According to a report by CoinDesk, the Financial Accounting Standards Board (FASB) of the United States issued a guideline update on Wednesday (13th), allowing companies to recognize the “fair value” changes of the cryptocurrencies they hold.
FASB is the authority that provides detailed guidelines on how companies should report assets on their balance sheets. This latest move will benefit companies that hold cryptocurrencies on their balance sheets, such as MicroStrategy. Under current guidelines, if the value of the cryptocurrencies held by a company is lower than the purchase price, the company must report a loss even if the assets are not sold. Under the new rules, companies must report the fair value, cost basis, and type of assets held.
The updated document stated that stakeholders who provided feedback to FASB indicated that the current guidance did not provide useful information for investors or other parties. The document mentioned that the new rules, which received unanimous approval from the board, will take effect after December 15, 2024.
MicroStrategy founder Michael Saylor had previously stated on the X platform that this move would make it easier for companies to adopt Bitcoin as a financial asset. He reiterated this point after the FASB guideline was released on Wednesday.
Former head of Meta’s cryptocurrency and digital finance division, and founder of Bitcoin Lightning Network development company Lightspark, David Marcus commented that this move is actually a significant step forward, removing a major obstacle for companies holding Bitcoin on their balance sheets. 2024 will be a milestone year for Bitcoin.