Corporate financial reports and disclosures

FASB's New Rules Allow Bitcoin Valuation at Fair Market Value, Boosting Corporate Reserves

Dec 15, 2024, 03:14 PM

The Financial Accounting Standards Board (FASB) has introduced new accounting rules effective from December 15, 2024, allowing companies to report Bitcoin and other cryptocurrencies at fair market value rather than historical cost. This change, which coincides with a full moon, is expected to encourage more corporate investment in Bitcoin as it removes the burden of permanent markdowns on their balance sheets. The new rules mandate that entities measure certain crypto assets at fair market value, with changes in fair value recorded in net income each reporting period. Observers anticipate a surge in Bitcoin's value on corporate balance sheets and predict increased adoption of Bitcoin as a corporate treasury asset, potentially leading to significant inflows of Bitcoin into corporate reserves.