new rules earlier for financial statements that have not yet been released, but they will take effect for fiscal years starting after December 15, 2024. They pertain to intangible assets that “do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets; are created or reside on a distributed ledger based on blockchain or similar technology; are secured through cryptography; are fungible; are not created or issued by the reporting entity or its related parties.”

In addition to better reflecting the economics of crypto assets, measuring those assets at fair value will likely reduce cost and complexity associated with applying the current cost-less-impairment accounting model for many entities,

the new guidelines