The United States’ premier accounting standardisation body is urging companies to adopt “fair-value” accounting practices when disclosing their crypto holdings. In a groundbreaking move, the Financial Accounting Standards Board (FASB) is introducing the first-ever U.S. accounting rule dedicated to cryptocurrencies, which stipulates that companies must apply a fair-value approach to assess the market rates of specific digital assets.

During a recent Wednesday meeting, the FASB thoroughly examined feedback on this proposed change and has granted its staff the authority to draft the final version of this accounting standard. The new rule is scheduled to take effect for fiscal years beginning after December 15, 2024, with the expectation that the final wording will receive approval through a written vote by year-end. Operating as a non-governmental organization, the FASB operates under the oversight of the U.S. Securities and Exchange Commission (SEC). The rule was initially proposed in March and represents a departure from the conventional practice of accounting for crypto assets based on their unrealized losses – a practice viewed by the industry as a hindrance to broader crypto adoption. This shift toward integrating cryptocurrencies into the accounting framework implies that companies will now incorporate gains and losses from these assets into their quarterly income reports.

Richard Jones, Chairman of the FASB, expressed strong support for this decision, stating, “We have overwhelmingly heard from investors who allocate capital based on financial statements that this change will offer them superior information for their decision-making. Therefore, I am fully in favor of it.”

The FASB is actively encouraging companies to consider early adoption of this new standard, with the anticipation that it will bring greater clarity and uniformity to financial reporting practices concerning crypto holdings. Notably, this move has garnered acclaim from notable figures within the cryptocurrency industry. Michael Saylor, the founder and former CEO of MicroStrategy (MSTR), expressed his enthusiasm by tweeting that this development “eliminates a significant hurdle to corporate adoption of $BTC as a treasury asset.”

Fair value accounting is coming to #Bitcoin. This upgrade to FASB accounting rules eliminates a major impediment to corporate adoption of $BTC as a treasury asset.https://t.co/MjVzUJRVjX

— Michael Saylor⚡️ (@saylor) September 6, 2023

Disclaimer: This article is for informational purposes only and should not be interpreted as financial or investment advice. Cryptocurrency investments carry inherent risks, and readers are strongly advised to conduct their own research and seek professional guidance before making any investment decisions.