The US Financial Accounting Standards Board (FASB) is considering developing an accounting standard for digital currency and the technology that underpins it, Reuters has reported. The body, which sets accounting standards for publicly traded American companies, is assessing whether it should undertake the initiative following a request from Digital Chamber of Commerce – a Washington, DC-based trade group representing the blockchain industry.
In a letter, dated June 8, the organisation called on the FASB to create guidance to address when to recognise digital currency and how to measure it. With more companies showing interest in the cryptocurrency market, developing such guidance is crucial for the nascent industry, the Digital Chamber of Commerce argues.
“It is what we consider a mission-critical issue,” Perianne Boring, founder and CEO of the group, said, as quoted by Reuters.
“As there is a lack of clear guidance for these digital currencies, there is currently a diversity of views on the accounting,” the group wrote in its letter.
These conflicting views lead to auditing questions, which can turn off investors, and, in turn, research and development. It can also be a major hurdle for start-ups aiming to go public.
If you can’t get an audit, you can’t go public, so it’s a major hurdle,” Boring said.
Among the proponents of developing consistent accounting guidance for digital currencies is the Australian Accounting Standards Board, which in December, last year, called for global action in this area.
Some of the world’s largest accounting firms are also working to solve the issue. Last year PwC, Deloitte, EY and other accounting firms formed a new coalition aimed at promoting new standards for digital currency.