The Financial Accounting Standards Board (FASB) took a step closer to establishing a standard on Wednesday by recommending that businesses use fair-value accounting to determine the value of bitcoin and other digital assets. Because there are no detailed accounting or transparency regulations governing bitcoin assets, corporations categorize them as intangible assets with an indeterminate life span, much like intellectual property such as trademarks. 

At least once a year, businesses must examine the value of these assets and write them down if it falls below the original acquisition price. If the asset's value increases, companies can only report a profit when they sell it rather than keep it.
<h2>FASB Settles Fair-Value Accounting</h2>
The FASB should embrace fair-value accounting so businesses and accountants can instantly recognize losses and gains and treat digital assets like financial assets. The fair-value accounting technique would be required rather than a choice for businesses, according to the FASB, which stated on Wednesday that it better depicts the economics of crypto assets.

We've heard from investors that they want transparency through disclosure, and the only way to get to that is fair value," board member Gary Buesser said.
<h2>New Guidelines to be Launched For Crypto Assets Accounting</h2>
For years, businesses and investors have urged the FASB to establish guidelines for recording and disclosing cryptocurrency assets. The organization that sets accounting standards began investigating whether to create new regulations in December. It added a crypto project to its technical plan in May, establishing its rule-making objectives.

Phong Le, chief executive officer of MicroStrategy Inc., claims that the way firms are now required to account for digital assets leads to preparing financial statements that do not effectively reflect the outcomes of their operations or financial position.

In August, the FASB provided a list of the assets that would meet the criteria for inclusion in its cryptocurrency initiative, leaving out non-fungible tokens (NFTs) and some stablecoins. The board will then decide what information must be provided in asset declarations and how businesses should inform investors.

FASB Settles On Fair-Value Accounting For Measuring Crypto Assets

FASB took a step closer to establishing a standard on Wednesday by recommending that businesses use fair-value accounting to determine the value of bitcoin and other digital assets.

Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.

FASB Settles On Fair-Value Accounting For Measuring Crypto Assets

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