No products in the cart.
The Financial Accounting Standards Board (FASB) does not include NFTs and some stablecoins in their cryptocurrency accounting reviews.wall street journal report August 31, citing sources.
According to the report, FASB rules cover digital assets that are intangible, fungible, and have no contractual right to cash flow or ownership of goods or services. Bitcoin (BTC) and Ethereum (ETH) fall into this range. .
Explain the exclusion of NFTs and some stablecoins
While some stablecoins are tangible assets, NFTs are exempt from the rules because they are non-fungible and may hold rights to the underlying goods or services.
Regarding the exclusion of these assets, FASB Director Susan Cosper told the WSJ:
“[NFTs are] There is no dissemination and no substance at this time. You can certainly focus later if you want. “
Crypto Accounting Regulations Are In Progress
Companies and investors holding digital assets have repeatedly called for greater clarity on the accounting for crypto assets in their portfolios. However, the FASB only added cryptocurrencies to its technical priorities in May.
The outline of the new standards represents the first step in the Board’s rulemaking process. The FASB should present and consider proposals before making rules.
On the other hand, the exclusion of NFTs and some stablecoins remains a challenge for companies holding these assets.
The current accounting rules used by companies holding NFTs and other crypto assets are the non-binding guidelines of the International Institute of Certified Public Accountants (AICPA).
AICPA guidelines consider these assets to be indefinite intangible assets, like trademarks. Under the guidelines, companies are required to review the value of their assets annually.
If the asset’s value falls below the purchase cost, they should get a write-down and record a profit only if they sell at a price above the purchase price.
These accounting standards have drawn criticism from companies pitching cryptocurrencies for fair value accounting rules due to the volatile nature of the space.
According to The Wall Street Journal, a FASB spokesperson said all preliminary discussions on accounting rules for cryptocurrencies will end this year. The Board of Directors then votes to decide whether to issue the proposal.
