How IFRS Currently Classifies Crypto Assets
In June 2019, the IFRS Interpretations Committee (IFRIC) issued an agenda decision on holdings of cryptocurrencies, concluding that most cryptocurrencies meet the definition of an intangible asset under IAS 38 — specifically, they are identifiable non-monetary assets without physical substance. The IFRIC also noted that an entity that holds cryptocurrency as inventory in the ordinary course of its business (such as a crypto exchange or broker-dealer) should apply IAS 2.
Under IAS 38, crypto assets are initially recognised at cost (the transaction price). Subsequent measurement depends on the accounting policy elected: the cost model (cost less accumulated impairment — the default) or the revaluation model (fair value at each reporting date, but only when an active market exists for the asset). Most entities use the cost model.
Under IAS 2 (for exchange businesses holding crypto as inventory), crypto is measured at the lower of cost and net realisable value — unless the entity is a commodity broker-trader, in which case IAS 2.3(b) allows measurement at fair value less costs to sell with changes in profit or loss. Most crypto exchange businesses qualify as commodity broker-traders, allowing them to use fair value measurement for their inventory positions.
Key IFRIC Clarification (2019): The IFRIC confirmed that cryptocurrency is NOT cash (it does not meet the IAS 7 definition of cash), NOT a financial instrument (no contractual right to receive cash), and NOT necessarily inventory (only if held for sale in the ordinary course of business). For most holders, IAS 38 intangible asset accounting is the correct framework.
IAS 38: Cost Model vs Revaluation Model
| Aspect | Cost Model | Revaluation Model |
|---|---|---|
| Measurement basis | Cost less accumulated impairment losses | Fair value at revaluation date less subsequent impairment |
| Active market requirement | Not required | Required — must exist at each revaluation date |
| Price increases | Not recognised | Recognised in OCI (revaluation surplus) |
| Impairment losses | Recognised in P&L | First offset against revaluation surplus; excess in P&L |
| Impairment reversals | Not permitted | Recognised in P&L (reversing prior P&L charge) or OCI |
| Which assets qualify | All IAS 38 intangibles | Only intangibles with active market |
| Bitcoin/Ethereum | Available | Available (active market confirmed) |
| Most altcoins | Available | Not available (no active market) |
IFRS Treatment by Crypto Asset Type
| Asset Type | IFRS Classification | Measurement | Notes |
|---|---|---|---|
| Bitcoin (BTC) | IAS 38 intangible | Cost model or revaluation (active market) | Active market confirmed by IASB |
| Ethereum (ETH) | IAS 38 intangible | Cost model or revaluation (active market) | Active market — revaluation available |
| Major altcoins | IAS 38 intangible | Cost model (typically) | Active market assessment required |
| Fiat stablecoins (USDC) | IAS 32/IFRS 9 financial asset | Amortised cost or FVTPL | Represents contractual right to cash |
| Crypto held for sale (exchange) | IAS 2 inventory | Lower of cost and NRV (or FV less costs to sell) | Commodity broker-trader exception |
| NFTs | IAS 38 or IAS 2 | Cost or NRV depending on purpose | Not fungible — individual assessment |
| DeFi LP tokens | IAS 38 (typically) | Cost model | Complex — may represent multiple assets |
IASB Digital Assets Project Timeline
The IASB has a research project on cryptocurrency and related transactions on its work programme. Progress has been cautious — the IASB issued educational materials in 2023 describing the current accounting treatment but has not yet published an exposure draft for a new standard or significant amendments to existing standards.
Key milestones: In 2019, IFRIC issued the agenda decision on cryptocurrency holdings. In 2020–2022, the IASB received feedback from constituents requesting clearer guidance, particularly as DeFi, NFTs, and institutional adoption accelerated. In 2023, the IASB published educational materials on crypto asset accounting but confirmed no short-term standard-setting project.
The IASB's approach is deliberate — they want to ensure any standard is robust, covers a broad enough scope (not just BTC and ETH), and considers the interplay with financial instruments, insurance, and revenue recognition standards. Many in the profession expect the IASB to issue an exposure draft by 2026–2027, with a final standard potentially in 2028–2030.