As more companies hold crypto-assets on their balance sheets — whether as treasury investments, collateral, or through business activities — the accounting question has become urgent. The IASB has not yet issued a dedicated standard for digital assets, but it has provided agenda decisions and narrow-scope amendments that clarify how existing IFRS Standards apply. Here is the current state of the guidance.
The IASB's Agenda Decision: Crypto-Assets as Intangible Assets
The IFRS Interpretations Committee (IFRIC) confirmed in June 2019 that holdings of cryptocurrency should generally be accounted for under IAS 38 Intangible Assets — unless the entity holds them for sale in the ordinary course of business, in which case IAS 2 Inventories applies.
This conclusion was significant because IAS 38 typically uses a cost model as the default, with the revaluation model available only where an active market exists. For major cryptocurrencies like Bitcoin and Ethereum, an active market does exist — meaning entities can choose to apply the IAS 38 revaluation model, recognising movements in fair value through other comprehensive income (with losses recycled to profit or loss when the asset is derecognised).
IAS 2 for Commodity Broker-Traders
Entities that hold crypto-assets for sale in the ordinary course of business — such as exchanges, market makers, or entities that regularly sell crypto-assets to customers — should account for them under IAS 2 Inventories. Commodity broker-traders under IAS 2 paragraph 3(b) can measure inventories at fair value less costs to sell, with changes recognised in profit or loss. This is the treatment that most closely reflects the economic substance of actively traded crypto positions.
"The absence of a dedicated IFRS standard for digital assets does not mean the accounting is unconstrained — it means existing standards apply, often in ways that require careful judgement."
Fair Value Measurement Under IFRS 13
Where fair value is relevant — under the IAS 38 revaluation model or IAS 2 broker-trader measurement — IFRS 13 Fair Value Measurement applies. Key considerations include:
- Principal market — fair value should reflect the price in the principal market for the asset, which for major cryptocurrencies is typically a specific exchange. Entities must determine which exchange constitutes their principal market.
- Level of fair value hierarchy — major cryptocurrencies with continuous exchange pricing are generally Level 1 (quoted prices in active markets). Less liquid tokens may be Level 2 or Level 3.
- Unit of account — whether to measure each token individually or in aggregate can affect fair value in illiquid markets.
Stablecoins and Other Digital Asset Types
Not all digital assets are cryptocurrencies. The accounting analysis differs depending on the asset's characteristics:
- Stablecoins backed by fiat currency — may meet the definition of a financial asset (cash equivalent or receivable) under IAS 32/IFRS 9 depending on the redemption terms
- Security tokens — tokens that represent an ownership interest or debt claim are financial instruments and fall under IFRS 9
- NFTs — unique tokens with no active market are typically IAS 38 intangibles at cost; determining whether an active market exists requires judgement
- Tokenised real-world assets — the accounting follows the underlying asset (e.g., tokenised real estate follows IAS 40 or IFRS 16 depending on structure)
Disclosure Requirements
Whatever accounting policy is adopted, robust disclosure is expected. Auditors and investors will look for:
- Accounting policy for each type of digital asset held, with the basis for the policy choice
- Carrying amount and measurement basis at the reporting date
- Fair value hierarchy level and valuation methodology where fair value is used
- Movements during the period — acquisitions, disposals, revaluation gains and losses
- Impairment assessment where cost model is applied
- Risk disclosures — custody arrangements, concentration risk, regulatory risk
The IASB has digital assets on its active agenda, and a dedicated standard is in development. Until it is finalised, the current guidance is the operative framework — and it requires more careful analysis than many entities initially assume.