Regulatory transparency and better accounting standards can help restore the future of digital assets.
Markham, ON, Jan. 14, 2023 (GLOBE NEWSWIRE) -- According to a post on the FASB website, the Financial Accounting Standards Board (FASB) on January 5, 2023 updated its December 14, 2022, "provisional decision on Accounting and Disclosure of crypto assets." Updated accounting standards documents indicate that investment companies and non-profit entities should separately report financial statements for their crypto assets in accordance with corresponding requirements.
FASB has also determined that companies will be required to disclose a number of specific items regarding their crypto assets and activities:
- Significant holdings: A company would provide a listing of the specific assets they hold (with a focus on those assets that are deemed to be significant, or material) and would disclose the asset name, the quantity held, along with the cost basis and fair value of holdings
- A reconciliation or roll-forward of crypto assets for the respective period: This would include beginning balances, along with additions, dispositions, gains/losses (whether realized or unrealized), etc. that have occurred during the period to arrive at the ending balance at the end of the period. The Board may also require that companies provide supplemental information stating the cumulative gains/losses of a company’s current holdings
- The fair value of restricted assets and the nature of those restrictions: A company may have tokens that are locked up and otherwise inaccessible to them. In that case, the company would need to disclose this in the disclosures so users of financial statements are able to gain an understanding of which assets are liquid
- Follow the existing disclosure requirements outlined in ASC 820 for fair value measurements more broadly: This would specifically include classification levels within the fair value hierarchy and disclosures of related party transactions
"This is good news for many people in the digital asset industry who have been advocating this change." CFund Capital CEO Robert Levin said: "The passage of the proposal can better reflect CFund's balance sheet or financial statements. The fair value of the cryptocurrencies held will help our investors understand the financial status of CFund Capital more accurately. At the same time, it will also provide favorable assistance for the compliance operation of CFund Capital before listing."
It is reported that the FASB has added an item on digital asset accounting to its technical agenda in May 2022. In August, it decided to limit the scope of the project to fungible digital assets accounted for as intangible assets under current U.S. Generally Accepted Accounting Principles (GAAP). At the meeting on October 12, it was initially decided to require the encrypted assets within the scope to be measured at fair value. The requirement will apply to both public and private companies.
FASB received more than 400 comments in its comment invitation from reviewers who supported fair-value measurement.
Anthony Tuths, KPMG's head of Alternative investment tax, said: "The proposal is likely to benefit wider mainstream cryptocurrency adoption, with FASB just clearing the way for new crypto accounting guidelines that will allow most cryptocurrencies to be booked at fair value. When the guidance goes into effect, it will greatly help pave the way for wider adoption."
"The new FASB cryptocurrency Accounting standards will enable companies to more accurately report their current crypto assets in their financial statements," said Miles Brooks, director of strategy at crypto tax firm CoinLedger.
"CFund Capital's announcement of financial disclosure in accordance with the latest FASB cryptocurrency accounting standards will greatly promote mainstream acceptance of crypto assets and bring more traditional investors to the crypto industry," said Levin, CEO Robert of CFund Capital.
By the beginning of 2023, CFund Capital has set up entity companies in countries and regions in North America, Europe and the Asia-Pacific region to provide local users with crypto asset management and market maker services.
At present, the crypto fund platform represented by CFund Capital is building a comprehensive investment service platform that integrates NFT, DeFi, GameFi, CEX, Payment, and digital wallet. CFund Capital has issued platform token CFT. With the global business layout of CFund, CFT will play a crucial role in the comprehensive investment service platform of CFund.
In the next three years, CFund will make use of the capital market to accelerate the construction of global strategic layout, consolidate existing advantages, actively explore the upstream and downstream growth opportunities of the blockchain industry, constantly improve the international core competitiveness of CFund, and strive to build the company into a world-class crypto asset management and crypto market making commodity brand.
For more information about CFund Capital, please visit the CFund website (www.CFund.cc) and CFund's official Twitter account (@CFundCC).
Company name: CFund Capital Canada Inc