Last updated on 30 July 2026
FASB’s ASU 2023-08 implementation changes how companies account for cryptocurrency on their financial statements, making things clearer and more relevant for investors and business owners.
Accounting for crypto assets has been a challenge for many years. Until recently, US accounting rules treated crypto like “indefinite-lived intangible assets.” That meant businesses had to write down the value when prices dropped, but they couldn’t show gains unless they sold the asset. This didn’t reflect the real economic value of crypto holdings. Now, that’s changing.
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-08, called “Accounting for and Disclosure of Crypto Assets.” It gives clear rules for measuring certain crypto assets at fair value, the current market price, at every reporting date.
Why Was FASB’s ASU 2023-08 Update Needed?
Under the old accounting rules, companies holding crypto had to treat it like goodwill or a trademark. If the value dropped below what they paid, they had to write it down (an impairment). But even if the value later went up, they weren’t allowed to show that increase in value unless they sold it.
This caused problems:
- It made balance sheets look worse than reality.
- It didn’t reflect true performance for investors or decision-makers.
- It discouraged some companies from holding crypto.
In a world where companies like Tesla, MicroStrategy, and others hold large amounts of Bitcoin or other crypto, this became a big issue.
FASB responded after years of pressure from companies, investors, and accounting professionals. ASU 2023-08 is the result.
What Does FASB’s ASU 2023-08 Actually Say?
Here are the key points of the new rule:
Fair Value Measurement
Companies must now measure certain crypto assets at fair value each reporting period and recognise gains and losses in net income. This means if bitcoin’s price goes up, the company can now show that increase on its financial statements, even if they haven’t sold it.
Clear Disclosures
Companies must also provide detailed information in their notes, like:
- Cost basis of crypto assets
- Fair value at the end of the period
- Where the gains or losses are reported in the income statement
- Any restrictions on use or sale
Scope Limitations
Not all digital assets are included. To qualify, the asset must:
- Be fungible (each unit is the same, like bitcoin or ether)
- Not provide enforceable rights to goods/services or claims on an entity (e.g., not tokenised equity)
- Be created or reside on a blockchain or similar technology
- Not be issued by the reporting entity or its related parties
So, NFTs, security tokens, and non-fungible governance tokens are excluded for now. The focus is mostly on things like Bitcoin and Ether.
When Does It Start?
For fiscal years beginning after December 15, 2024, including interim periods, ASU 2023-08 will be in effect.
For instance, the new regulations take effect on January 1, 2025, if that is when a company’s fiscal year begins. Early adoption is allowed, so some businesses are already applying the changes now.
How Will FASB’s ASU 2023-08 Update Affect Companies?
1. Better Reflection of Economic Reality
Let’s say a company buys 10 bitcoin at $20,000 each. Under old rules, if Bitcoin dropped to $15,000 and then rose to $50,000, the company would only show a $50,000 loss, even if their assets are now worth $500,000.
Under ASU 2023-08, the company would now be able to show a $300,000 gain in net income as bitcoin rises. That’s a more accurate reflection.
2. Volatility in Earnings
Fair value accounting brings more volatility to profit and loss statements. If crypto prices swing sharply, so will reported income. That’s something management and investors will need to prepare for.
3. Improved Transparency
The new disclosure requirements mean more visibility for stakeholders. Investors can better understand a company’s exposure to crypto and its impact on financial results.
Real-World Examples
MicroStrategy, which holds over 200,000 bitcoins, often had to show impairment losses—even though its bitcoin was worth far more than its balance sheet reflected. However, with ASU 2023-08 in effect, their financial reports will now reflect the real-time value of those assets. As a result, investors and stakeholders will have a clearer, more accurate picture of the company’s crypto holdings.
Tesla, another high-profile Bitcoin holder, may also benefit from the transparency and flexibility this update allows.
Are There Any Challenges?
Yes, a few:
- Volatility management: Accounting for price changes in real time requires active monitoring.
- Internal systems: Companies need processes and controls to track fair values, especially with multiple tokens or wallets.
- Interpretation issues: Grey areas remain, such as how to treat wrapped tokens or derivatives based on crypto.
- Tax mismatches: Financial accounting may show fair value gains, but tax rules might only recognise gains on sale.
What Should Businesses Do Now?
If your company holds crypto, or plans to, you should:
- Review which assets fall under ASU 2023-08
- Prepare to track fair values regularly
- Update accounting systems and controls
- Revisit your crypto accounting policies
- Train your finance team and auditors on the new rules
And perhaps most importantly, speak to professionals who understand both crypto and accounting. This is where Crypto Accountants can help.
Final Thoughts
FASB’s ASU 2023-08 brings much-needed clarity and modernisation to crypto accounting in the US. For companies holding digital assets, this change improves transparency, relevance, and accuracy in financial reporting.
However, it also introduces new complexities, particularly for finance teams accustomed to more stable asset classes. Therefore, the best approach is to get ahead of the curve now. To begin with, prepare your systems; next, educate your team; and finally, work with crypto-focused accountants who can guide you through the transition. By taking these steps proactively, you can navigate the changes with confidence and ensure compliance from day one.
Get in touch with Crypto Accountants. We specialise in crypto financial reporting, bookkeeping, and compliance. Whether you are a startup or an established company, we’ll help you stay compliant, accurate, and ahead of the game.
People Also Ask
What is the main change in ASU 2023-08?
It requires companies to account for eligible crypto assets using fair value, with gains and losses recorded in net income.
Does this apply to all crypto assets?
No. It applies mainly to fungible crypto assets like bitcoin and ether. NFTs and tokenised securities are excluded.
Will this make financial reports more volatile?
Yes, because fair value accounting means crypto price swings will affect reported income more directly.
Can companies adopt ASU 2023-08 early?
Yes, early adoption is allowed, and some companies have already begun using it.
How does this affect crypto taxes?
Tax rules are separate. ASU 2023-08 affects financial reporting, not tax treatment. But differences between the two may need careful reconciliation.
