FASAB offers new guidance on seized and forfeited digital assets

The Federal Accounting Standards Advisory Board (FASAB) issued a technical bulletin Friday aimed at bringing clarity to federal government accounting standards related to seized and forfeited digital assets.

Technical Bulletin (TB) 2024-1, Seized and Forfeited Digital Assets, states that paragraphs 57–78 of Statement of Federal Financial Accounting Standards (SFFAS) 3, Accounting for Inventory and Related Property, should apply to seized and forfeited digital assets.

“Staff received several requests for board guidance clarifying existing SFFAS 3 reporting requirements regarding the unique characteristics of digital assets, which the board did not consider when developing SFFAS 3,” Monica Valentine, executive director of FASAB, said in a news release.

The TB also:

• Clarifies that reporting entities should treat central bank digital currencies as monetary instruments and all other digital assets as nonmonetary property when applying the requirements of SFFAS 3; and

• Provides clarifying guidance for measuring market value and applying SFFAS 3 disclosure requirements for seized and forfeited digital assets.

Digital assets reporting is a growing area of focus for standard-setting organizations. In an effort to bring more clarity to nongovernmental reporting, the AICPA recently released an update to its digital assets practice aid, featuring a Q&A format to help with assessment of assets.

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