TheCorporateCounsel.net

I blogged a year ago that FASB was considering an accounting standard for digital assets. The Board’s technical agenda shows that they deliberated in early September and that a new ASU is scheduled to land in Q4. Here’s a summary of the tentative decisions.

The Center for Audit Quality says the new standard will require companies holding cryptocurrency to recognize losses & gains immediately – and shared this color:

According to a CAQ analysis as of September 5, 2023 83 comment letters had been submitted to FASB in response to their cryptocurrency proposal. Nearly all commenters across stakeholder groups (including the CAQ) expressed support for accounting for crypto assets within the scope of the Proposed ASU at fair value. Only two commenters specifically opposed accounted for crypto assets within the scope of the Proposed ASU.

Many commenters were supportive of the narrow scope of the Proposed ASU but recommend that additional standard setting on a wide range of topics will be needed in the future. These topics included wrapped tokens, NFTs, stablecoins, and other emerging crypto assets fall outside the scope of the Proposed ASU. However, according to this article from Accounting Today, we may need to wait a while for a project on wrapped tokens as a spokesperson for the FAF said “at this time there are no plans for a project specifically addressing NFTs or wrapped tokens.”

Commenters on the proposed ASU also requested further guidance on accounting for certain types of digital asset transactions (including, derecognition, crypto lending and borrowing, and crypto receivables and payables).

For more on digital assets, here’s a primer for audit committees and key questions for audit committees to consider, both from the CAQ.

– Liz Dunshee