FASB Proposes Enhancements to Disclosures About Cash Equivalents and Clarifications to the Evaluation of Certain Digital Assets

The FASB has issued a proposed Accounting Standards Update (ASU), Statement of Cash Flows (Topic 230): Cash Equivalents — Disclosure Enhancement and Evaluation of Certain Digital Assets. The proposed ASU would amend ASC 230-10 to (1) require entities to annually disclose the significant components of cash equivalents and related amounts and (2) clarify whether certain digital assets can be classified as cash equivalents. The proposal is intended to increase the transparency of the composition of cash equivalents and reduce diversity in practice related to the presentation of certain digital assets as cash equivalents.

Although the proposed ASU would not change the current definition of cash equivalents, it would add disclosure requirements that apply to all entities that present assets as cash equivalents, regardless of whether they hold digital assets.

Comments on the proposed ASU are due by November 19, 2026. For more information, see the press release on the FASB’s Web site.