In the United States, a new accounting rule regarding the valuation of Bitcoin (BTC) and other cryptocurrencies in the balance sheets of companies may encourage them to take an interest in our ecosystem.
Bitcoin book valuation varies in the United States
Last week, the Financial Accounting Standards Board (FASB) revealed that new accounting rules would come into effect regarding the valuation of Bitcoin and other cryptocurrencies on corporate balance sheets in the United States.
The FASB is a non-governmental association, entrusted with powers by the Securities and Exchange Commission (SEC). establish accounting standards in the country.
Until then, the accounting classification of cryptocurrencies allowed American companies that held them to readjust their value in the balance sheet. if these see that their price has fallen below the acquisition cost. However, the reverse maneuver it was only possible to transfer those currencies.
This could then cause inaccuracy, especially worse where companies like MicroStrategy hold large amounts of BTC, with no intention of selling them. This lack of efficiency now seems to be overcome, by adopting so-called “fair value” accounting for cryptocurrencies.
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Measure in favor of accepting cryptocurrencies
With accounting valuation closer to reality, this new measure is it could make it easier for US-based companies to switch to Bitcoin.
In any case, this is what Michael Saylor, founder of MicroStrategy thinks:
“The Financial Accounting Standards Board said Wednesday that companies should use fair value accounting to measure bitcoin and other crypto assets” – @WSJ
This is a major milestone on the road to the institute #bitcoin adoption https://t.co/b9r8Av9uys
— Michael Saylor⚡️ (@saylor) October 12, 2022
This company, particularly famous for its strong interest in Bitcoin, they have 130,000 while writing these lines.
Last year, Phong Le, the new CEO of MicroStrategy, wrote to the FSAB by recommending a fair value valuation. According to him, this choice was the most logical to adhere to reality:
“We expect the disconnect between the book value reported on our balance sheet and the fair market value of our bitcoin holdings to increase significantly over time. »
While the FSAB has considered these applications, it will be interesting to see the impact of this new standardon future adoption of cryptocurrencies by institutional investors.
👉 Also in the news – Tesla is holding its Bitcoins (BTC) for the third quarter, but not buying more
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Source: The Wall Street Journal
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