SNEAK PEEK
- In its investigation of crypto accounting, the Financial Accounting Standards Board (FASB) will exclude NFTs and several stablecoins.
- According to Susan Cosper, a board member of the FASB, few companies have yet to invest in NFTs.
- Reporting standards for companies that include virtual currencies like bitcoin (BTC) in their balance sheets were not mentioned by FASB.
According to sources cited by The Wall Street Journal on August 31, the Financial Accounting Standards Board (FASB) will not include NFTs and some stablecoins in its study of crypto accounting.
The article claims that the FASB rule would apply to digital assets like Bitcoin (BTC) and Ethereum (ETH) that are fungible, intangible, and lack any contractual rights to cash flow or ownership of goods and services.
The rule would not apply to any specific crypto assets, according to FASB. However, it stated that fungible, intangible, and assets without contractual rights to cash flows or ownership of products and services would also be included by the law, according to the Journal. While some stablecoins are actual assets, NFTs are by definition non-fungible and may carry rights to underlying assets.
Susan Cosper, a member of the FASB board, told the Journal that few businesses had yet to make investments in NFTs. She stated, “It’s not pervasive or material at this point, but it’s something we can focus on later if necessary.”
FASB made no mention of reporting requirements for businesses that include digital currencies like bitcoin (BTC) in their balance sheets. Currently, even if a company doesn’t sell its assets, it must declare an unrealized loss if the value of its holdings decreases. However, they are exempt from disclosing unrealized gains. Companies that possess other assets are not subject to the same regulations. To rectify this difference, the crypto sector is expecting FASB to amend its recommendations.
Due to the volatile nature of the industry, corporations holding cryptocurrencies have criticized these accounting standards and are advocating for a fair-value accounting norm.
A FASB spokesman reportedly told the Wall Street Journal that all early conversations on crypto accounting regulations will conclude this year. The board will then decide whether to propose by casting a vote.
