FASB takes on accounting for digital assets

The Board’s decision on May 11, 2022 marks an inflection point. We summarize key aspects of the Board’s decision, and what lies ahead.

Applicability

• Entities with, or considering, investments in cryptocurrencies or other digital assets

Relevant dates

• On May 11, 2022, the FASB decided to add a project on the accounting for digital assets to its technical agenda. Further deliberations will occur in future meetings.

Overview

• The Board unanimously decided to add a project to its technical agenda that will address the recognition, measurement, presentation and disclosure of certain digital assets in the financial statements.
• The project is expected to focus on whether to require or permit ongoing fair value measurement for digital assets with specified characteristics.

Project scope considerations

• Board members noted that there are a number of key decisions to be made about the project’s scope, including whether to explicitly limit the types of features (e.g. the right to receive services) or categories (e.g. stablecoins and non-fungible tokens) of digital assets that would be included in the project’s scope, as well as whether there would be any industries excluded from the scope of the guidance.
• Board members asked the staff to seek stakeholder input on classification within the income statement and desired elements of disaggregation (e.g. disaggregation of realized vs. unrealized gains and losses).

Related projects

• The Board acknowledged certain similarities between digital assets and commodities but decided to exclude commodities from the project’s scope because, unlike digital assets, physical commodities can also be used in the production of other physical products.
• The accounting for commodities will remain on the Board’s research agenda and may be considered for addition to the Board’s technical agenda at a future date.

Related content