FASB Releases Standard on Crypto Assets

The FASB has issued Accounting Standards Update (ASU) No. 2023-08, Accounting for and Disclosure of Crypto Assets. The ASU is being released in response to stakeholder feedback indicating that the current cost-less-impairment model of accounting for crypto assets does not result in decision-useful information “that reflects (1) the underlying economics of those assets and (2) an entity’s financial position.” Accordingly, under the ASU, all entities that hold crypto assets for which certain criteria are met must subsequently measure such assets “at fair value with changes recognized in net income each reporting period.” In clarifying its rationale for issuing the ASU, the Board indicates that, “[i]n addition to better reflecting the economics of crypto assets, measuring those assets at fair value will likely reduce cost and complexity associated with applying the current cost-less-impairment accounting model for many entities.”

For all entities, the ASU’s amendments will become effective “for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.” Entities are permitted to early adopt the standard “for both interim and annual financial statements that have not yet been issued (or made available for issuance).”

For more information, see the press release on the FASB’s Web site.