Reports for crypto activities
Financial statements
The new proposal from FASB requires that crypto assets be separated from a company's intangible assets in the balance sheet and disclosed separately at fair value measurement; in the income statement, changes in the fair value of crypto assets should be separately presented from changes in the carrying amount of other intangible assets. Although the new FASB proposal does not change the reporting requirements for cash flow statements, if crypto assets are used as non-cash intermediaries (for example, when transferring goods and services to customers to obtain crypto assets) during normal business processes and immediately exchanged for cash, they need to be reported as operating cash inflows.
Balance Sheet
Disclose corresponding items in the balance sheet according to the types of crypto assets involved in the project.
Income statement
In the income statement, it is necessary to report the revenue and expenses related to crypto activities, as well as the gains/losses caused by crypto activities.
Disclosure statements
In response to the characteristics of crypto assets, the new proposal from FASB clarifies the requirements for off-balance sheet disclosures, including clear disclosure of significant holdings, restrictions of crypto assets and crypto assets roll forward.
Significant holdings
At interim and annual reporting periods, an entity shall disclose the following for each significant (as determined by the fair value) crypto asset holding:
a. Name of the crypto asset
b. Cost basis
c. Fair value
d. Number of units held.
Restrictions of crypto assets
For interim and annual reporting periods, an entity shall disclose the following information for crypto assets subject to contractual sale restrictions at the balance sheet date:
a. The fair value of restricted crypto assets
b. The nature and remaining duration of the restriction(s)
c. Circumstances that could cause the restriction(s) to lapse.
Crypto assets roll forward
At annual reporting periods, an entity shall provide a reconciliation, in the aggregate, of activity from the opening to the closing balances of crypto assets, separately disclosing changes during the period attributable to the following:
a. Additions.
b. Dispositions.
c. Gains included in net income for the period, determined on a cryptoasset-by-crypto-asset basis. Each crypto asset holding that has a net gain from the change in the fair value as included in net income for the period shall be included in the gains line.
d. Losses included in net income for the period, determined on a cryptoasset-by-crypto-asset basis. Each crypto asset holding that has a net loss from the change in the fair value as included in net income for the period shall be included in the losses line.
An entity shall disclose the following information about the reconciliation:
a. A description of the nature of activities that result in additions (for example, purchases, receipts from customers, or mining activities) and dispositions (for example, sales or use as payment for services)
b. Total amount of realized gains and losses from dispositions
c. If not presented separately, the line item in which gains and losses are reported in the income statement.
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