FASB has published an Accounting Standards Update (ASU) aimed at improving the disclosure of certain fungible cryptoassets.
The amendments in the ASU, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, require entities to measure certain cryptoassets at fair value each reporting period, with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s cryptoasset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period.
The new standard is in response to stakeholder feedback indicating that improving the accounting for and disclosure of cryptoassets should be a top priority, FASB Chair Richard R. Jones said in a news release.
The amendments are effective for fiscal years beginning after Dec. 15, 2024, including interim periods within those fiscal years. If amendments are adopted in an interim period, they must be adopted as of the beginning of the fiscal year that includes that interim period.
The ASU amendments apply to all fungible assets that are secured through cryptography and:
- 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; and
- are not created or issued by the reporting entity or its related parties.