Accounting
We advocate for clear and consistent accounting standards for digital assets. The lack of formal guidance remains one of the biggest barriers preventing corporate investors from gaining exposure to digital assets and integrating them into financial reporting.
Digital assets don’t fit neatly into existing accounting rules, which creates confusion about how they should be treated. Current accounting requirements can also be burdensome, making it harder for digital assets to grow, innovate, and attract investment.
Establishing robust accounting standards for digital assets to enhance transparency, consistency, and trust in financial reporting within this rapidly evolving sector.
The Policy Issues
Fair-Market Value Accounting
Fair-market value accounting for crypto assets refers to the financial practice of recording these assets at their current market price, reflecting real-time valuation in financial statements. This method ensures that the reported value of cryptocurrencies is consistent with the price at which they could be exchanged in an orderly transaction between market participants at the measurement date.
We strongly support fair value accounting for crypto assets, advocating for its adoption as it provides a transparent and accurate representation of an entity’s financial position.
Lack of Accounting Standards
The rapidly evolving digital asset sector, including cryptocurrencies, tokens, and other forms of digital value, poses unique challenges for accounting because there are no established standards. This lack of guidance makes it difficult for companies to accurately report the value and risks of their digital assets, leading to uncertainty and inconsistent financial statements.
To address this, we are actively advocating for clear and consistent accounting rules. Our organization engages with policymakers, accounting standards boards, and industry stakeholders to help develop comprehensive standards for digital assets. By enabling businesses to report their holdings transparently and consistently, we aim to build greater trust and stability in the market.
Recent Updates
Our Impact
We’ve made impactful strides in the industry, from releasing a key guide on proof of reserves to leading the charge to overturn SEC’s SAB 121.
Leading the Charge on Proof of Reserves
We released the industry’s most comprehensive resource, the Practitioner’s Guide, setting a standard for proof of reserves across the digital asset industry. The guide establishes benchmarks for transparency and accountability, reinforcing robust financial practices.
Pioneered Fair Value Accounting for Crypto Assets
We successfully spearheaded the adoption of fair value accounting practices for crypto assets, providing a more accurate and transparent financial reporting framework.
Nullifying SAB 121
Partnered with lawmakers on Capitol Hill to pass a bipartisan resolution aimed at nullifying SAB 121, the largest barrier to trusted custodians managing cryptocurrencies. While the resolution was vetoed, ongoing initiatives continue to address this challenge.