ACCOUNTING FOR DIGITAL ASSETS (CRYPTOCURRENCY): CHALLENGES AND PROSPECTS UNDER IFRS

The rapid proliferation of cryptocurrencies and digital assets has presented unprecedented challenges for financial reporting frameworks worldwide. With the global cryptocurrency market capitalization exceeding one trillion US dollars and major corporations such as Tesla and MicroStrategy allocating substantial portions of their treasuries to digital assets, the need for coherent accounting guidance has become paramount (van Hes, 2025). However, the International Financial Reporting Standards (IFRS) currently lack a dedicated standard for digital assets, forcing preparers to analogize from existing frameworks—primarily IAS 38 Intangible Assets and IAS 2 Inventories—following the 2019 agenda decision of the IFRS Interpretations Committee (IFRIC). This research work comprehensively examines the accounting treatment of cryptocurrencies under IFRS, identifying significant challenges including classification ambiguity, measurement volatility, impairment asymmetry, and disclosure inadequacy. Through a systematic analysis of current standards, academic literature from 2020 to 2026, and comparative assessment with recent US GAAP developments (ASU 2023-08), this work evaluates the prospects for regulatory evolution. The findings reveal that the existing framework fails to satisfy the qualitative characteristics of relevant and faithfully representative financial information, creating a persistent gap between book values and economic substance. This research contributes to ongoing policy debates by recommending a phased pathway toward a dedicated digital assets standard while providing immediate practical guidance for preparers navigating the current landscape.
Keywords: Cryptocurrency accounting, IFRS, digital assets, IAS 38, fair value measurement, blockchain financial reporting