Accounting frameworks for crypto assets: IFRS and US GAAP compared

IFRS Accounting Standards are required in more than 140 jurisdictions, yet they contain no standard written for crypto, so holders must fit tokens into rules designed for patents, software and inventory. US GAAP, the other major framework, has had a dedicated fair value standard since 2025. The same bitcoin can therefore produce very different profit figures depending on where a company reports, and anyone who prepares, audits, analyzes or lends against financial statements needs to understand why.

Why crypto does not fit the usual categories

The starting point under IFRS is an agenda decision of the IFRS Interpretations Committee (IFRIC), Holdings of Cryptocurrencies, published in June 2019. The Committee looked at a cryptocurrency with three features: it is recorded on a distributed ledger secured by cryptography, it is not issued by a jurisdictional authority or other party, and holding it creates no contract between the holder and anyone else.

It then tested each candidate standard:

• Not cash. Cash is a medium of exchange used as the monetary unit for pricing goods and services in financial statements. Cryptocurrencies were not used that way widely enough.
• Not a financial asset. Under IAS 32, a financial asset requires a contractual right to receive cash or another financial asset. A bitcoin gives no claim on anyone.
• Inventory under IAS 2 if the entity holds it for sale in the ordinary course of business.
• Otherwise an intangible asset under IAS 38, because it is an identifiable non-monetary asset without physical substance.

The Committee also pointed to disclosure duties: IFRS 13 for fair value, IAS 1 for significant judgments, and IAS 10 for material changes in value after the reporting date. An agenda decision is not a new standard; it explains how existing standards apply, and auditors and securities regulators expect entities to follow it. The analysis covers tokens with no issuer and no contract. Tokens that do carry a contractual right, such as many stablecoins, are covered in the lesson Accounting for stablecoins, staking and crypto lending.

IAS 38: cost model or revaluation model

Most corporate holders end up in IAS 38. A crypto asset is normally assessed as having an indefinite useful life, so it is not amortized but is tested for impairment under IAS 36 at least annually and whenever there is an indicator. IAS 38 then offers two models.

Cost model. The asset is carried at cost less impairment. IAS 36 allows impairment reversals when the recoverable amount recovers, but never above the original cost.

Revaluation model. The asset is carried at fair value, but only if there is an active market: one where transactions take place with enough frequency and volume to provide pricing information on an ongoing basis (IFRS 13). Bitcoin and ether pass easily; thinly traded tokens may not. The model must be applied to the whole class of similar assets, and it is asymmetric:

• Increases above cost go to other comprehensive income (OCI), building a revaluation surplus in equity.
• Decreases first reduce any surplus for that asset; the rest is a loss in profit or loss.
• On sale, the surplus is transferred directly to retained earnings. It is never recycled through profit or loss.

A worked example shows the effect, with US GAAP added for comparison. A company buys 10 BTC at $50,000 each ($500,000). The price is $70,000 at the end of year 1, $40,000 at the end of year 2 and $60,000 at the end of year 3 (costs of disposal ignored).

Over three years the cost model shows no net profit and hides $100,000 of value; the revaluation model shows the value but keeps the gain out of profit or loss; only fair value through net income reports it as performance.

IAS 2: inventory and the broker-trader exception

An entity that holds crypto for sale in the ordinary course of business, such as a dealer or a platform trading on its own account, applies IAS 2. The default measure is the lower of cost and net realizable value, so gains appear only on sale.

IAS 2 paragraph 3(b) provides an exception for commodity broker-traders: inventories acquired principally to sell in the near future and generate a profit from price fluctuations or a broker-trader's margin may be measured at fair value less costs to sell, with changes in profit or loss. This is the main route under IFRS to full fair value through profit or loss for a crypto holding. It depends on the business model, not on preference: a corporate treasury that buys bitcoin as a long-term reserve is not a broker-trader, while a market maker turning over its book daily may be. Investment entities and funds that measure investments at fair value under their own frameworks are a separate case.

US GAAP: fair value through net income

Before 2025, US GAAP also treated most crypto as an indefinite-lived intangible asset, but with a harsher rule than IAS 36: impairments could never be reversed while the asset was held. The FASB replaced that model with ASU 2023-08, which created ASC 350-60. It is effective for fiscal years beginning after December 15, 2024, so calendar-year companies applied it from January 1, 2025, with a cumulative-effect adjustment to opening retained earnings and no restatement of prior years.

A crypto asset is in scope only if it meets all six criteria: it is an intangible asset; it gives no enforceable right to underlying goods, services or other assets; it resides on a distributed ledger; it is secured through cryptography; it is fungible; and it was not issued by the reporting entity or its related parties. Bitcoin, ether and most governance tokens held by investors qualify. Redeemable stablecoins, wrapped tokens, most NFTs and an issuer's own tokens do not.

In-scope assets are measured at fair value under ASC 820, in the entity's principal market, with changes in net income. They are presented separately from other intangibles, and disclosures include each significant holding (cost basis, fair value, units), contractual sale restrictions, an annual rollforward with realized gains shown separately, and the cost-basis method used.

The two frameworks side by side

The practical consequences are large. A group reporting under IFRS with a US subsidiary must convert the subsidiary's fair value figures to the group's IAS 38 policy, and analysts comparing two companies with identical holdings must adjust for the framework before comparing earnings. Lenders whose covenants depend on profit or equity should check which model a borrower uses, because a revaluation surplus lifts equity without lifting profit.

Where the IASB stands

The IASB has repeatedly declined to start a dedicated crypto project. It keeps cryptoassets on its list of possible future topics, and its broader Intangible Assets research project, a review of IAS 38, is considering whether assets held for investment might suit a fair value model. Until the IASB acts, IFRS reporters keep applying the 2019 agenda decision, and the gap with US GAAP remains. Anyone relying on this point should check the IASB's current work plan.

Exam focus: the reasoning of the June 2019 IFRIC agenda decision (not cash, not a financial asset, IAS 2 if held for sale in the ordinary course of business, otherwise IAS 38); the IAS 38 cost model with impairment reversals capped at cost; the revaluation model's active-market requirement, OCI treatment and no recycling; the IAS 2.3(b) broker-trader exception and why it depends on the business model; US GAAP fair value through net income under ASC 350-60 (ASU 2023-08) and its six scope criteria; the main differences between the two frameworks and their effect on comparability; why IFRS reporters still rely on the 2019 agenda decision.