ChainCatcher news, according to CryptoSlate, industry experts indicate that Coinbase may face regulatory challenges in complying with the new Financial Accounting Standards Board (FASB) accounting standards in the United States. It is reported that the standard shifts the accounting and disclosure of cryptocurrencies from a low-cost impairment model to a fair value model.These rules were agreed upon by FASB in 2023 and will officially take effect in 2025. However, companies are allowed to adopt these standards early, and some companies, including Coinbase, have already followed this standard.The new standards aim to provide a more accurate valuation of digital assets by capturing the latest value of digital assets rather than treating them as intangible assets, which has been the standard practice.Olga Usvyatsky, former Vice President of Research at Audit Analytics, pointed out that while the new regulations provide investors with more useful decision-making information, they also introduce volatility to company earnings. Companies typically mitigate this volatility by using non-GAAP measures in their financial reports. However, these cannot create separately customized metrics. Usvyatsky believes that Coinbase has precisely done this.Before adopting the new rules, Coinbase excluded cryptocurrency impairment costs from its adjusted EBITDA reconciliation. After adopting the rule, the company excluded fair value fluctuations, which Usvyatsky believes is also a form of customized accounting as it ignores normal recurring operating expenses.Coinbase categorizes its cryptocurrencies on its balance sheet into four new items: investments, operational purposes, borrowed cryptocurrencies, and loan collateral. These assets are accounted for at fair value, with the determination of fair value varying, affecting the recorded gains or losses when market values change.The company also revised the definition of adjusted EBITDA to account for the gains and losses of cryptocurrencies held for investment, believing that these do not represent the normal recurring operating expenses required by its business.Usvyatsky stated that the SEC had previously questioned the company's non-GAAP adjustments, particularly sending letters to Bit Digital and MicroStrategy inquiring about similar impairment eliminations in their financial reports. In a follow-up letter to MicroStrategy in December 2021, the SEC requested that the company remove "the adjustment for impairment expenses related to Bitcoin in non-GAAP measures" in future filings.

ChainCatcher news, according to Bitcoin.com, the Federal Accounting Standards Advisory Board (FASAB) of the United States recently released a Technical Bulletin (TB) clarifying the accounting and reporting standards for seized and forfeited digital assets. It stated that seized cryptocurrency should be regarded as "nonmonetary property," while central bank digital currency (CBDC) should be considered a monetary instrument.FASAB noted that cryptocurrencies "typically do not possess all the characteristics of money," emphasizing that they "cannot effectively serve as a unit of account, medium of exchange, or store of value." The announcement further suggested that reporting entities use "the publicly observable active market for specific digital assets" to determine the market value of seized and forfeited digital assets, and pointed out that management should exercise judgment in selecting the most appropriate valuation market.It is reported that FASAB is responsible for establishing and issuing accounting standards for the U.S. government.

ChainCatcher news, according to The Block, the U.S. House of Representatives voted to pass a resolution aimed at overturning the SEC's cryptocurrency custody accounting standards announcement. The House vote resulted in 228 - 182, with a majority of Republicans supporting the measure. 21 Democrats voted in favor.The announcement was first issued in 2022 and has sparked controversy over the past year. It requires cryptocurrency custodians to record the cryptocurrencies held by clients on their balance sheets as liabilities. The crypto industry is concerned that this move could prevent banks from safeguarding digital assets. However, on Wednesday, the White House released a "government policy statement," stating that President Biden would veto the resolution.The White House stated, "Limiting the SEC's ability to maintain a comprehensive and effective financial regulatory framework for crypto assets would lead to serious financial instability and market uncertainty." The resolution may be submitted to the Senate Banking Committee and then voted on by the full Senate.

ChainCatcher news, according to CoinDesk, investment bank Benchmark stated that if MicroStrategy (MSTR) chooses to adopt the new accounting standards, the software company may surprise Wall Street analysts by reporting better-than-expected earnings and become eligible for inclusion in the most important U.S. stock index: the S&P 500.As of March 19, MicroStrategy holds 214,246 bitcoins, valued at $13.9 billion at current prices.

ChainCatcher news, according to Bloomberg, the Financial Accounting Standards Board (FASB) announced the first accounting rules for cryptocurrencies on Wednesday, requiring companies to measure their held cryptocurrencies at fair value. The new rules will take effect in 2025 but allow for early adoption.This rule change means that companies like MicroStrategy, Tesla, and Block will be able to record the peak and trough values of their cryptocurrency holdings. Under the new regulations, companies holding cryptocurrencies such as Bitcoin or Ethereum will need to record these tokens at fair value, which is the latest market value. Changes in fair value will be directly reflected in net income.

ChainCatcher news, the Financial Accounting Standards Board (FASB) is developing new accounting standards for crypto assets. FASB stated that the existing accounting treatment of cryptocurrencies as indefinite intangible assets fails to provide investors with the information needed for decision-making purposes. FASB mentioned that when the market price of crypto assets held by a company is lower than the purchase price, an impairment loss should be recognized, and if the market price is higher than the purchase price, gains can only be recognized upon sale. (Source link)

ChainCatcher News, the proposed accounting standards update from the Financial Accounting Standards Board (FASB) regarding the accounting and disclosure of crypto assets suggests treating crypto assets more like traditional assets, which will improve the accuracy of valuations.Currently, Generally Accepted Accounting Principles (GAAP) require companies to classify held cryptocurrencies on the balance sheet as "indefinite-lived intangible assets." Under the current GAAP, crypto assets undergo impairment testing annually. (Source link)

ChainCatcher News, the Financial Accounting Standards Board (FASB) decided in its meeting on February 1 to release the first exposure draft on cryptocurrency and digital asset standards in late March. After the draft is published, the public will have 75 days to provide feedback on the proposal.FASB Chairman Rich Jones previously stated that the board believes the term "digital assets" is too broad, so the draft may specifically establish clear accounting and disclosure rules for companies holding Bitcoin and other cryptocurrency assets. (Source link)

ChainCatcher news, according to the Wall Street Journal, the Financial Accounting Standards Board (FASB) plans to finalize several key accounting rules next year, including requiring companies to disclose more details about their cryptocurrency holdings and to list certain expenses on the income statement. In addition, FASB is committed to establishing clear accounting and disclosure rules for companies holding Bitcoin and other crypto assets. The proposed cryptocurrency-related rules are expected to be released in the first half of 2023 and will affect a small number of companies, as only a few non-crypto businesses hold cryptocurrencies. (Source link)

According to Chain Catcher news, South Korean media News1 reported that the head of the Financial Supervisory Service, Lee Bok-hyun, stated that in order to eliminate the accounting treatment uncertainties arising from the interpretation and application of International Financial Reporting Standards (IFRS), there are plans to establish accounting standards related to virtual assets, pharmaceuticals, and biotechnology. Discussions on accounting standards related to virtual assets are currently underway, and they are being listed in the notes to financial statements, or may be conducted through enhanced disclosures.In addition, Director Lee stated: "If specific companies hold virtual assets, it is allowed to record them in the notes or disclose them as other public matters, which is the current policy direction."It is reported that the Financial Supervisory Service of Korea previously discussed accounting regulation issues related to virtual assets with the Korean Accounting Standards Board and others on July 28. (source link)