The FASB has a project on the Technical Agenda related to Accounting for and Disclosure of Crypto Assets. The Board tentatively decided that crypto assets within scope of this project will be subsequently measured at fair value in interim and annual financial statements, with presentation of gains and losses in net income. Use of an alternative measurement method would not be permitted. Disclosures under Topic 820, Fair Value Measurement, would apply.
Costs, such as commissions, will be recognized as an expense (unless specialized industry measurement guidance requires otherwise).
The scope of this project will include crypto assets with the following characteristics:
- Meet the definition of intangible asset 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 or “blockchain”.
- Are secured through cryptography.
- Are fungible.
The scope of this project specifically excludes the following:
- Crypto assets created or issued by the reporting entity and their related parties.
- Assets commonly referred to as “wrapped tokens”.
- Exchange-traded digital assets and commodities.
Presentation and disclosure requirements will be enhanced to differentiate the intangible assets within the scope of this project from other intangible assets using a different measurement basis.
The project applies to all entities, including public and private entities, who will follow the same effective date and transition requirements.
The Board also decided that relevant entities should present their financial statements in accordance with current presentation requirements in Topic 946, Financial Services—Investment Companies, and Topic 958, Not-for-Profit Entities, respectively, subject to minor amendments to clarify the inclusion of crypto assets.
The Board directed the staff to draft a proposed Accounting Standards Update for exposure for public comment.
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