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FASB Proposes Guidance on Crypto Assets (March 27, 2023)

Heads Up | Volume 30, Issue 3
March 27, 2023
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FASB Proposes Guidance on Crypto Assets


FASB Proposed Accounting Standards Update (ASU), Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets.
For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”
Currently, only entities that are within the scope of the investment-company guidance in ASC 946 and certain broker-dealers are permitted to measure crypto assets at fair value.
Wrapped tokens are tokenized representations of another crypto asset that have additional features not contained in the original version, such as the ability to transact on a different blockchain (i.e., wrapped bitcoin that can be transacted on the Ethereum blockchain).
SEC Regulation S-X, Rule 5-03, “Statements of Comprehensive Income.”
According to the proposed ASU, the phrase “nearly immediately” means “a short period of time that is expected to be within hours or a few days, rather than weeks.”
The significance of each crypto asset holding must be determined on the basis of the holding’s fair value.
The Board noted that these factors are consistent with the disclosure requirements in FASB Accounting Standards Update No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.