FASB’s New Rules for Crypto Accounting: What You Need to Know

3 min readOct 26, 2023



The Financial Accounting Standards Board (FASB) has proposed and voted on significant changes to the accounting rules for crypto assets held in treasury. This article delves into the key aspects of these proposed amendments, their implications, and why they are considered significant for the financial reporting landscape.

Why the Change?

The FASB is issuing these amendments to improve the accounting for and disclosure of certain crypto assets. Stakeholder feedback, including responses to the 2021 FASB Invitation to Comment (ITC), indicated that the current accounting model does not provide decision-useful information to capital allocators and other stakeholders.

The prior model, which is a cost-less-impairment accounting model, only allows companies to reflect the decrease in the value of crypto assets but not the increases, until they are sold. This does not provide a true picture of an entity’s financial position or the underlying economics of the assets.

Removing a Key Barrier to Entry for Adoption

One of the most significant impacts of the proposed amendments is that they could remove a key barrier to entry for companies looking to add crypto assets to their treasury. The prior approach has been a deterrent for many companies, as it does not allow for the recognition of increases in the value of crypto assets until they are sold. This has made crypto assets less attractive as an investment option for companies that are concerned about the volatility and potential impairment of these assets. By shifting to a fair value accounting model, companies can now reflect the real-time value of their crypto assets, making it a more appealing option for corporate treasuries.

Impact of the Change on Profitability

The choice between fair value accounting and cost-less-impairment has material tax implications. Fair value accounting provides a more dynamic approach but could lead to higher tax volatility. On the other hand, the cost-less-impairment model offers more stability but might not capture the true economic value of the assets.

Under fair value accounting, the unrealized gains and losses from the fluctuation in the value of crypto assets are recognized in the income statement. This could potentially increase the taxable income if the assets appreciate, leading to higher tax liabilities.

In an unprofitable setting, recognizing unrealized gains could potentially offset some of the losses, thereby increasing the taxable income. Conversely, unrealized losses could exacerbate the financial situation, leading to even lower taxable income, which might be beneficial for tax purposes.

Who Is Affected?

The proposed amendments would apply to all entities holding crypto assets that meet certain criteria, including:

  • The definition of an intangible asset.
  • Not providing enforceable rights to underlying goods, services, or other assets.
  • Being created or residing on a blockchain.
  • Being secured through cryptography.
  • Being fungible.
  • Not being created or issued by the reporting entity or its related parties.


By requiring fair value measurement and enhanced disclosures, the new rules aim to provide more transparent and useful information to investors and other stakeholders. This is a welcome change that reflects the growing importance and complexity of crypto assets in today’s financial landscape.

Additional information can be found below:

FASB Board Meeting Information — September 6, 2023
FASB Proposed Accounting Standards Update — March 23, 2023




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