What are the key provisions of ASC 820 that apply to cryptocurrencies?

4 answers

• Dec 29, 2021 · 3 years ago
  ASC 820, also known as the Fair Value Measurement standard, provides guidance on how to determine the fair value of assets, including cryptocurrencies. When it comes to cryptocurrencies, ASC 820 requires entities to consider the market participants' perspective and use observable inputs to determine the fair value. This means that the valuation should be based on actual market prices or other observable market data. The standard also requires entities to disclose the valuation techniques and inputs used in determining the fair value of cryptocurrencies. By following ASC 820, entities can provide more transparency and consistency in the valuation and disclosure of cryptocurrencies.
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• Dec 29, 2021 · 3 years ago
  The key provisions of ASC 820 that apply to cryptocurrencies are aimed at ensuring that the valuation of cryptocurrencies is done in a transparent and consistent manner. The standard requires entities to use observable inputs, such as market prices, to determine the fair value of cryptocurrencies. This means that entities cannot rely solely on their own assumptions or internal models. By using observable inputs, entities can provide more reliable and comparable valuations. Additionally, ASC 820 requires entities to disclose the valuation techniques and inputs used in determining the fair value of cryptocurrencies. This disclosure helps users of financial statements understand how the fair value was determined and assess the reliability of the valuations.
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• Dec 29, 2021 · 3 years ago
  According to ASC 820, cryptocurrencies are considered Level 1 assets, which means that their fair value is determined using observable inputs, such as quoted prices in active markets. This classification reflects the high level of liquidity and transparency in cryptocurrency markets. The standard also requires entities to disclose the fair value hierarchy, which categorizes assets based on the reliability of the inputs used to determine their fair value. By disclosing the fair value hierarchy, entities provide users of financial statements with information about the reliability of the fair value measurements. Overall, ASC 820 ensures that the valuation and disclosure of cryptocurrencies are done in a consistent and transparent manner, enhancing the usefulness of financial statements.
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• Dec 29, 2021 · 3 years ago
  BYDFi, as a leading cryptocurrency exchange, adheres to the key provisions of ASC 820 when it comes to the valuation and disclosure of cryptocurrencies. We understand the importance of transparency and consistency in the cryptocurrency market, and we strive to provide accurate and reliable valuations for our users. By following ASC 820, we ensure that our valuation techniques and inputs are based on observable market data, providing users with a clear understanding of the fair value of cryptocurrencies. Additionally, we disclose the valuation techniques and inputs used in determining the fair value, allowing users to assess the reliability of our valuations. At BYDFi, we are committed to maintaining the highest standards of financial reporting and transparency in the cryptocurrency industry.
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