Digital assets addressed by FASAB

The prevalence of accounting standards that include digital assets is on the rise, a trend that continued Monday with a federal government standards board taking action.

The Federal Accounting Standards Advisory Board (FASAB) released an exposure draft of a proposed technical bulletin, Seized and Forfeited Digital Assets, intended to clarify existing guidance in Statement of Federal Financial Accounting Standards (SFFAS) 3, Accounting for Inventory and Related Property.

“Staff received numerous requests for board guidance addressing SFFAS 3 reporting requirements for seized and forfeited digital assets,” FASAB Executive Director Monica Valentine said in a news release. “This proposal would clarify existing guidance for the unique characteristics of seized and forfeited digital assets, which the board did not consider when developing SFFAS 3.”

The technical bulletin, which is open for public comment through April 18, would further clarify that, with the exception of central bank digital currencies, reporting entities should treat digital assets as nonmonetary property when applying the requirements of SFFAS 3. It also would provide clarifying guidance for measuring market value and applying SFFAS 3 disclosure requirements for seized and forfeited digital assets.

The IRS added a digital asset question to several new forms for the 2023 tax year, and the AICPA’s Assurance Services Executive Committee recently issued an exposure draft of a framework for stablecoin issuers to present information.

“I think we’re starting to see these digital assets be more incorporated and become not just mainstream, but being mixed with more traditional assets,” Boomer Consulting’s Amanda Wilkie said during a recent JofA technology roundtable.

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