The IFRS In­ter­pre­ta­tions Com­mit­tee (IFRIC) noted that paragraph 8 of IAS 38, Intangible Assets, defines an intangible asset as ‘an identifiable non-monetary asset without physical substance’. The Committee also observed that a holding of cryptocurrency meets the definition of an intangible asset in IAS 38 on the grounds that (a) it is capable of being separated from the holder and sold or transferred individually; and (b) it does not give the holder a right to receive a fixed or determinable number of units of currency.

The Committee concluded that IAS 2, Inventories, applies to cryptocurrencies when they are held for sale in the ordinary course of business. If IAS 2 is not applicable, then an entity applies IAS 38 to holdings of cryptocurrencies. In reaching these conclusions, the Committee noted that a holding of cryptocurrency is not a financial asset. This is because a cryptocurrency is not cash, nor is it an equity instrument of another entity. It does not give rise to a contractual right for the holder and it is not a contract that will or may be settled in the holder’s own equity instruments.

With respect to disclosure, an entity applies the disclosure requirements in the IFRS Standard applicable to its holdings of cryptocurrencies. Accordingly, an entity applies the disclosure requirements in (a) paragraphs 36–39 of IAS 2 to cryptocurrencies held for sale in the ordinary course of business, and (b) paragraphs 118-128 of IAS 38 to holdings of cryptocurrencies to which it applies IAS 38. If an entity measures holdings of cryptocurrencies at fair value, paragraphs 91–99 of IFRS 13, Fair Value Measurement, specify applicable disclosure requirements.

For further details of the discussion, refer to the IFRIC Update on the IASB’s website.