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- Bitcoin surged nearly 6% following an Accounting Standards Update release by FASB.
- According to Michael Saylor, the recent development will facilitate BTC adoption as a Treasury reserve asset by corporations.
- The FASB Chair said the board’s action was in response to feedback from stakeholders of all backgrounds.
Bitcoin staged a comeback yesterday following the Financial Accounting Standards Board’s (FASB) publication of an Accounting Standards Update (ASU). According to the announcement, the published ASU would improve the accounting for and disclosure of crypto assets, including Bitcoin. Michael Saylor, founder of MicroStrategy, thinks the recent development will facilitate the adoption of Bitcoin as a treasury reserve asset by corporations worldwide.
FASB has officially adopted Fair Value Accounting for #Bitcoin for fiscal years beginning after Dec 15, 2024. This upgrade to accounting standards will facilitate the adoption of $BTC as a treasury reserve asset by corporations worldwide. https://t.co/4GOuji6cr0— Michael Saylor⚡️ (@saylor) December 13, 2023
Speaking on the development, FASB Chair Richard R. Jones noted that the board’s action was in response to feedback from stakeholders of all backgrounds who indicated that improving the accounting for and disclosure of crypto assets should be a top priority for the Board. He believes doing so would provide investors and capital allocators with more “relevant information.”
Jones also noted that the provided information would better reflect the underlying economics of crypto assets and an entity’s financial position while reducing the cost and complexity associated with applying current accounting.
Following the announcement, Bitcoin’s price recovered from the recent pullback that saw it drop to $40,181. The flagship cryptocurrency’s value surged by nearly 6% in less than 12 hours to recover from recent losses, according to CoinMarketCap. BTC’s price climbed to $43,440 before dropping slightly to $42,888 to close the trading day.
According to FASB’s announcement, changes in the ASU would require the responsible entities to measure the crypto assets at fair value each reporting period, with changes in fair value recognized in net income. They will also disclose significant holdings, contractual sale restrictions, and changes during the reporting period.
The Fair Value Accounting for Bitcoin will begin after December 15, 2024, as stated in FASB’s announcement. The establishment also noted that it would include interim periods within those fiscal years.
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