New US Crypto Accounting Rules to Benefit Companies Holding Digital Assets

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This article has been republished with permission from Binance News.

According to Cointelegraph, the United States Financial Accounting Standards Board (FASB) has approved new rules for cryptocurrencies, which will change how companies report the fair value of their holdings on their balance sheets. Analysts from Berenberg Capital believe that these new rules will eliminate the ‘poor optics’ that have plagued companies holding digital assets, such as MicroStrategy.

Under the current rules, companies like MicroStrategy have had to report impairment losses on their digital asset holdings each quarter, even if the asset price recovers. This has led to negative news coverage and the impression that the company’s inherent value has been negatively impacted. However, the new rules, which will go into effect in 2025, will allow firms that hold crypto to report those holdings at fair value, reflecting the current values of the assets, including any price rebounds.

MicroStrategy, the world’s largest corporate holder of Bitcoin with 152,800 coins as of July 31, currently valued at around $3.9 billion, is expected to benefit from these new rules. Berenberg believes that MicroStrategy will apply the new rules in advance, which will value its Bitcoin holdings at $8.8 billion by April 2024. According to Berenberg’s note, MicroStrategy CEO Michael Saylor has stated that the primary reason more firms have not adopted a Bitcoin investment strategy is because of the FASB’s ‘hostile’ and ‘punitive’ treatment of crypto. He believes that the change in accounting treatment will be a significant positive catalyst for the price of Bitcoin, as it would spur adoption by tech companies.



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