On December 13, 2023, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update that addresses the accounting for and disclosure of crypto assets. The objectives of the amendments are to provide investors and other capital allocators with more decision-useful information that better reflects the underlying economics of crypto assets within the scope and an entity’s financial position while reducing cost and complexity associated with applying cost-less-impairment accounting. The amendments in the ASU apply to all assets that meet all the following criteria:

  • Meet the definition of intangible asset as defined in the FASB Accounting Standards Codification
  • 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 based on blockchain or similar technology
  • Are secured through cryptography
  • Are fungible
  • Are not created or issued by the reporting entity or its related parties.

The amendments in this Update require that an entity measure crypto assets that are within the scope of the amendments at fair value each reporting period with changes in fair value recognized in net income. The amendments also require that an entity provide disclosures about significant holdings, contractual sale restrictions, and changes during the reporting period.

Transition and Effective Dates

The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If amendments are adopted in an interim period, they must be adopted as of the beginning of the fiscal year that includes that interim period.

To download the update, click here

Categories: Digital Assets, Guides