Challenges Of Defining Virtual Currency - Recent Observations From FASB

At its August 31, 2022 meeting, the FASB discussed the scope of its digital asset project (see meeting handout here). This FASB project was adopted in May 2022 with the objective “to improve the accounting for and disclosure of certain digital assets.” Well a good question is – what are digital assets and which should be addressed in the FASB project.

One part of the handout aims to identify characteristics that can help distinguish among various digital assets. It notes that specifying that the assets are “created or reside on blockchains and are secured through cryptography” will distinguish cryptocurrencies or crypto assets form other digital intangible assets such as software and data.

FASB also notes that terms such as “store of value” and “medium of exchange” are often used but “may not be helpful in defining” the scope of the FASB digital assets project because:

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