FASB writes accounting rules for crypto — at last

For publicly-traded companies, the risk of holding crypto on their balance sheets was that they could only realize losses on them — but that's no longer the case.

Driving the news: The Financial Accounting Standards Board, which sets accounting standards for U.S. public and private companies, voted this past Wednesday to set a new rule on cryptocurrency accounting and disclosure that requires businesses to recognize losses and gains, immediately.

Why it matters: Bitcoin won't be a drag on balance sheets — welcome news for the 40-odd publicly traded companies holding $5.7 billion worth of them, per BitcoinTreasuries.net.

Flashback: Until now, there haven't been specific accounting rules for crypto.

• Businesses treated them as intangibles, which for companies like MicroStrategy meant valuing its bitcoin holdings at the lowest price for the given reporting period — resulting in huge losses on coins bought during better times.
• Under this accounting treatment, gains on bitcoin were only reported when sold.

Details: The FASB is set to formally announce the new standard before the year's end, and the new rule is expected to go into effect for the 2025 calendar year.

• Companies have the option to adopt it earlier.

Quick take: Bitcoin won't just go down on balance sheets anymore.