In the United States, the arrival of a new accounting rule concerning the valuation of Bitcoin and other cryptocurrencies in the balance sheets of companies, could encourage them to take an interest in our ecosystem.
The book valuation of Bitcoin changes in the United States
Last week, the Financial Accounting Standards Board (FASB) disclosed that new accounting rules would come into force regarding the valuation of Bitcoin and other cryptocurrencies on corporate balance sheets in the United States.
The FASB is a non-governmental association, to which the Securities and Exchange Commission (SEC) has entrusted the competences to 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 saw their price fall below the cost of acquisition. However, the reverse maneuver was only possible in case of transfer of these cryptocurrencies.
This could then give rise to inaccuracies, particularly exacerbated in the event that companies like MicroStrategy hold large quantities of BTC, with no intention of selling them. This lack of efficiency now seems to be overcome, with the adoption of so-called “fair value” accounting for cryptocurrencies.
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A measure in favor of the adoption of cryptocurrencies
With an accounting valuation closer to reality, this new measure could make it easier for US-based companies to switch to Bitcoin.
In any case, this is what Michael Saylor, the founder of MicroStrategy thinks:
“The Financial Accounting Standards Board on Wednesday said companies should use fair-value accounting for measuring bitcoin and other crypto assets” – @WSJ
This is a major milestone on the road to institutional #bitcoin adoption.https://t.co/b9r8Av9uys
— Michael Saylor⚡️ (@saylor) October 12, 2022
This company, notably famous for its strong appetite for Bitcoin, has 130,000 of them when writing these lines.
Last year, Phong Le, the new CEO of MicroSrategy, wrote to the FSAB by advocating for valuation at fair value. According to him, this option was the most logical in order to stick 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 requests, it will be interesting to see the impact of this new standardon the adoption of cryptocurrencies by institutional investors in the future.
👉 Also in the news – Tesla is keeping its Bitcoins (BTC) for the third quarter, but not buying more
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Source: The Wall Street Journal
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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