Officials are crediting the efforts of U.S. Rep. Tom Emmer (R-MN) in aiding the Financial Accounting Standards Board (FASB) in opening an Invitation to Comment (ITC) regarding accounting standards for digital asset holdings.
On May 12, 2021, Emmer led a bipartisan letter calling on FASB Chairman Richard Jones to establish more accurate accounting standards for companies with digital asset holdings. Jones announced on June 24 that the organization would allow stakeholders the opportunity to provide input on the attempt to develop the accounting standards. Comments will be accepted until Sept. 22, 2021, per authorities.
“It’s encouraging to see the FASB invite stakeholders to provide input as they develop proper accounting standards,” Emmer said. “For too long, companies with virtual currency holdings have been in the dark, unable to properly comply. After urging the FASB to take the lead and issue guidance, I am hopeful that this step will ensure the creation of accounting standards that make sense.”
According to Emmer, the FASB has not issued accounting standards for digital assets, resulting in companies conforming to non-authoritative guidance, impacting stakeholders and financial statements.
Emmer’s correspondence encouraged the FASB to update the financial instrument definition to include digital assets and consider companies holding digital currencies for varying purposes when assigning one of four different appropriate accounting standards.
“It is important that standards be set to consider the use of the asset and to assure consistency in financial reporting,” the correspondence concluded. “The impact of digital assets on financial reporting of public and non-publicly traded companies is being felt. Failure to establish sound authoritative guidance in accounting for these assets jeopardizes the integrity of financial reporting.”