Crypto accounting (fair value)

For years, US companies under US GAAP treated crypto such as bitcoin as indefinite-lived intangible assets. They recorded it at cost and wrote it down whenever the price fell below that cost, but could not write it back up when prices recovered. A company could show large impairment losses even while its bitcoin was worth far more than it paid.

The Financial Accounting Standards Board changed that with ASU 2023-08, which requires in-scope crypto-assets to be measured at fair value, with gains and losses flowing through net income. It applies to fiscal years starting after 15 December 2024, with early adoption allowed. The change made reported results of bitcoin treasury companies far more volatile but more faithful to market value.

Under international standards (IFRS), used in the EU and many other countries, crypto is generally treated as an intangible asset under IAS 38, at cost or revalued, or as inventory for firms that trade it, so balance sheets can differ by jurisdiction. Accounting treatment is separate from tax treatment.