The Financial Accounting Standards Board (FASB) voted to propose a new rule on the accounting for and disclosure of crypto assets.

Companies and accountants long advocated for this move, The Wall Street Journal reported. It has been under discussion at the FASB since December 2021, according to a FASB project update. Currently, there are no specific accounting or disclosure rules for crypto assets. The proposal would require businesses to use fair-value accounting for bitcoin and other crypto assets, the Journal reported.

Companies with crypto holdings now account for their crypto holdings as indefinite-lived intangible assets, the Journal reported. Accounting for Bitcoin and Other Cryptocurrencies, a 2018 AICPA report, came to the conclusion that, "Ultimately, the best fit for cryptocurrencies under current U.S. GAAP is to account for them as intangible assets."

The proposal would exclude from the rule crypto assets created or issued by the reporting entity or their related parties. It would also exclude assets commonly referred to as “wrapped tokens." These allow crypto assets from one blockchain to be represented and used on a different blockchain, according to the Journal. In addition, the FASB reported, "The Board decided to not modify the scope criteria to specify that the distributed ledger or blockchain must be public."

“We continue to see these as positive steps to improve investor transparency and enhance the regulated financial reporting of digital assets,” software provider MicroStrategy CFO Andrew Kang told the Journal.

The FASB directed its staff to draft a proposed Accounting Standards Update. The Journal reported that the board aims to do so by late March, and it will be subjected to public comment for 75 days. The board could then issue a final rule as early as the fourth quarter of this year, a spokeswoman told the Journal.