The US regulators are working on improved accounting standards for Bitcoin (BTC) in order to effectively capture the rises and dips. The long-awaited accounting rules for Bitcoin and other cryptocurrencies are due in the US.
The new regulations shall come by the end of the year. They will mandate that companies holding or investing in cryptocurrency must disclose their holdings at fair value. This valuation method reflects the most current asset value, including potential rebounds in value following price declines.
Although these forthcoming standards are expected to introduce greater volatility into the financial reports of crypto-intensive companies, they represent an improvement over the existing practices, according to feedback received by the Financial Accounting Standards Board (FASB) from companies and accounting professionals over several months.
FASB stated that the rules will go into effect as soon as 2025, however, the companies still have the option to apply for them early.
FASB had previously declined three separate requests dating back to 2017 to establish regulations for cryptocurrencies, citing the limited material use of Bitcoin by companies. However, their stance evolved with significant investments in blockchain-traded assets by major corporations like Tesla and MicroStrategy.