coindesk.com
The Financial Accounting Standards Board (FASB) has said that firms should use fair-value accounting methods for cryptocurrencies likes bitcoin (BTC) and ether (ETH), according to a Wall Street Journal report.
Fair-value accounting of crypto would allow companies to report losses and gains immediately and treat the asset class as traditional financial assets. Currently, digital assets are considered as indefinite-lived intangible assets that only require reporting once a year.
In May, the FASB unanimously voted to review accounting rules for crypto following pressure from the likes of former MicroStrategy (MSTR) CEO Michael Saylor, who said that current rules discourage companies from holding bitcoin on their balance sheets.
Saylor tweeted his support for the new accounting system, calling it a major milestone on the road to institutional bitcoin adoption.
MicroStrategy currently holds 130,000 bitcoin valued at $2.47 billion, with the position at an unrealized loss of $1.51 billion.
“We expect the disconnect between the reported carrying value on our balance sheet and the fair market value of our bitcoin holdings to grow significantly over time,” MicrosStrategy CEO Phong Le said in a letter to the FASB last year, as quoted by WSJ.
The FASB will make likely make a decision before the end of the year, the report said.