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| 2 minutes read

FASB Votes to Propose Fair Value Measurement for Crypto Assets

At their Wednesday, October 12, 2022, board meeting, the Financial Accounting Standards Board (FASB) voted on and tentatively decided to require entities that hold crypto assets to measure those assets at fair value as set forth in the guidance in Topic 820, Fair Value Measurement.

The board meeting was part of a project launched by the FASB in December 2021 related to the accounting for and disclosures related to crypto assets as part of their technical agenda. The project was created in response to feedback received on an invitation to comment on the issue of crypto assets issued previously by the standard setting body.

On a related note, in August 2022, the FASB narrowed the scope of crypto assets covered by this proposed guidance by determining that the crypto assets held by the entity must meet the following criteria:

  • Meet the definition of an 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.

In addition to the fair value measurement decision, the FASB also voted to require companies to recognize certain costs incurred to acquire crypto assets as an expense. This would include such costs as commissions and transaction fees that are often involved with crypto asset purchases and transfers.

Impact on the Industry

Before this decision, crypto assets had been treated as intangible assets, such as goodwill, and were required to be measured at historical cost less impairment. ASC 350 requires indefinite-lived intangible assets to be tested for impairment on an annual basis, and while impairment losses are reflected on the income statement, increases in value are not recognized. 

With the proposed change, crypto assets would be treated like financial assets, which are measured at fair value. Both gains and losses from changes in fair value are recognized in comprehensive income at each reporting period. The new guidance does not include NFTs and certain stablecoins. The FASB plans to consider adoption and transition guidance later in the year.

The FASB believes this proposed change will address investors’ increasing desire for disclosure transparency around crypto assets and will more accurately reflect the reality of a company’s financial condition. FASB board member Gary Buesser stated, “We’ve heard from investors that they want transparency through disclosure, and the only way to get to that is fair value.”

As companies either begin or continue to build their crypto asset holdings, they will need to consider the regulatory reporting and forecasting impact this change in measurement will cause. Similarly, investors and other interested parties will need to be acutely aware of the implied volatility in recognizing crypto assets at fair value.

How Ankura Can Help

Ankura’s team of former standard setters and regulators from the FASB, PCAOB, and SEC are experts in interpreting technical accounting issues and are prepared to assist you and your organization in understanding how to implement these proposed reporting and disclosure changes. Our professionals also possess the expertise on digital & crypto assets and blockchain issues necessary to support your business in navigating the ever-changing regulatory landscape in the space. Please reach out to our team to find out more about how we can help you.

© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.

"We’ve heard from investors that they want transparency through disclosure, and the only way to get to that is fair value." -Gary Buesser, FASB Board Member


cryptocurrency & blockchain, audit advisory, forensics & investigations, memo

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