FASB moves toward a standard for fair value accounting of cryptoassets

By Bryan Strickland

A tentative board decision by FASB would use fair value to measure certain cryptoassets in financial reporting.

As part of an ongoing project focused on the disclosure of cryptoassets, FASB tentatively decided in an Oct. 12 meeting to require an entity to:

  • Measure cryptoassets at fair value, using the guidance in FASB ASC Topic 820, Fair Value Measurement.
  • Recognize increases and decreases in fair value in comprehensive income each reporting period.
  • Recognize certain costs incurred to acquire cryptoassets, such as commissions, as an expense (unless the entity follows specialized industry measurement guidance that requires otherwise).

FASB launched a project focused on the disclosure of cryptoassets on Dec. 15, 2021, to consider changes to accounting standards for cryptoassets.

During an Aug. 31 meeting, FASB defined what types of cryptoassets would be included in the scope of the project, stating that the project would be limited to cryptoassets that:

  • Meet the definition of intangible asset as defined in the Codification Master Glossary.
  • 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 or "blockchain."
  • Are secured through cryptography.
  • Are fungible.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.

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