The Growing Acceptance of Cryptocurrency in the Financial Arena: The United States’ First Digital Asset Accounting Rules

Written By: Alyssa M. Maldonado


In recent years, the digital asset class has seen substantial growth and prosperity. To illustrate, by 2024, it is predicted that “26 million US investors will own cryptocurrencies, according to a 2023 market forecast.” Despite this statistic, investments in cryptocurrencies by institutions and companies in the United States remain relatively low. For example, only 19 publicly traded U.S. companies hold Bitcoin. In response, to increase the use of digital assets by institutional investors and to improve the experiences of entities who currently hold digital assets, new accounting standards pertaining to digital assets have been issued. On December 13, 2023, the Financial Accounting Standards Board (“FASB”), the regulatory body that sets general accounting principles in the U.S., published an Accounting Standards Update (“ASU”) providing guidelines on accounting and disclosure for digital assets.

Standards Prior to the FASB’s New Guidelines

Prior to the new guidelines published by the FASB, digital assets were accounted for as “intangible assets.” This meant that entities holding digital assets could only record their value at the lowest price since the digital asset was purchased. Thus, “if the price [of a digital asset] went lower than what companies bought it for, they had to take an impairment charge on their books, even if they didn’t sell. But if the price went up, they couldn’t receive any benefit on their books unless they sold.” This method, especially given the volatile nature of the cryptocurrency market, often resulted in companies appearing to be worth less than their actual market value, deterring investment in digital assets.

When issuing the new guidelines for digital assets, the FASB acknowledged the faulty system of accounting applied to cryptocurrencies, stating in its ASU that “[a]ccounting for only the decreases, but not the increases, in the value of crypto assets in the financial statements until they are sold does not provide relevant information that reflects (1) the underlying economics of those assets and (2) an entity’s financial position.”

The New Cryptocurrency Accounting Guidelines

The FASB’s new guidelines mark a significant shift in how companies report on digital assets. Under the new guidelines, which are the first of their kind in the United States, businesses will be required to “disclose the value of cryptocurrencies based on their market prices at the end of each reporting year.” This disclosure method is known as “fair value” accounting. Unlike previously, where entities who held digital assets could only value them at their lowest price since they were purchased, under the new fair value accounting standard entities can report “unrealized gains and losses to get an actual benefit on their books if the price of the asset increases (without having to sell to capture it).”

By adopting fair value accounting for digital assets, entities are more likely to include digital assets on their balance sheets and retain them long term, since they can now report “appreciation without having to sell anything.” The FASB’s new guidelines will further the goal of transparency in the financial accounting arena for entities who hold digital assets. Furthermore, it will prevent inaccurate and underestimated financial performance and earnings reports for companies who hold digital assets.

Scope of the New Guidelines: Not All Digital Assets are Covered

It is important to note that the FASB’s new guidelines do not apply to all digital assets. Specifically, non-fungible tokens, stablecoins, and issuer-created tokens are excluded. The new accounting guidelines specifically apply to digital assets that: (1) are intangible; (2) do not provide the holder with enforceable rights to or claims on underlying good, services or other assets; (3) are created or reside on a distributed ledger based on blockchain or similar technology; (4) are secured through cryptography; (5) are fungible; and (6) are not created or issued by the reporting entity or its related parties.

Effective Date

The FASB’s newly published guidelines will go into effect on December 15, 2024. However, companies are permitted to choose to adopt and follow the new accounting guidelines prior to December 15, 2024.


The FASB’s new accounting guidelines reflect the growing use and acceptance of digital assets within financial institutions and corporate America. The new guidelines will result in more accurate financial reports for entities who currently hold digital assets and may incentivize those without digital assets to consider incorporating them into their financial holdings. Overall, the FASB’s new guidelines demonstrate that as the use of digital assets continues to expand, various sectors will need to adapt and evolve accordingly.


Denise Lugo, FASB Publishes its First Direct Accounting Standard for Reporting Crypto Assets, Thomson Reuters (Dec. 14, 2023).

Derek Andersen, US accounting standards board rules will reflect institutional crypto assets’ fair value, Cointelegraph (Dec. 14, 2023).


Meaghan Yuen, Cryptocurrency: What is it and how it benefits banking and finance, Insider Intelligence (Oct. 18, 2023).

Nicola M. White, First US Crypto Accounting Rules Capture Token Highs, Lows, Bloomberg Tax (Dec. 13, 2023).

Nik Hoffman, CRYPTO TO BE MEASURED AT FAIR VALUE UNDER NEW FASB RULES, Bitcoin Magazine (Dec. 13, 2023).

Peter Chawaga, New FASB Crypto Standard Captures Fair Value, Benefits of Price Gains, (Dec. 13, 2023).