Standard setter launches new rule on crypto accounting

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Companies currently classify crypto assets such as bitcoin as indefinite-lived intangible assets, similar to intellectual property such as trademarks. Photo: Stefani Reynolds/Agence France-Presse/Getty Images

The Financial Accounting Standards Board has voted to propose a new rule on cryptocurrency accounting and disclosure, creating new guidelines for companies holding these assets and providing more details for investors.

The United States does not have specific accounting or disclosure rules for crypto assets. The FASB, which sets accounting standards for U.S. public and private companies, announced on Wednesday that it would release a proposal that would require companies to use fair value accounting for bitcoin and other crypto assets.

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Businesses and accountants have long been calling for the move because it would allow them to recognize losses and gains immediately and treat digital assets as financial assets rather than indefinite-lived intangibles.

Companies currently classify crypto assets as indefinite-lived intangible assets, similar to intellectual property such as trademarks. Companies must review the value of these assets at least once a year and depreciate it if it falls below the purchase price. If the value increases, companies can only realize a gain when they sell the asset, but not if they continue to hold it.

Write to Mark Maurer at [email protected]

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