FASB issues ASU on accounting and disclosure of certain crypto assets

Dec 20, 2023
Digital assets
Financial reporting Cryptocurrency Audit Intangibles & other assets

On December 12, 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The ASU addresses feedback from stakeholders who indicated that the FASB should give priority to improving the accounting for and disclosure of crypto assets. The aim of the ASU is to provide investors with information that better reflects the economic effect of certain crypto assets and an entity’s financial position.

The ASU requires an entity to measure crypto assets within its scope at fair value with changes in fair value recognized in net income. The ASU also attempts to improve the information entities provide to investors about their crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes since the last reporting period.

The ASU applies to holdings of assets that meet all the following conditions:

  • 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

Effective date

The ASU is 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 the ASU is adopted in an interim period, it must be adopted as of the beginning of the fiscal year that includes that interim period.

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