SFFAS 3 Seized and Forfeited Digital Assets
For questions about this project, email omnibusamend@fasab.gov.
| Request for Comment | Due Date | Word Version of questions for Respondents | Comment Letters | Final Pronouncements |
|---|---|---|---|---|
| Seized and Forfeited Digital Assets (PDF) | April 18, 2024 | Questions for Respondents (Word) | Comment Letters | Seized and Forfeited Digital Assets (PDF) |
Project Objective:
The objective of this project is to issue a Technical Bulletin that would clarify existing standards for seized and forfeited digital assets. SFFAS 3, Accounting for Inventory and Related Property, provides guidance for seized and forfeited property. However, guidance is needed to clarify the existing reporting requirements to the unique characteristics of digital assets that the Board did not consider when developing SFFAS 3.
History of Board Deliberations
June 21, 2024
On June 21, 2024, FASAB staff issued TB 2024-1, Seized and Forfeited Digital Assets. The TB clarifies existing guidance in SFFAS 3, Accounting for Inventory and Related Property, for seized and forfeited digital assets.
Specifically, the TB clarifies that SFFAS 3 requirements in paragraphs 57-78 apply to seized and forfeited digital assets. The TB further clarifies that reporting entities should treat central bank digital currencies as monetary instruments and all other digital assets as nonmonetary property when applying the requirements of SFFAS 3. The TB also provides clarifying guidance for measuring market value and applying SFFAS 3 disclosure requirements for seized and forfeited digital assets.
June 11-12, 2024
At the June 2024 meeting, the Board considered public comments on the exposure draft of proposed TB titled Seized and Forfeited Digital Assets. The respondents generally agreed with the proposed guidance.
In response to the comment letters, the Board agreed to further edits to improve the structure and clarity of the guidance and added language in the basis for conclusions addressing key issues raised by respondents. At the conclusion of the meeting, no member objected to issuing the TB as a final pronouncement.
Briefing Materials – Topic C
March 4, 2024
On March 4, 2024, FASAB staff released an exposure draft of a proposed Technical Bulletin (TB) titled Seized and Forfeited Digital Assets. The proposed TB would clarify that requirements in paragraphs 57-78 of SFFAS 3, Accounting for Inventory and Related Property, apply to seized and forfeited digital assets. The TB would further clarify that, with the exception of central bank digital currencies, reporting entities should treat digital assets as nonmonetary property when applying the requirements of SFFAS 3. The TB would also provide clarifying guidance for measuring market value and applying SFFAS 3 disclosure requirements for seized and forfeited digital assets.
The Board requests comments on the ED by April 18, 2024. Respondents are encouraged to provide the reasons for their positions. The ED (in PDF format) and the specific questions raised (in Word format) are available on the FASAB website.
February 21-22, 2024
At the February 2024 meeting, staff proposed an exposure draft of Technical Bulletin 202X-X, Seized and Forfeited Digital Assets, to the Board with the following recommendations:
- Additional non-substantive edits to improve the grammar, format, and style of the TB
- Five questions for respondents for the exposure draft
- A 45-day public comment period for the exposure draft
The Board agreed to all of staff’s recommendations and implemented a few additional non-substantive grammatical and formatting edits.
Next, staff will request Board approval to expose the Technical Bulletin for public comment. Staff plans to present an analysis of public comments for Board deliberation during the June 2024 meeting.
Briefing Materials – Topic C
December 12-13, 2023
At the December 2023 meeting, staff proposed updates to the authoritative guidance and basis for conclusions sections of the proposed Technical Bulletin (TB) based on previous Board deliberations.
The Board made several revisions to streamline and further clarify the authoritative guidance in the TB but did not substantially change the guidance that staff had originally proposed during the October 2023 meeting. The Board also updated the basis for conclusions to further describe the characteristics of digital assets and explain why the TB proposal categorizes central bank digital currencies as monetary instruments and all other digital assets as nonmonetary property for purposes of applying the guidance in SFFAS 3.
Staff will update the draft TB proposal per member feedback and plans to propose a pre-ballot exposure draft for the Board to consider during the February 2024 meeting.
Briefing Materials – Topic D
October 17-18, 2023
At the October 2023 meeting, staff proposed a draft Technical Bulletin that would clarify and elaborate upon seized and forfeited property guidance in SFFAS 3, Accounting for Inventory and Related Property, to address digital assets, a new and unique resource not previously considered by the Board.
Specifically, the Technical Bulletin would clarify that reporting entities should treat central bank digital currencies as monetary property and all other digital assets (for example, cryptocurrencies, stablecoins, non-fungible tokens, etc.) as nonmonetary property when applying the SFFAS 3 reporting requirements. The Technical Bulletin also provides clarifying guidance for measuring market value and applying SFFAS 3 disclosure requirements for seized and forfeited digital assets.
The Board unanimously supported moving forward with the Technical Bulletin. All members generally agreed that the guidance would help reporting entities apply the existing SFFAS 3 reporting requirements to an increasingly material amount of seized and forfeited digital assets. Some members suggested non-substantive edits to the Technical Bulletin and requested that staff address certain points of clarification in the basis for conclusions.
Staff will implement the suggested edits, update the basis for conclusions, and propose the updated Technical Bulletin for the Board’s consideration at the December 2023 meeting.
Briefing Materials – Topic C
SFFAS 3 Seized and Forfeited Digital Assets