FASB says that putting bitcoin on a company’s balance sheet will be more likely if fair-value accounting is used for cryptocurrencies.
A Wall Street Journal report says that the Financial Accounting Standards Board (FASB) has said that companies should use fair-value accounting methods for cryptocurrencies like bitcoin (BTC) and ether (ETH).
Fair-value accounting for crypto would let companies report losses and gains right away and treat the asset class like traditional financial assets. At the moment, digital assets are thought of as intangible assets that last forever and only need to be reported once a year.
In May, the FASB voted unanimously to review accounting rules for crypto. This was in response to pressure from people like former MicroStrategy (MSTR) CEO Michael Saylor, who said that current rules discourage companies from holding bitcoin on their balance sheets.
Saylor tweeted that he liked the new accounting system and that it was a big step toward getting institutions to use bitcoin.
MicroStrategy has 130,000 bitcoins worth $2.47 billion, which is a loss of $1.51 billion that hasn’t been realized yet.
In a letter to the FASB last year, MicrosStrategy CEO Phong Le said, “We expect the difference between the reported carrying value on our balance sheet and the fair market value of our bitcoin holdings to grow by a large amount over time.” WSJ reported that Le said this in a letter to the FASB.
According to the report, the FASB will probably decide before the end of the year.
