How is crypto accounted for under IFRS?

No crypto standard, one agenda decision

Deloitte notes that, unlike US GAAP, IFRS Accounting Standards have no specialised guidance on crypto.⁵ The main guide is a June 2019 agenda decision of the IFRS Interpretations Committee. It looked at a group of crypto assets it called "cryptocurrency", with all three of these features:¹

• a digital or virtual currency recorded on a distributed ledger that uses cryptography for security;¹
• not issued by a jurisdictional authority or any other party; and¹
• not giving rise to a contract between the holder and another party.¹

The committee concluded that such a holding is not cash and not a financial asset. It is an intangible asset under IAS 38.¹

Which standard applies

The committee said IAS 2 Inventories applies when cryptocurrency is held for sale in the ordinary course of business. Otherwise, IAS 38 Intangible Assets applies.¹ KPMG says many crypto assets are accounted for in one of these two ways.⁴

Some tokens are different. KPMG says a stablecoin that gives the holder a right to redeem it for cash may be a financial asset under IFRS 9. If it isn't, it may fall under IAS 38 or IAS 2.^4,6

IAS 38: the cost model or the revaluation model

Intangible assets start at cost.² After that there are two models.

• Cost model. Cost, less amortisation and impairment. An intangible asset with an indefinite useful life is not amortised, but is tested for impairment every year.² KPMG says no amortisation is typically expected for crypto; it is tested for impairment instead.⁴
• Revaluation model. Fair value, but only when it can be found from an active market.² IFRS 13 calls a market active when trades happen often enough, and in enough volume, to give pricing information on an ongoing basis. KPMG says deciding this for a crypto asset takes judgement.⁴

Under the revaluation model, IAS 38 puts a rise in other comprehensive income (OCI), except where it reverses an earlier fall charged to profit or loss. A fall goes to profit or loss, except where it reverses an earlier rise held in OCI.³ KPMG's summary shows the result for crypto: rises above cost go to OCI, falls below cost go to profit or loss.⁴ OCI holds income and expense that IFRS Standards keep out of profit or loss.⁷ IFRS 18 replaces IAS 1 for years beginning on or after 1 January 2027.⁸

Whatever the model, when a company sells an intangible asset, the gain or loss on disposal goes into profit or loss.²

Impairment under IAS 36

IAS 36 says an asset must not be carried at more than it can recover. If its carrying amount is more than its recoverable amount, it is impaired. The company writes it down and records an impairment loss in profit or loss.⁹

The recoverable amount is the higher of two figures: fair value less costs to sell, and value in use.⁹ For intangible assets with indefinite lives, the recoverable amount must be assessed every year.⁹

Unlike the old US model, IFRS lets an impairment be reversed, except for goodwill. When the circumstances behind the loss are favourably resolved, the loss is reversed, but only up to what the carrying amount would have been with no impairment.^9,10 For crypto that is not amortised, that limit is its cost.^9,4

IAS 2: crypto held for sale

Inventory is measured at the lower of cost and net realisable value.¹¹ Net realisable value is the expected selling price in the ordinary course of business, less the expected costs to complete and sell.¹¹

The committee noted one exception. A company acting as a broker-trader of cryptocurrencies looks at IAS 2's rule for commodity broker-traders, who measure inventory at fair value less costs to sell.¹ KPMG's summary shows those fair value changes going to profit or loss.⁴ KPMG says well-known crypto assets such as Bitcoin, Ether and XRP would be commodities, but less common ones may not be.⁴

What to disclose

The committee pointed to these disclosures:¹²

• the disclosures in IAS 2 or IAS 38, whichever applies;¹²
• the fair value disclosures in IFRS 13, if the crypto is measured at fair value;¹²
• the judgements management made that had the most significant effect on the amounts;¹² and
• big price moves after the reporting date, if leaving them out could change readers' decisions.¹

US GAAP and IFRS side by side

What may change

A May 2026 paper by IASB staff said some stakeholders find IAS 38 unsuitable for these assets and think fair value may be better.¹⁴ It said crypto assets are on a list of possible projects the IASB could add, if it has capacity.¹⁴ Staff papers do not represent the IASB's views.¹⁴