Cryptoasset Accounting Under IFRS and FRS 102: The 2026 Practitioner's Guide

IFRS Treatment of Cryptoassets: The Current Framework

The IASB's IFRS Interpretations Committee (IFRIC) addressed the accounting treatment of cryptocurrency holdings in a 2019 agenda decision. While not a full standard, this decision establishes the principles that preparers should apply:

IAS 2 Inventories: Applies where an entity holds cryptocurrency in the ordinary course of its business for sale. Entities whose primary business involves trading cryptocurrencies would typically apply IAS 2. Measurement is at cost or net realisable value, whichever is lower — unless the entity is a broker-trader, in which case IAS 2 permits measurement at fair value less costs to sell with changes recognised in profit or loss.

IAS 38 Intangible Assets: Applies where cryptocurrency is held as an investment asset (not for sale in ordinary course of business). IAS 38 requires measurement at cost less accumulated impairment losses, with the revaluation model (to fair value) available only where an active market exists. For major cryptocurrencies (Bitcoin, Ether) trading on recognised exchanges, the active market test is generally met, allowing the revaluation model. Under the revaluation model, increases go to OCI (revaluation reserve); decreases go to P&L.

IFRS 13 Fair Value Measurement: Where IAS 38 revaluation or IAS 2 fair value measurement is applied, IFRS 13 governs the fair value measurement methodology. For exchange-traded cryptocurrencies, the principal market price is typically the Level 1 fair value input.

FRS 102 Treatment for Irish and UK GAAP Reporters

FRS 102 (the Financial Reporting Standard applicable in the UK and Republic of Ireland) does not have specific guidance for cryptoassets. The FRC's discussion paper on digital assets (2022) explored the accounting treatment, with FRS 102 reporters generally applying principles analogous to IFRIC 2019 guidance.

Key considerations under FRS 102: Section 13 (inventories) or Section 18 (intangible assets) treatment depending on the nature of holding; Section 11/12 (financial instruments) treatment where the crypto instrument exhibits debt or equity characteristics; and the availability of the fair value model under FRS 102 Section 18 for assets with active markets.

Frequently Asked Questions

How should companies account for Bitcoin holdings under IFRS?

Bitcoin held as an investment asset is typically classified as an IAS 38 intangible asset. Where an active market exists (generally met for Bitcoin given exchange trading volumes), the revaluation model can be applied, allowing measurement at fair value with gains to OCI and losses to P&L. Cost model is the default if the revaluation model is not elected. IFRS 13 governs fair value measurement methodology.

What disclosures are required for cryptoasset holdings under IFRS?

IFRS disclosures for cryptoasset holdings should include: the accounting policy applied (IAS 2 or IAS 38, cost model or revaluation model); the carrying amount at the reporting date; for IAS 38 revaluation model — the revaluation surplus and movements; for IAS 2 fair value measurement — the fair value and methodology; IFRS 7 risk disclosures where cryptoasset price risk is material; and IFRS 13 fair value hierarchy disclosures.

Are there any upcoming IFRS changes for cryptoassets?

The IASB is currently working on a narrow-scope project addressing the accounting for cryptoassets, following concerns that IAS 38 cost model does not provide useful information for investment-held crypto. A draft standard is expected to introduce a mandatory fair value through P&L model for certain cryptoassets. Finance professionals should monitor IASB exposure drafts for developments expected in 2025-2026.