When crypto is inventory: IAS 2 and the broker-trader exception
Under IFRS, tokens held for sale in the ordinary course of business are inventory. Broker-traders can carry them at fair value less costs to sell.
If your business buys and sells tokens as part of what it does, rather than holding them as an investment, IFRS may treat them as inventory. That route is the only way under current IFRS to put crypto price changes through profit or loss in both directions, but it depends on facts about your business model that you need to document.
The 2019 agenda decision
The IFRS Interpretations Committee concluded in June 2019 that IAS 2 Inventories applies to cryptocurrencies held for sale in the ordinary course of business, and IAS 38 applies otherwise [1]. It added that an entity acting as a broker-trader of cryptocurrencies should consider the IAS 2 provision that lets commodity broker-traders measure inventory at fair value less costs to sell [1].
IAS 2 itself defines inventories as assets held for sale in the ordinary course of business, in production for such sale, or consumed in production or services [2]. It applies to intangible inventories too, which is why tokens can qualify [1].
Two kinds of crypto inventory
Getting into IAS 2 is the first question. Which measurement applies inside IAS 2 is the second, and the answer splits.
- Broker-trader inventory: fair value less costs to sell. Broker-traders buy or sell commodities for others or on their own account, and the inventory concerned is acquired mainly to sell in the near future and profit from price movements or a trading margin [1][2]. Changes in fair value less costs to sell go to profit or loss in the period [2][4]. These holdings are excluded only from IAS 2's measurement requirements, not from the standard as a whole [2].
- Other inventory: lower of cost and net realisable value. Everything else in IAS 2 is measured at the lower of cost and net realisable value, meaning estimated selling price less the costs to make the sale [2]. Cost is assigned using first-in first-out or weighted average; last-in first-out is not permitted [2]. Write-downs go to profit or loss and can later be reversed [2].
Committee staff drew the line by holding period. An entity speculating on short-term price moves may qualify as a broker-trader; one holding tokens for long-term speculation, even if it intends to sell them eventually, would not, and would use lower of cost and net realisable value [3]. That staff analysis supports the agenda decision but is not itself authoritative.
| Facts | Standard | Measurement | Gains above cost |
|---|---|---|---|
| Held for sale in ordinary course, short-term trading for price or margin | IAS 2 (broker-trader) | Fair value less costs to sell | Profit or loss |
| Held for sale in ordinary course, longer-term | IAS 2 | Lower of cost and NRV | Not recognised |
| Not held for sale in ordinary course, active market | IAS 38 | Cost or revaluation | Not recognised, or OCI |
| Not held for sale in ordinary course, no active market | IAS 38 | Cost | Not recognised |
| Account | Debit | Credit |
|---|---|---|
| Purchase | ||
| Inventory — ETH | 300,000.00 | |
| Cash | 300,000.00 | |
| Broker-trader at period end, price 3,400, costs to sell 0.2% Fair value 340,000 - costs to sell 680 = 339,320; change 339,320 - 300,000 = 39,320 | ||
| Inventory — ETH | 39,320.00 | |
| Fair value gain on inventory (P&L) | 39,320.00 | |
| Non-broker-trader instead, price falls to 2,500, costs to sell 0.2% NRV 250,000 - 500 = 249,500; write-down 300,000 - 249,500 = 50,500 | ||
| Inventory write-down (P&L) | 50,500.00 | |
| Inventory — ETH | 50,500.00 | |
Judgments that need evidence
- Ordinary course of business. Staff noted that speculating on a token implies holding it for sale [3], but most treasuries hold tokens for operations, reserves or long-term investment. Your board minutes, trading mandates and turnover data should tell a consistent story.
- Near-future sale. Broker-trader status rests on intent to sell soon and profit from price or margin [2]. Average holding periods, inventory turnover and trading limits are the natural evidence.
- Costs to sell. Define which costs count, such as exchange trading fees and network fees on the way out, and apply them consistently at each reporting date.
- Splitting a portfolio. An entity can run a trading book under IAS 2 and hold a long-term reserve under IAS 38. Keep the books separate in wallets or sub-accounts so transfers between them are visible and explainable.
Disclosure and the US contrast
IAS 2 holders give the disclosures in paragraphs 36 to 39 of IAS 2, plus IFRS 13 fair value disclosures where they measure at fair value, plus significant judgments under IAS 1 [1]. IAS 2 specifically asks for the carrying amount of inventory carried at fair value less costs to sell [2].
Under US GAAP the question looks different. In-scope crypto is measured at fair value through net income under ASU 2023-08 regardless of business model, and broker-dealers and investment companies already measured crypto at fair value under their industry guidance [5]. A group reporting under both frameworks may therefore find its IFRS trading book and its US GAAP numbers broadly aligned, while its IFRS long-term holdings diverge.
As of October 2026 the IASB has not changed these requirements. When the IASB discussed cryptocurrencies with the FASB in 2022, it noted that IFRS already permits or requires fair value in some cases, including the broker-trader route, and decided not to start a standalone project at that time [4]. Cryptoassets have since been placed on its research pipeline [6].
What to do
- Write a short memo on whether any holdings are held for sale in the ordinary course of business, with evidence.
- If you claim broker-trader treatment, document the near-term trading intent and monitor holding periods against it.
- Segregate trading inventory from long-term holdings in wallets and ledger accounts.
- Define costs to sell and the pricing source and timestamp used at each reporting date.
- Check that inventory disclosures, including the amount carried at fair value less costs to sell, are in the notes.
Sources
- Holdings of Cryptocurrencies—June 2019 (agenda decision) (IFRS Foundation / IFRS Interpretations Committee)
- AASB 102 Inventories (Australian Accounting Standards Board)
- Holdings of Cryptocurrencies: Agenda decision to finalise (IFRS Interpretations Committee staff paper, Agenda ref 12, June 2019) (IFRS Foundation)
- IASB consideration of cryptocurrencies and related transactions (FASB-IASB joint education meeting, Agenda ref 12B, September 2022) (IFRS Foundation)
- FASB issues ASU: Accounting for and disclosure of certain crypto assets (Defining Issues, December 13, 2023) (KPMG)
- IASB pipeline projects (IFRS Foundation)
General information for finance teams, current as of publication. Not legal, tax or accounting advice.