FASB voted Wednesday to issue a cryptoassets standard that will require entities to report on fungible crypto holdings using the fair value measurement standard.
After reviewing shareholder feedback received on the exposure draft of Accounting for and disclosure of crypto assets during Wednesday’s meeting, the board voted to issue the final standard with an effective date for fiscal years beginning after Dec. 15, 2024.
The board affirmed that the final standard will require reporting entities to:
- At a minimum, present the aggregate amount of cryptoassets separately from other intangible assets that are measured using other measurement bases.
- Present gains and losses on cryptoassets in net income and present those gains and losses separately from the income statement effects of other intangible assets, such as amortization or impairments.
- Classify cryptoassets received as noncash consideration during the ordinary course of business that are converted nearly immediately into cash as operating cash flows.
The standard will require entities to report the value of qualifying cryptoassets at fair value in accordance with Topic 820, Fair Value Measurement.
Cryptoassets that align with all of the following will fall within the scope of the standard:
- meet the definition of intangible assets as defined in the Codification Master Glossary;
- 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 technology;
- are secured through cryptography;
- are fungible; and
- are not created or issued by the reporting entity or its related parties.