In what could be a significant development amid a widespread crash in the cryptocurrency market, the Financial Accounting Standards Board (FASB) on Wednesday took a decision for addressing the recognition and measurement of digital assets, in a unanimous vote. In this regard, deliberations would be held to review accounting for exchange-traded digital assets and commodities.
FASB Vote Goes All In
According to MicroStrategy’s Michael Saylor, the FASB agreed to add the project by a unanimous vote of 7-0 earlier in the day.
Congratulations to the Bitcoin community. This morning, by unanimous vote of 7-0, the Financial Accounting Standards Board (FASB) agreed to add a project to review Accounting for Exchange-Traded Digital Assets and Commodities.
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Dan Held, director of growth marketing at cryptocurrency exchange Kraken, said,
This is amazing. One step closer to making it easier for corporates to own Bitcoin on their balance sheet and account for it in a cogent manner.
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Breakthrough In The Long Term
The FASB’s board meeting handout stated that the purpose of the decision-making meeting was to ask the board whether to add a project to its technical agenda to address accounting for certain digital assets and commodities. Although the development does not guarantee any possible outcome in a time-bound manner, it could well prove to be a massive breakthrough in the long term.
It may be noted that in November 2018, the International Accounting Standards Board (IASB) decided against adding a project on the holdings of cryptocurrencies or initial coin offerings. Later, in June 2019, the International Financial Reporting Standards (IFRS) interpretations committee discussed how IFRS standards apply to holdings of cryptocurrencies.
The committee observed that a holding of cryptocurrency meets the definition of intangible asset in IAS 38, Intangible Assets, because it is capable of being separated from the holder and sold or transferred individually, and it does not give the holder a right to receive a fixed or determinable number of units of currency.