On May 12, 2021, Congressman Tom Emmer (MN-06) led a bipartisan letter calling on Chairman Richard Jones of the Financial Accounting Standards Board (FASB) to establish more accurate accounting standards for companies with digital asset holdings.
On June 24, the FASB announced that they have opened an Invitation to Comment (ITC) to allow stakeholders the opportunity to provide feedback on their attempt to develop these accounting standards. Comments will be accepted until September 22, 2021.
Although the FASB is the industry recognized developer of accounting principles, it has not established a set of accounting standards for virtual currency holdings. Uniform accounting standards are needed to provide companies and stakeholders clarity and consistency in order to confidently engage with these assets. Congressman Emmer's letter recommended that the FASB update its definition of financial instrument to include digital assets and consider that companies hold digital currencies for varying purposes when assigning one of four different appropriate accounting standards.
"It's encouraging to see the FASB invite stakeholders to provide input as they develop proper accounting standards. 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," said Emmer.