Process to create accounting standards for virtual currency holdings begins after Emmer request

Following a request by U.S. Rep. Tom Emmer (R-MN) urging the Financial Accounting Standards Board (FASB) to establish more accurate accounting standards for companies with digital asset holdings, the board on June 24 opened a related Invitation to Comment (ITC). 

“After urging the FASB to take the lead and issue guidance, I am hopeful that this step will ensure the creation of accounting standards that make sense,” said Rep. Emmer.  

Comments in the ITC will be accepted until Sept. 22 to allow stakeholders the opportunity to provide feedback on the board’s future standard-setting agenda, according to the FASB notice, which said such feedback on the ITC “is essential in ensuring that the FASB continues to allocate its finite resources to achievable standard-setting projects that fulfill its primary mission of improving financial accounting and reporting standards and addressing topics that are of the highest priority to its stakeholders.”

“It’s encouraging to see the FASB invite stakeholders to provide input as they develop proper accounting standards,” Rep. Emmer said. “For too long, companies with virtual currency holdings have been in the dark, unable to properly comply.”

In a May 12 letter sent to FASB Chairman Richard Jones, Rep. Emmer led six of his colleagues in requesting that as the market capitalization of bitcoin continues to surpass USD $1 trillion, the FASB should establish accounting standards that afford companies clear alternatives to determining the accounting treatment for digital assets maintained on their books.

“It is important that standards be set to consider the use of the asset and to assure consistency in financial reporting. The impact of digital assets on financial reporting of public and non-publicly traded companies is being felt,” the members wrote. “Failure to establish sound authoritative guidance in accounting for these assets jeopardizes the integrity of financial reporting. Accordingly, the FASB must promptly address this need for guidance.”