IFRS treats cryptocurrency through 2 existing standards — IAS 38 (Intangible Assets) and IAS 2 (Inventories) — rather than a crypto-specific pronouncement. The classification depends on the entity’s business model: IAS 38 applies to entities holding crypto as an investment or operational asset, while IAS 2 applies to broker-traders actively buying and selling digital assets. The International Accounting Standards Board (IASB) added a dedicated crypto accounting project to its research agenda in 2024, signaling potential convergence toward a purpose-built standard.
What IFRS Standards Apply to Cryptocurrency?
Two IFRS standards apply to cryptocurrency based on the entity’s business model and intended use of the digital asset. Within the accounting standards landscape, IAS 38 Intangible Assets covers the majority of crypto holdings — investments, treasury reserves, and operational assets. IAS 2 Inventories applies exclusively to broker-traders whose primary business involves buying and selling crypto.
| Standard | Applies When | Measurement | Gain/Loss Recognition |
|---|---|---|---|
| IAS 38 (Intangible Assets) | Holding as investment, reserve, or operational asset | Cost model or revaluation model (entity election) | Cost: impairment only. Revaluation: increases in OCI, decreases in P&L |
| IAS 2 (Inventories) | Broker-trader holding for sale in ordinary course of business | Fair value less costs to sell | All changes in profit or loss |
The classification decision is permanent for each category of crypto asset within an entity. Reclassification from IAS 38 to IAS 2 (or vice versa) requires a change in business model — not a change in market conditions or asset price.
How Does IAS 38 Classify Cryptocurrency as an Intangible Asset?
IAS 38 classifies cryptocurrency as an intangible asset when 3 criteria are met simultaneously: the asset lacks physical substance (met — crypto exists as a digital record), the asset is identifiable (met — recorded on a distributed ledger with a unique cryptographic identifier), and the asset is controlled by the entity (met — private key ownership or documented custodial arrangement provides control).
Under IAS 38, cryptocurrency has an indefinite useful life — there is no foreseeable limit to the period over which the asset generates economic benefits. This classification means no amortization applies, but impairment testing under IAS 36 is required at least annually or whenever indicators suggest the carrying amount exceeds recoverable amount.
Entities using IAS 38 elect one of 2 measurement models at the class-of-asset level:
Upside recognition: None — the asset remains at historical cost regardless of market price increases.
Impairment: Required under IAS 36 when indicators exist. Losses recognized in profit or loss. Reversal is not permitted for intangible assets with indefinite useful lives under IAS 38.
Result: The balance sheet carries crypto at historical cost (less any write-downs), creating a persistent gap between book value and market value when prices rise.
Upside recognition: Increases credited to revaluation surplus in Other Comprehensive Income (OCI). Previous decreases recognized in P&L are first reversed through P&L before crediting OCI.
Downside recognition: Decreases first offset against revaluation surplus for that asset. Remaining decreases recognized in profit or loss.
Requirement: An active market must exist to establish reliable fair value. Bitcoin and Ethereum qualify. Illiquid tokens may not.
Result: The balance sheet reflects current market value, but unrealized gains bypass net income — appearing in OCI rather than profit or loss.
The choice between cost model and revaluation model is an accounting policy election applied consistently to the entire class of intangible assets. An entity cannot apply the cost model to Bitcoin and the revaluation model to Ethereum — the election covers all crypto assets classified as intangible assets under IAS 38.
When Does IAS 2 Inventory Treatment Apply?
IAS 2 inventory treatment applies to entities that hold crypto assets for sale in the ordinary course of business — specifically broker-traders whose primary business activity involves buying and selling digital assets for profit. The classification requires evidence of a trading business model: frequent transactions, short holding periods, and revenue derived primarily from trading margins.
Under IAS 2, broker-trader entities measure crypto inventory at fair value less costs to sell, with all changes recognized in profit or loss. This treatment is functionally closer to FASB ASU 2023-08 than the IAS 38 treatment, because both recognize fair value changes directly in earnings.
The IAS 2 broker-trader exemption is narrow. Entities that occasionally sell crypto holdings (for example, to fund operations) are not broker-traders under IAS 2. The classification depends on whether trading crypto is the entity’s ordinary course of business — not whether the entity has ever sold crypto.
What Impairment Rules Apply Under IAS 36?
IAS 36 impairment rules apply to crypto assets carried at cost under IAS 38. Impairment testing is required at least annually for intangible assets with indefinite useful lives, and more frequently when indicators suggest the carrying amount exceeds the recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs of disposal and its value in use.
For crypto assets, fair value less costs of disposal is the primary recoverable amount measure — value in use (present value of future cash flows) is difficult to apply to assets that do not generate independent cash flows.
| Account | Debit | Credit |
|---|---|---|
| Impairment Loss on Digital Assets (P&L) | $80,000 | — |
| Digital Asset Holdings (ETH) | — | $80,000 |
How Does the IAS 38 Revaluation Model Work for Crypto?
The IAS 38 revaluation model carries crypto assets at fair value, revalued with sufficient regularity to ensure the carrying amount does not differ materially from fair value at the reporting date. For volatile crypto assets, quarterly or monthly revaluation is typical.
| Account | Debit | Credit |
|---|---|---|
| Digital Asset Holdings (ETH) | $80,000 | — |
| Revaluation Surplus — Digital Assets (OCI) | — | $80,000 |
| Account | Debit | Credit |
|---|---|---|
| Revaluation Surplus — Digital Assets (OCI) | $80,000 | — |
| Impairment Loss on Digital Assets (P&L) | $40,000 | — |
| Digital Asset Holdings (ETH) | — | $120,000 |
The revaluation decrease first exhausts the existing $80,000 revaluation surplus for that asset, then recognizes the remaining $40,000 (the amount below original cost) in profit or loss. This asymmetry — gains through OCI, losses through P&L — differs fundamentally from GAAP’s symmetric treatment where all fair value changes flow through net income.
What Is the Status of the IASB Cryptocurrency Project?
The International Accounting Standards Board added a cryptocurrency accounting project to its research agenda in 2024. The project evaluates whether existing standards adequately address the characteristics of crypto assets — including 24/7 trading, decentralized custody, programmable functionality, and hybrid token designs — or whether a dedicated IFRS standard is required.
The IASB research phase scope includes 4 questions:
- Whether crypto assets require a distinct asset classification separate from intangible assets
- Whether the IAS 38 revaluation model adequately addresses fair value for highly liquid crypto
- Whether broker-trader treatment under IAS 2 should extend to entities beyond active traders
- How to address stablecoins, governance tokens, and LP tokens that do not fit cleanly into IAS 38 or IAS 2
No exposure draft or timeline for a final standard has been announced as of March 2026. The IASB research phase typically takes 2-3 years before a discussion paper is published. The convergence trajectory suggests eventual alignment with FASB’s fair value approach, reducing the current measurement divergence between US GAAP and IFRS for digital assets.