The Financial Accounting Standards Board is all set t review its rules for accounting crypto and digital assets. Fresh accounting standards could lead to firms not being required anymore to report cryptocurrencies such as Bitcoin on the balance sheets as intangible assets. Michael Saylor of MicroStrategy has welcomed the move.
At present, companies have to measure their assets at the lowest price during a period of accounting. Michael Saylor is a Bitcoin advocate and has invited the US FASB to audit the rules of bookkeeping for advanced items and resources.
Companies under the FASB rules are required to report advanced resources. For instance, Bitcoin is to be presented as a theoretical resource on monetary records. The FASB is the foundation of accepted principles of accounting (GAAP).
FASB is a crucial organization for publicly traded corporations in the US and abroad. They have been looking to add digital assets to the balance sheets.
Michael Saylor Says Current FASB Accounting Standards Disadvantages Public US Companies
Michael Saylor has recently commented on the reasons why current standards of FASB are so irksome for companies, including MicroStrategy.
Michael Saylor’s comments on FASB were part of a wide range of conversations. He said that the current FASB standards disadvantage publicly traded US companies. Bitcoin is currently deemed by gap accounting in the US as an indefinite intangible asset.
Michael Saylor said that if instead, it was a foreign company with a different accounting standard than FASB, the company might very well carry that as a financial asset. This is because crypto does not meet the accepted definition of FASB’s definition of assets as financial instruments, cash plus cash equivalents, inventory, and financial assets.
Crypto is considered an intangible asset, and publicly traded US companies at present have to measure the assets at the lowest value at any given period of reporting. This results in a loss on the balance sheet.
Michael Saylor says that the summary is that the current FASB standards advantage individuals, private companies, institutional investors, and foreign companies because they have different standards for accounting.
The meeting to vote held by the FASB was welcomed by Michael Saylor who congratulated the Bitcoin community. In a unanimous 7-0 decision, the board agreed to add a project review Accounting For Exchange-Traded Digital Assets and Commodities.