- The Financial Accounting Standards Board (FASB) voted Wednesday to move ahead with its ongoing project poised to establish new accounting standards for cryptocurrency that will require both private and public companies to disclose a range of information about crypto holdings in their financial reports for the first time.
- During the nearly two-hour meeting segment on crypto, the board was effectively silent on the collapse last month of crypto exchange FTX. A company spokesperson declined to comment on FTX as well as the calls for more regulation that have followed its implosion.
- Among the most consequential data that the board moved to require companies to disclose in their future financial are: crypto gains and losses within net income as well as “significant asset holdings” including details such as their fair value, units held and any related restrictions. The board is calling for the information in interim or quarterly as well as annual reports.
The board meeting marks the first time it has formally taken up the crypto project since the FTX scandal erupted. It comes amid increased calls for more regulation of the sector.
Last week the Securities and Exchange Commission (SEC) called on companies to fully disclose crypto asset risk, citing “financial distress” and joining efforts by lawmakers, investors and creditors to gauge the losses and market vulnerabilities in a post-FTX bankruptcy era.
The FASB appears to be staying the course on a project that it began in earnest digging into in May when it unanimously agreed to move forward with a staff recommendation to prioritize a project designed to improve the accounting for and disclosure of certain digital assets by upgrading the issue to its technical agenda.
In August, it narrowed its scope to effectively exclude nonfungible tokens (NFTs). In October, it took another big step when it moved to make fair value the primary accounting method for measuring crypto assets.