FASB's Crypto Accounting Shakeup Could Lure More Corporate Investment, Michael Saylor and Others Argue

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The U.S. accounting standards board yesterday unanimously voted in favor of 'fair value' accounting for crypto assets held on corporate balance sheets.

A big change in how U.S. companies are now supposed to account for bitcoin and other cryptocurrencies they own could make businesses more willing to buy them, according to a Wall Street research shop and one of corporate America's biggest bitcoin boosters.

"The decision is a significant development," said analysts at Stifel. They noted that generally accepted accounting principles, or GAAP, in the U.S. force companies to write down the value of crypto assets when prices drop, but don't let them reverse those writedowns if prices subsequently rally – meaning balance sheets can reflect substantially lower values than what the assets would fetch in the open market.

The Stifel team noted MicroStrategy's roughly 152,300 bitcoin at the end of the second quarter were carried on the company's books at a value of $2.3 billion, a whopping 50% less than their fair market value at the time.

 

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