CPE

Progress is being made on the FASB project on cryptocurrency

person reviewing stock or crypto performance on phone

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:

  1. Meet the definition of intangible asset as defined in the Codification Master Glossary.
  2. Do not provide the asset holder with enforceable rights to, or claims on, underlying goods, services, or other assets.
  3. Are created or reside on a distributed ledger or “blockchain”.
  4. Are secured through cryptography.
  5. 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. 

 

Stay up to date on FASB standards and updates – and earn CPE credits – with Becker CPE’s 2023 Audit Update.

Becker CPE 2023 Audit Update >  

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About the author

Jennifer has more than 25 years of experience in designing high-quality training programs in a variety of technical and “soft-skills” topics necessary for professional and organizational success. In 2003, she founded Emergent Solutions Group, LLC, where she focuses on designing and delivering practical and engaging accounting and auditing training. Jennifer started her career in audit for Deloitte & Touche. She graduated summa cum laude from Marymount University with a B.B.A. in Accounting.EducationMarymount University: Bachelor's of Business Administration, AccountingOrganizationsNorth Carolina Association of CPAsAICPAPublicationsAccounting for Cryptocurrency and Digital AssetsAccounting for Convertible DebtCoursesAuditing ContingenciesAccounting and Reporting for Contributions, Including Gifts in KindThe Future of ESG Reporting

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