New Accounting for Crypto Assets - What About Non-GAAP?

On September 6, 2023, the Financial Accounting Standards Board (FASB) voted to adopt a new rule, changing the accounting and disclosure for crypto assets from the current cost-less-impairment model to a fair value model. The standard is expected to go into effect in 2025, and early adoption is permitted. (Bloomberg and WSJ provided good overviews of the upcoming rule.)

Early this year, FASB requested comments on the proposed standard. The shift to the fair value model was widely supported by preparers, investors, and audit firms, with 82 out of 83 responders affirming that the fair value model “would provide investors with more decision-useful information”. However, the fair value accounting is bound to introduce volatility into quarterly earnings because crypto asset holders would be required to record quarterly gains and losses on the income statement.

In a LinkedIn thread, an interesting discu…