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This question is restricted to the view of ISKCON only and no other non-advaitic school.

Do ISKCON accept Yoga Vasistha as an authentic scripture? If no, did they cite any valid reason for that?

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Srila Prabhupada rejects Yoga Vasistha.

In Chaitanya Charitamrita, the following incident occurs.

When Kamalākānta Viśvāsa heard about this punishment by Śrī Caitanya Mahāprabhu, he was very unhappy, but when Advaita Prabhu heard about it, He was greatly pleased. Seeing Kamalākānta Viśvāsa unhappy, Advaita Ācārya Prabhu told him, "You are greatly fortunate to have been punished by the Supreme Lord, the Personality of Godhead, Lord Caitanya Mahāprabhu. "Formerly Lord Caitanya Mahāprabhu always respected Me as His senior, but I did not like such respect. Therefore, My mind being afflicted by unhappiness, I made a plan. "Thus I expounded the Yoga-vāśiṣṭha, which considers liberation the ultimate goal of life. For this the Lord became angry at Me and treated Me with apparent disrespect. [Ādi 12.37-40]

In his commentary of verse 40, Srila Prabhupada says that Vaishnavas should stay away from it.

There is a book of the name Yoga-vāśiṣṭha that Māyāvādīs greatly favor because it is full of impersonal misunderstandings regarding the Supreme Personality of Godhead, with no touch of Vaiṣṇavism. Factually, all Vaiṣṇavas should avoid such a book, but Advaita Ācārya Prabhu, wanting punishment from the Lord, began to support the impersonal statements of the Yoga-vāśiṣṭha. Thus Lord Caitanya Mahāprabhu became extremely angry at Him and seemingly treated Him disrespectfully.

However, it is safe to say that Yoga Vasistha is still an authentic scripture.

For the jñānīs, the atheist Kapila, Vaśiṣṭha, Durvāsā, Dattātreya and other impersonalist philosophers are mahājanas. [Commentary of Madhya 17.185]

In conclusion, while Yoga Vasistha is not necessarily a spurious scripture, Prabhupada says that its teachings should not be accepted by Vaishnavas.

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