Uses of cryptoassets have continued to evolve since their initial uses for payment or financing. As their uses grow more varied and complex, stakeholders such as shareholders and lenders may require more information about these assets and the associated transactions. Consequently, preparers of financial statements will need to ensure that the related accounting and disclosures are appropriate and adequate.
At present, cryptoassets are not explicitly within the scope of any IFRS Standard. The characteristics of the cryptoassets, primarily the rights and obligations attached to them, are critical in determining their appropriate accounting treatment. ISCA’s guidance on cryptoassets will fill the gap until standard setters issue interpretation, guidance or standard.
In November 2019, ISCA issued ED FRG 2 “Accounting for Cryptoassets: From a Holder’s Perspective”. This ED FRG provides an understanding of the nature of the various cryptoassets – cryptocurrencies, utility tokens, asset tokens and security tokens; and provides guidance on their accounting together with illustrative examples. Other areas in ED FRG 2 include classification, measurement and disclosure considerations.
Guidance on accounting for cryptoassets from the issuer’s perspective will be the subject of a separate FRG to be issued at a later date.