FASB Proposes Enhancements to Disclosures About Cash Equivalents and Clarifications to the Evaluation of Certain Digital Assets (August 19, 2026)

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

Overview

On August 18, 2026, the FASB issued a proposed ASU 1 that would amend ASC 230-102 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 proposed ASU 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.

Background

At its August 13, 2025, meeting, the FASB added a project on digital assets to its research agenda. One of the goals of the project was to determine whether certain digital assets (e.g., stablecoins) may be treated as cash equivalents. In exploring this topic, the Board reached out to various stakeholders; evaluated stakeholder feedback received on its January 2025 invitation to comment, Agenda Consultation; and considered the recommendations in the report released by the President’s Working Group on Digital Asset Markets. Stakeholder feedback indicated that, although stablecoins have become an important aspect of the digital asset ecosystem, there is diversity in practice related to determining whether these assets meet the definition of a cash equivalent.

On the basis of stakeholder feedback, during its October 29, 2025, meeting, the Board decided to add to its technical agenda a project on clarifying whether certain digital assets may be classified as cash equivalents and considered several approaches to meeting this objective. These approaches included (1) revising the definition of the term “cash equivalent” in the ASC master glossary, (2) defining the term “digital cash equivalent,” and (3) adding examples illustrating whether certain digital assets meet the current definition of cash equivalents.

Ultimately, at its April 15, 2026, meeting, the Board decided to add illustrative examples to ASC 230 (see Approach 3 above), since it believed that this approach would result in timely guidance and potentially avoid unintended consequences associated with revising the current definition. Notably, the proposed ASU does not define the term “stablecoin.” Rather, it provides examples illustrating whether certain digital assets meet the existing definition of cash equivalents on the basis of whether they possess certain attributes. In practice, a stablecoin is generally understood as a digital asset whose value is designed to track the price of a traditional asset, such as a fiat currency (e.g., the U.S. dollar), to minimize price volatility. However, not all stablecoins will have all the attributes of a cash equivalent.

During the April 15, 2026, meeting, the Board decided that entities would be required to annually disclose “the significant classes and related amounts of cash equivalents.” The Board emphasized that this disclosure requirement would apply to all entities, regardless of whether they hold stablecoins. Therefore, the scope of the proposed disclosure requirement extends beyond stablecoins.

Main Provisions of the Proposed ASU

Disclosure Enhancement

The proposed ASU would require all entities that present any assets as a cash equivalent to disclose, in annual reporting periods, the significant components and related amounts of those assets. Examples of significant components identified in the proposal include U.S. Treasury bills, commercial paper, stablecoins, and money market funds.

The proposed ASU does not define the term “significant components” or establish a threshold for determining significance. Paragraph BC25 of the proposed ASU explains that the Board “decided to allow entities to use appropriate judgment” in determining their significant components. As a result, entities may need to use judgment in determining the appropriate level of disaggregation and whether specific components of cash equivalents should be separately disclosed. In making this determination, entities may consider the objective of the disclosure requirement.

Connecting the Dots

Although the FASB initially added this project to its agenda in response to questions regarding the classification of certain stablecoins, the proposed disclosure requirement would affect a much broader population of entities. Specifically, it would apply to all entities that present assets as cash equivalents, regardless of whether those assets are digital assets.

The Board notes that the proposed disclosures are intended to enhance transparency and provide investors with information relevant to assessing liquidity. The proposed disclosure requirement is broadly consistent with, although not identical to, that in IAS 73 under IFRS Accounting Standards, which also requires disclosure of the components of cash equivalents. However, unlike IAS 7, the proposed ASU would not require entities to disclose the components of cash or to provide a reconciliation of cash and cash equivalents to the statement of financial position.

Evaluation of Certain Digital Assets as Cash Equivalents

Instead of changing the current definition of cash equivalents in the ASC master glossary, the proposed ASU would add illustrative examples intended to clarify how an entity should evaluate whether certain digital assets, such as stablecoins, meet the definition of cash equivalents.

The proposed examples focus on three key attributes that the Board believes are important to the evaluation of whether a digital asset may qualify as a cash equivalent: (1) an on-demand-contractual cash redemption right, (2) a direct redemption right with the issuer for a known amount of cash, and (3) segregated reserve assets held by the issuer on at least a one-to-one basis (relative to the issued and outstanding digital assets in circulation) in short-term, highly liquid assets. The table below outlines these attributes.

Attribute	Illustrative Application
On-demand contractual cash redemption right	A stablecoin generally has no contractual maturity date; therefore, the holder must be able to exchange the stablecoin for cash from the issuer at its election, and without paying significant fees to do so, rather than waiting for a future maturity date.
Direct redemption right with the issuer for known amounts of cash	The holder should have a direct redemption right with the stablecoin issuer without having to go through an intermediary (e.g., third parties such as exchanges or market makers) to redeem the stablecoin for known amounts of cash.
Segregated reserve assets held by the issuer on at least a one-to-one basis (relative to the issued and outstanding digital assets in circulation) in short-term, highly liquid assets	The issuer of the stablecoin must maintain sufficient high-quality, liquid, segregated reserves covering at least the value of each outstanding stablecoin issued and in circulation to support redemption requests.

The examples illustrate how a digital asset that possesses these attributes may meet the definition of a cash equivalent and describe situations in which this definition would and would not be met. The Board noted that if an entity determines that a stablecoin includes these attributes, the entity is permitted, but not required, to present the qualifying asset as a cash equivalent. In a manner similar to that under existing GAAP, the presentation of qualifying assets as cash equivalents under the proposed ASU would remain an accounting policy election. In addition, paragraph BC15 of the proposed ASU emphasizes that these attributes should not be evaluated in isolation. Although the proposed examples link each attribute to a characteristic in the definition of cash equivalents, an entity should consider the attributes collectively when determining whether a digital asset meets that definition.

Connecting the Dots

The ASC master glossary defines cash equivalents as follows:

Cash equivalents are short-term, highly liquid investments that have both of the following characteristics:

Readily convertible to known amounts of cash
So near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month U.S. Treasury bill and a three-year U.S. Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Examples of items commonly considered to be cash equivalents are Treasury bills, commercial paper, money market funds, and federal funds sold (for an entity with banking operations).

Although the proposed ASU focuses on digital assets, the Board emphasized that the existing definition of cash equivalents remains unchanged. Accordingly, the proposal does not create a new accounting model or expand the population of assets that qualify as cash equivalents; rather, the proposed examples are intended to illustrate how an entity assesses whether certain digital assets possess the attributes necessary to meet the existing definition of cash equivalents (i.e., whether they have the two characteristics in the definition above).

Proposed Illustrative Examples (Proposed ASC 230-10-55-22 Through 55-28)

Case A — Digital Asset Meets the Definition of Cash Equivalents

ASC 230-10

Pending Content (Transition Guidance: ASC 230-10-65-4)

Case A: Meet the Definition of Cash Equivalents

55-23 Issuer C is the issuer of Digital Asset B, which is a stablecoin designed to maintain a value of $1 per unit. Issuer C maintains reserve assets in a segregated account relating to Digital Asset B on at least a one-to-one basis (relative to the issued and outstanding units in circulation) in cash and U.S. Treasury bills with original maturities of three months or less. Entity A holds 100 units of Digital Asset B and maintains an account with Issuer C that provides it with a contractual right to redeem its units of Digital Asset B on demand (with no significant fees or significant restrictions imposed) for $1 per unit directly from Issuer C.

55-24 The 100 units of Digital Asset B are short-term, highly liquid items that meet the definition of cash equivalents as follows:

The units are readily convertible to known amounts of cash because Entity A has an on-demand redemption right for $1 per unit directly from the issuer.
The units are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates for the following reasons:
1. Entity A has the contractual right to redeem its units of Digital Asset B on demand for $1 per unit.
2. Issuer C maintains reserve assets in a segregated account relating to Digital Asset B on at least a one-to-one basis (relative to the issued and outstanding units in circulation), and those reserve assets consist of cash and U.S. Treasury bills with original maturities of three months or less.

Case A highlights that a direct, on-demand contractual redemption right and qualifying reserve assets are important to the analysis. The example suggests that a stablecoin without a stated maturity may nonetheless satisfy the “so near their maturity that they present insignificant risk of changes in value because of changes in interest rates” (emphasis added) criterion when the holder has an on-demand redemption right for a fixed amount of cash and the issuer has sufficient reserves to fulfill any redemption requests on at least a one-to-one basis. As explained in paragraph BC17 of the proposed ASU, the Board views a direct, on-demand redemption right as equivalent to immediate maturity in this assessment.

With respect to determining which contractual redemption rights qualify as on-demand, one-to-one redemption rights, the proposed ASU does not define what constitutes “no significant fees or significant restrictions imposed.” Furthermore, paragraph BC17 of the proposal states that on demand is understood as referring to a redemption that occurs “within normal processing time and without undue delay,” which is also not defined. As a result, although the existence of redemption fees, waiting periods, redemption limits, or other restrictions on redemption rights may preclude the classification of a stablecoin as a cash equivalent, an entity may need to use judgment in assessing whether such fees or restrictions are significant.

Case B — Assets Are Not Readily Convertible to Known Amounts of Cash

ASC 230-10

Pending Content (Transition Guidance: ASC 230-10-65-4)

Case B: Redemption Right

55-25 Assume similar facts as Case A; however, in Case B, Entity A does not maintain an account with Issuer C, and Entity A does not have a contractual right to redeem directly from Issuer C. There are active secondary markets where Entity A expects that it will be able to sell its 100 units of Digital Asset B for approximately $1 per unit.

55-26 The units are not readily convertible to known amounts of cash because Entity A does not have an on-demand contractual right to redeem directly from Issuer C for a known amount of cash. Therefore, Entity A determines that the units of Digital Asset B do not meet the definition of cash equivalents.

This example focuses on the absence of a direct contractual redemption right with the stablecoin issuer. The Board distinguishes between a holder’s ability to redeem directly with the issuer and its ability to obtain liquidity through a secondary market. According to the proposed example, only the former would support a conclusion that a digital asset is readily convertible to known amounts of cash.

Connecting the Dots

Many stablecoin issuers currently partner with a small number of exchanges, market makers, or other intermediaries and only offer a direct redemption right to those intermediaries. Although other holders of their stablecoins may be able to readily convert their holdings of such stablecoins to cash through an intermediary or on an exchange, the proposed ASU would preclude a holder from concluding that a stablecoin is readily convertible to known amounts of cash because of the existence of one or more intermediary parties. In paragraph BC19 of the proposed ASU, the Board explains that indirect redemption rights introduce additional counterparty credit risk and create a “chain of contractual relationships” that makes conversion to cash less direct and less certain. Accordingly, different entities may reach different conclusions regarding whether the same stablecoin qualifies as a cash equivalent depending on (1) whether they have a direct redemption right with the stablecoin issuer and (2) the terms of that redemption right.

Case C — Assets Do Not Present an Insignificant Risk of Changes in Value

ASC 230-10

Pending Content (Transition Guidance: ASC 230-10-65-4)

Case C: Nature of Reserve Assets

55-27 Assume similar facts as Case A; however, in Case C, Issuer C maintains reserve assets in the form of crypto assets within the scope of Subtopic 350-60 and gold in a segregated account relating to Digital Asset B on a one-to-one basis (relative to the issued and outstanding units in circulation).

55-28 The value of the reserve assets (crypto assets within the scope of Subtopic 350-60 and gold) maintained by Issuer C related to Digital Asset B may change for reasons other than changes in interest rates, and those reserve assets present a more than insignificant risk of changes in value. The 100 units of Digital Asset B do not meet the definition of cash equivalents because of the nature of the reserve assets.

Unlike Case B, the conclusion in Case C is not governed by a lack of a direct redemption right with the issuer but by the composition of the issuer’s reserve assets. The Board concluded that reserves consisting of crypto assets and gold do not support a conclusion that the digital asset presents an insignificant risk of changes in value. The example illustrates that an evaluation of reserve assets focuses not only on the current value of reserves maintained but also on the extent to which those reserve assets are subject to potential fluctuations in value. Therefore, an issuer’s reserve composition is relevant to the cash-equivalents analysis. However, paragraph BC20 of the proposed ASU notes that the examples are not intended to “provide an exhaustive list” of permissible or impermissible reserve assets.

Paragraph BC22 of the proposed ASU further notes that an entity would need “sufficient information” from the issuer when determining whether digital assets meet the definition of cash equivalents, including information about the amount and composition of the issuer’s reserve assets, whether the reserve assets are maintained in segregated accounts and the number of issued and outstanding digital asset units in circulation. Because the one-to-one reserve requirement depends on the number of units in circulation, entities may need to consider whether issuer-provided or other third-party information is sufficient to verify that this requirement is met. In addition, the examples refer to the maintenance of reserve assets in a segregated account; however, the proposal does not define the term “segregated” or specify the legal, operational, or custodial arrangements necessary to satisfy that condition. See footnote 4 for details on certain requirements for stablecoin issuers that are within the scope of the GENIUS Act.

Consideration of Relevant Laws and Regulations

The proposed ASU also states that entities should consider compliance with relevant laws and regulations when establishing their accounting policy related to cash equivalents.

ASC 230-10

Pending Content (Transition Guidance: ASC 230-10-65-4)

Example 2: Evaluation of Certain Digital Assets

55-22 In Example 2, an entity should take into account relevant laws and regulations (for example, laws and regulations that prohibit treating certain assets as cash equivalents) when establishing its cash equivalents accounting policy in accordance with paragraph 230-10-45-6.

Paragraph BC23 of the proposed ASU indicates that the Board does not intend that entities will need to obtain legal opinions as a result of this requirement.

Connecting the Dots

The GENIUS Act (the “Act”), which was signed into law on July 18, 2025, establishes a federal regulatory framework for payment stablecoins. Once effective, the Act generally prohibits the treatment of a payment stablecoin issued by a nonpermitted issuer as cash or a cash equivalent for accounting purposes. As a result, entities may need to consider not only the accounting attributes illustrated in the examples but also the legal and regulatory status of the digital asset being evaluated.

The Act requires stablecoin issuers within its scope to comply with certain reserve asset requirements and provide certain disclosures that may correspond to elements of the evaluation of whether a stablecoin may qualify as a cash equivalent.4 The Act becomes effective either 18 months after enactment or 120 days after the issuance of final implementing regulations by the applicable federal regulators, whichever is earlier. For more information about the Act, see Deloitte’s publication 2025 — The Year of Payment Stablecoins: The GENIUS Act Is Law, Now What?

Proposed Effective Date and Transition

Effective Date

The Board will determine the effective date after considering stakeholder feedback on the proposed amendments. Early adoption will be permitted in interim or annual reporting periods.

Transition

The proposed transition provisions would differ depending on the requirements in question:

Cash-equivalent disclosure requirements — The proposed disclosure requirements would be applied prospectively as of the end of the annual reporting period in which an entity first adopts the amendments.
Illustrative guidance on the classification of certain digital assets in the statement of cash flows — The proposed implementation guidance would be applied “on a modified prospective basis, as of the beginning of the annual reporting period that includes the period of adoption” and would apply to affected digital assets held on the adoption date. The proposal would not require that an entity present a digital asset as a cash equivalent; rather, an entity would be required to “establish a policy concerning which digital assets that meet the definition of cash equivalents are presented as cash equivalents.” During the year of adoption, the entity would also be required to provide, within its transition disclosures, a reconciliation of the opening balance of cash, cash equivalents, and restricted cash reflecting the effect of applying the guidance. Further, paragraph BC33 of the proposed ASU notes that the Board does not intend to require entities to provide a preferability assessment when determining whether a digital asset meets the criteria to be classified as a cash equivalent on the basis of the initial adoption of the proposed ASU’s illustrative examples.

Appendix — Questions for Respondents

The proposed ASU’s questions for respondents are reproduced below for reference.

Illustrative Examples

Question 1: Are the proposed illustrative examples clear and operable and would they clarify the application of the Master Glossary definition of the term cash equivalents to digital assets? If not, why not, and what additional guidance would be needed and why? Do you anticipate any auditing challenges? Please explain.

Question 2: Do you agree that the amendments in this proposed Update should clarify that an entity should take into account relevant laws and regulations (for example, the Guiding and Establishing National Innovation for U.S. Stablecoins [GENIUS] Act) when establishing its cash equivalents accounting policy? Please explain, including whether that clarification is necessary, clear, operable and auditable.

Disclosure

Question 3: Would the proposed annual disclosure requirement provide decision-useful information for investors? Please explain, including how and in what circumstances the disclosure would influence capital allocation decisions. If the proposed disclosure would not provide decision-useful information, please explain why and what additional information, if any, would be necessary for making capital allocation decisions. For example, should an entity instead be required to disclose the name and amount of each significant stablecoin holding presented as cash equivalents? If so, should the term stablecoin be defined and, if so, how? Should those disclosures be limited to stablecoins presented as cash equivalents or applied more broadly to other assets presented as cash equivalents, such as money market funds? Please explain why or why not. In your response, please consider the decision usefulness, operability, auditability, and costs of an alternative disclosure compared with the proposed disclosure.

Question 4: Is the proposed annual disclosure requirement clear and operable? Do you anticipate any auditing challenges? Please explain.

Transition

Question 5: Are the proposed transition requirements clear and operable? If not, why not, and what transition method would be more appropriate and why? Would the proposed transition disclosures provide decision-useful information? Please explain.

Effective Date

Question 6: Regarding the effective date, how much time would be needed to implement the amendments in this proposed Update? Should the effective date for entities other than public business entities be different from the effective date for public business entities? If the effective dates should be different, how much additional time would entities other than public business entities need to implement the proposed amendments? Please explain.

Benefits and Costs

Question 7: Would the expected benefits of the proposed amendments justify the expected costs? If not, please describe why not.

Contacts

	Christine Mazor Audit & Assurance Partner Deloitte & Touche LLP +1 212 436 6462 cmazor@deloitte.com		Magnus Orrell Audit & Assurance Managing Director Deloitte & Touche LLP +1 203 761 3402 morrell@deloitte.com
	Andrew Pidgeon Audit & Assurance Partner Deloitte & Touche LLP +1 415 783 6426 apidgeon@deloitte.com		PJ Theisen Audit & Assurance Partner Deloitte & Touche LLP +1 202 220 2824 ptheisen@deloitte.com
	Hannah Higgins Audit & Assurance Senior Manager Deloitte & Touche LLP +1 617 960 8676 hhiggins@deloitte.com		Chris Alese Audit & Assurance Manager Deloitte & Touche LLP +1 203 423 4617 calese@deloitte.com

Footnotes

FASB Proposed Accounting Standards Update (ASU), Statement of Cash Flows (Topic 230): Cash Equivalents — Disclosure Enhancement and Evaluation of Certain Digital Assets.

FASB Accounting Standards Codification (ASC) Topic 230, Statement of Cash Flows.

IAS 7, Statement of Cash Flows.

Section 4(a)(1)(A) of the Act requires stablecoin issuers within its scope to “maintain identifiable reserves backing the outstanding payment stablecoins . . . on an at least 1 to 1 basis.” Furthermore, Section 4(a)(1)(C) of the Act requires stablecoin issuers within its scope to “publish the monthly composition of the issuer’s reserves on the website of the issuer, containing — (i) the total number of outstanding payment stablecoins issued by the issuer; and (ii) the amount and composition of the reserves . . . , including the average tenor and geographic location of custody of each category of reserve instruments.” Moreover, Section 4(a)(3) of the Act requires the “previous month-end report [to be] examined by a registered public accounting firm.” Further, “the Chief Executive Officer and Chief Financial Officer of [the] stablecoin issuer shall submit a certification as to the accuracy of the monthly report to [its] stablecoin regulator.” Lastly, Section 10(c)(1) of the Act states that “[p]ayment stablecoin reserves . . . shall be segregated from and not be commingled with the assets of the person.”

Heads Up is prepared by members of Deloitte's National Office as developments warrant. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/us/about to learn more about our global network of member firms. Copyright © 2026 Deloitte Development LLC. All rights reserved.