Pockets of Belfast

When Accounting Rules Quietly Rewrite Reality

As Financial Advisors for retail clients, over the years we become familiar with accounting rules and standards incidental to proper planning. Most people assume accounting rules are boring technicalities. But in truth, they shape financial reality — controlling what is visible, valuable, and lawful.

Consider two powerful examples:

First, in 2018, during the Kavanaugh hearings, the Executive Branch quietly adopted FASAB Statement 56, allowing federal agencies to omit, alter, or conceal financial information from public reports if labeled “national security.” No Congressional vote. No Senate confirmation. No legislative oversight. Through an “independent advisory board” — technically sponsored by Treasury, OMB, and GAO — the Executive Branch seized enormous financial discretion with virtually no public awareness.

Second, in the private sector, FASB (Financial Accounting Standards Board) historically mandated that Bitcoin be treated as an “intangible asset,” forcing impairment losses but forbidding gains unless sold. This practically eliminated corporations from holding Bitcoin, distorting its perceived value on balance sheets. Only recently (2023-2024) did FASB correct this, approving fair value accounting, unleashing a wave of corporate Bitcoin adoption and financial statement transparency.

Since the recent FASB rule change on Bitcoin,
→ Strategy (MSTR) purchased $52B in Bitcoin. and…

→ MSTR stock price rose around 318% in 2024.
FASB was limiting the independence of corporate treasuries and governance boards.

The deeper truth: Accounting standards are not neutral. They are instruments of power. They determine what can legally be seen, owned, trusted, and audited. In both the government and the private sector, accounting boards — sometimes independent, but often under executive influence — can shift vast financial and political realities without public debate.

We must be vigilant.
→ FASAB 56 still empowers agencies to legally hide trillions. That’s trillions of dollars of government spending not disclosed to the public, nor to Congress.
→ FASB’s prior Bitcoin treatment slowed honest asset adoption for years.
Financial professionals, policymakers, and citizens alike must recognize: the language of accounting is the language of law — and ultimately, of liberty.

No particular call-to-action for Financial Advisors. This is just an interesting piece regarding a topic I found interesting and troubling, to say the least.

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