Navigating the world of crypto assets in financial reporting is about to get a bit more straightforward—and a lot more transparent—with the Financial Accounting Standards Board (FASB) rolling out its new fair value measurement rules starting in 2025. If your company holds cryptocurrencies, this change isn’t just a minor tweak; it’s a significant shift in how you’ll recognize and disclose these assets on your financial statements. Preparing for this now can save you headaches later and give your investors a clearer picture of your crypto holdings.

To start, the big change with the new FASB Accounting Standards Update (ASU) 2023-08 is that crypto assets will no longer be accounted for like intangible assets measured at cost less impairment. Instead, entities will measure these assets at fair value every reporting period, with gains or losses flowing through net income. This means your crypto holdings will reflect their current market value rather than just the cost you paid or an impaired value. It brings your financials closer to the economic reality, which is a win for transparency and investor confidence[1][3].

But what exactly qualifies as a crypto asset under this standard? The FASB defines eligible crypto assets as those that:

• Are intangible assets (not providing enforceable claims to goods or services),
• Are created or reside on a blockchain,
• Are secured through cryptography,
• Are fungible (interchangeable), and
• Are not issued by the reporting entity or its related parties[1].

If your holdings meet these criteria, the fair value measurement applies.

Implementing this new approach requires a few key steps to get right. First, you’ll want to establish reliable processes for fair value measurement. This can be tricky because crypto markets are notoriously volatile and sometimes illiquid. Look at how you currently track market prices. Are you pulling data from multiple exchanges? Do you have a consistent source for pricing? Under ASU 2023-08, you need to measure fair value using the market price from the principal or most advantageous market, consistent with GAAP guidance on fair value measurement[6]. For example, if Bitcoin trades on several exchanges, you need to identify which market provides the best pricing and liquidity to represent fair value accurately.

It’s also important to consider the fair value hierarchy. This hierarchy ranks inputs used to determine fair value from most reliable (Level 1: quoted prices in active markets) to least reliable (Level 3: unobservable inputs). For many major cryptocurrencies like Bitcoin and Ethereum, Level 1 inputs are usually available. But for smaller or more obscure tokens, you might rely on less observable inputs, making your valuation more complex and subjective[6]. Be prepared to document your valuation methodology and the inputs you use.

Another aspect that might catch companies off guard is the recognition of changes in fair value in net income. Unlike the previous approach where impairments were recognized but recoveries were not until sale, the new standard requires you to report unrealized gains and losses each reporting period. This means your income statement will likely see more volatility. To handle this, consider enhancing your forecasting and budgeting models to accommodate this variability and prepare your management and investors accordingly.

Disclosures will also be more detailed under the new rules. You’ll need to provide additional information about your crypto holdings in both annual and interim reports. This includes:

• The fair value of crypto assets held,
• Significant individual holdings (though “significant” is judgment-based, not a set threshold),
• Any contractual sale restrictions,
• Changes in holdings during the period,
• The method used to determine cost basis (FIFO, average cost, specific identification, etc.)[1][4].

Being transparent here is key. For instance, if your company holds a significant amount of Bitcoin as a strategic asset, clearly describing your policy on what counts as significant and how you track cost basis will help analysts understand your exposure and risk.

One practical example: Let’s say your company owns 1,000 Ethereum tokens purchased at an average cost of $2,000 each. At the end of the reporting period, the market price is $1,800. Under the new rules, you’ll recognize a $200,000 unrealized loss (1,000 tokens × $200 loss per token) in your net income, even though you haven’t sold any tokens. If the price bounces back in the next period to $2,200, you then recognize a $400,000 unrealized gain. This back-and-forth impacts reported earnings, so your finance team needs to be ready to explain this volatility to stakeholders.

Besides accounting and reporting, internal controls must be updated. Because crypto assets are digital and often held with third-party custodians, ensuring the integrity of your tracking and valuation processes is critical. Controls should address the accuracy of price data, the completeness of holdings records, and the authorization of transactions. Many companies are also adopting blockchain analytics tools to enhance transparency and control[3].

If your company has multiple types of crypto assets, note that the ASU doesn’t replace all existing guidance. Some crypto assets might fall outside the scope and continue to be accounted for under older standards. It’s worth consulting your accounting advisors to classify your holdings correctly.

Looking ahead, keep an eye on ongoing regulatory developments. In 2025, U.S. regulatory bodies like the SEC’s Crypto Task Force and legislation such as the GENIUS Act are shaping the environment for digital assets. These efforts may influence accounting practices and disclosure requirements further, so staying informed and flexible is important[5].

To sum up, here’s a checklist to prepare for FASB’s 2025 fair value measurement of crypto assets:

• Identify which crypto assets fall under ASU 2023-08.
• Develop a consistent fair value measurement process using reliable market data.
• Review and document your valuation techniques and inputs in accordance with the fair value hierarchy.
• Adjust your financial reporting systems to recognize unrealized gains/losses in net income each period.
• Enhance disclosures about significant holdings, cost basis methods, sale restrictions, and changes in holdings.
• Update internal controls to ensure accurate tracking and valuation.
• Communicate with stakeholders about how this new accounting impacts earnings volatility.
• Stay informed on regulatory changes impacting crypto asset accounting.

Getting ahead of these changes means less scrambling when the new standards take effect and more confidence in the financial reports you produce. Plus, it sends a strong signal to investors and auditors that your company is serious about transparency and good governance in the fast-moving world of digital assets. If you start now, you’ll be well-positioned to handle the FASB’s 2025 crypto asset fair value requirements with confidence.