Digital currency – A case for standard setting activity

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May 31, 2018

In May 2018, the the International Accounting Standards Board (the Board) posted a publication by the Australian Accounting Standards Board on the accounting for digital currencies.

In the publication, they state that in their opinion there is a lack of clear guidance in IFRSs and, as a consequence, digital currencies could be accounted for under IAS 2 Inventory or IAS 38 Intangible Assets depending on certain facts and circumstances. They do not think that the measurement guidance in IAS 2 and IAS 38 provides relevant information to users of financial statements in the context of digital currencies. They think that digital currencies should be measured at fair value with changes in fair value recognised in profit or loss. Furthermore, they think that the accounting for digital currencies highlights a broader issue with IFRSs in that there is no accounting standard that deals with investments in intangible assets or other commodity type assets that are not financial instruments or inventory. Consequently, they recommend that the International Accounting Standards Board (IASB) develop a standard that would address the accounting for investments in intangible assets and commodities.

Review the publication on the IASB's website.

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