Unlocking Litecoin: FASB's Innovative Standards Redefine How Companies Can Hold Litecoin
- Shan Belew
- Dec 13, 2023
- 1 min read
The FASB just announced a new way to account for companies to hold and manage crypto assets like Bitcoin, Litecoin, and others. The FASB, recognized by the U.S. Securities and Exchange Commission as the designated accounting standard setter for public companies, recently published an accounting standard update (ASU). A media advisory was released on 12-13-23. Interestingly, this marks the last date, some 13 years ago, that Satoshi last signed off from the Bitcoin Talk Forum.
The ASU report No. 2023/08 December 2023 outlines the new accounting standards for crypto assets. In the report it doesn't specify any individual crypto asset like Bitcoin or Litecoin but does specify requirements for which type of assets would be covered.
Do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets
Are created or reside on a distributed ledger based on blockchain or similar technology
Are secured through cryptography
Are fungible
Are not created or issued by the reporting entity or its related parties.
Litecoin and Bitcoin both conform to the outlined criteria, recognized as digital commodities by the CFTC, and stand as the two longest-running blockchain networks. Both cryptocurrencies utilize cryptography for ledger security and employ proof of work. Currently, fungibility, though present in both Bitcoin and Litecoin, exists on a sliding scale. With that improvements can be made on fungibility such as Litecoin's MWEB feature (discussed in a separate article).
The ASU's effective date is set for the fiscal year beginning after December 15, 2024, with early adoption permitted, subject to meeting certain requirements.
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