New rules in the US encourage the adoption of Bitcoin

The FABS, Financial Accounting Standards Board, announced on Wednesday that new accounting rules should come into force for the valuation of Bitcoin and cryptocurrencies of companies in the United States.

Currently, no specific accounting or disclosure rules for cryptocurrencies exist. Companies must readjust the value of their active cryptos in the balance sheet at least once a year and depreciate it if it falls below the purchase price. Conversely, if the value increases, companies can only record their gain on sale and not if they wish to keep it.

Companies want FABS to adopt fair value accounting, so they could recognize losses and gains immediately as well as treat digital assets as financial assets.

“We’ve heard from investors that they want transparency through disclosure, and the only way to achieve that is through fair value”

Gary Buesser, Board Member.

A new method in favor of Bitcoin

Thanks to this new accounting valuation, companies based in the United States could turn more to Bitcoin. The MicroStrategy founder tweeted about it:

Last year, the new CEO of MicroStrategy Phone Le, asked the FABS to review the valuation at fair value in order to stick to reality.

“We expect the disconnect between the book value reported on our balance sheet and the fair market value of our bitcoin holdings to increase significantly over time.”

These new rules should encourage companies in the United States to adopt cryptocurrencies and to invest more in them. The FABS did not give dates for the implementation of these new accounting methods, nevertheless it will remain interesting to follow this new standard in order to see the impact that this could have on the adoption of Bitcoin and other cryptocurrencies.