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- According to recent developments, US regulators are working on improved accounting standards for Bitcoin
(BTC) to effectively capture its fluctuations.
- FASB has stated that the rules will take effect in 2025, but companies still have the option to apply early.
- The scope of the board remains limited, focusing on assets produced or held in distributed ledgers using blockchain technology.
According to the latest information, US regulators will include Bitcoin and other cryptocurrencies in accounting rules in the US: What does it mean?
US Regulators Advancing Developments for Bitcoin
According to recent developments, US regulators are working on improved accounting standards for Bitcoin (BTC) to effectively capture its fluctuations. Accounting rules for Bitcoin and other cryptocurrencies have been long-awaited in the US.
The new regulations should come by the end of the year. These regulations will mandate companies investing in or holding cryptocurrencies to disclose their assets at fair value. This valuation method reflects the most current asset value, including potential increases in value following price declines.
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While it is expected that these upcoming standards will introduce more volatility into the financial reports of crypto-intensive companies, it represents an improvement over current practices according to feedback received from companies and accounting professionals over the past months, as stated by the Financial Accounting Standards Board (FASB).
FASB has stated that the rules will take effect in 2025, but companies still have the option to apply early. Jeff Rundlet, Chief Accounting Officer at accounting software firm Cryptio, told COINOTAG:
“This is a significant step forward for the entire crypto market. I think they can help large companies who are afraid of the technical complexity by finalizing this issue.”
Bitcoin Accounting Has Been a Long Process for FASB
FASB had previously rejected three separate requests, citing limited use of Bitcoin by companies. However, their stance changed with the significant investments by large companies like Tesla and MicroStrategy in blockchain-based assets.
The board’s scope remained limited, focusing on assets produced or held in distributed ledgers using blockchain technology, and these assets must now fall under the category of intangible assets according to US accounting standards and provide interchangeability with similar assets.
Despite calls from many organizations, including the Big Four accounting firms, to include wrapped tokens, FASB decided to exclude them from the final framework, stating that they served similar purposes to core crypto assets and had similar prices.
On Wednesday, most FASB board members stated that they needed more information about the market. They said they would continue to monitor the crypto market and take action as needed.