Change to US accounting rules will be a boon to companies holding crypto in 2025

cointelegraph.com:

The Financial Accounting Standards Board (FASB) has unanimously approved rules for accounting for the fair value of companies’ cryptocurrency holdings, according to media reports. The rules will go into effect in 2025.

The FASB is the United States organization that sets accounting and reporting standards for organizations that follow U.S. Generally Accepted Accounting Principles (GAAP). It issued a call for comments on proposed changes to the FASB Accounting Standards Codification in March.

The proposal was discussed and put to a vote on Sept. 6.

Fair value is the estimated price of an asset that takes into account current market value and other decisive elements. The FASB had made a “tentative” decision on fair value accounting for crypto assets in October 2022.

Christmas came early for @saylor $MSTR and other companies with Bitcoin on their balance sheets!

FASB is moving to fair value reporting for Bitcoin holdings

Should @Swan host a livestream today to explain the implications?

Previous practice required companies to keep impairment losses from crypto, caused when an asset suddenly loses value, on their balance sheets even after the digital asset regained its value.

Related: How to handle crypto trading gains and losses on your balance sheet

The new accounting method will increase volatility in the earnings of companies with large crypto holdings but allow them to record financial recoveries from increasing crypto prices. Companies can begin using fair-value accounting for their crypto immediately if they wish to. FASB member Christine Botosan said:

Besides crypto-native companies like Coinbase, the rule change will affect investment companies and companies like MicroStrategy and Tesla that hold large amounts of