MicroStrategy announced that a proposal from the U.S. Financial Accounting Council (FASB) would allow cryptocurrency firms to record crypto assets held on their balance sheets at fair value.</div
MicroStrategy officials believe U.S. accounting principles (GAAP) require a company to use the original purchase price when recording the carrying value of indefinite-lived intangible assets, and then record the accumulated impairment.
For MicroStrategy, this means that the assets held on the company’s balance sheet are valued at only $2 billion, which is half the fair market value.
“Fair value is a more useful and balanced accounting model for investors than the current model, in which only decreases in fair value are recognized and subsequent increases are not.
The current model reflects a distorted picture of the balance sheet of crypto-assets and can be misleading to investors unfamiliar with accounting standards,” MicroStrategy said.
Financial Accounting Standards Board accepts proposals to update U.S. accounting standards for cryptocurrency companies by June 6.
MicroStrategy urged all companies interested in change to support the FASB initiative.
“Accounting for the book value of crypto-assets at fair value would allow investors to adequately assess the risk of return on investment, thereby providing a basis for investment decisions based on economic reality,” MicroStrategy commented on the proposal.
Earlier, MicroStrategy co-founder Michael Saylor said that the company is exploring Bitcoin Ordinals project opportunities for innovation.