Crypto & IFRS 13: Fair Value Measurement and the Hierarchy

Once a crypto holding is being measured at fair value, IFRS 13 takes over the question of how that fair value is determined and disclosed. It does not decide whether to fair-value crypto in the first place; classification does that, usually through the IAS 38 revaluation model. This article assumes fair value already applies and focuses on the measurement framework: where actively-traded crypto sits in the hierarchy, why the principal-market and exit-price questions are harder than they look, and what has to be disclosed. The decision of whether to fair-value at all sits in the IFRS intangible-asset hub.

The measurement framework in brief

• IFRS 13 governs how fair value is measured, not whether. It applies when fair value is required or elected for crypto, typically through the IAS 38 revaluation model.
• Level 1 is unadjusted quoted prices in active markets for identical assets, preferable where available. Major actively-traded crypto can be Level 1, but the level is assessed per asset and per market rather than assumed.
• Identifying the principal market (or the most advantageous market) is genuinely complex for crypto, with many venues, differing prices, and near-continuous trading, so it needs a documented methodology.
• Disclosure covers the fair value at the reporting date, the hierarchy level, the valuation technique, and the significant inputs for Level 2 and Level 3.
• IFRS 13 is not identical to the US-GAAP basis: ASU 2023-08 takes fair value to net income, whereas IFRS pairs the IAS 38 revaluation model with IFRS 13 measurement.
• The level, market, and inputs are a fact-specific auditor judgement. None of this is accounting advice.

When IFRS 13 applies

IFRS 13 governs how fair value is measured and disclosed whenever fair value is required or elected — for crypto, typically the IAS 38 revaluation model (see crypto asset account classification). IFRS 13 does not decide whether to measure crypto at fair value; the classification and model choice decide that. Whether/how it applies is an auditor judgement on the facts.

The hierarchy and Level 1

A major cryptocurrency actively traded on liquid markets can meet Level 1 — but Level 1 requires an active market and an unadjusted identical-asset price, not automatic for every token/market. The level is assessed per asset and per market, auditor-confirmed.

The principal-market problem

IFRS 13 measures fair value using the price in the principal market (or, absent one, the most advantageous market). For crypto this is genuinely complex: the same asset trades on many venues, prices differ across them, and markets effectively never close. Identifying the principal market and the appropriate exit price requires judgement and a documented methodology — see crypto fair value & the principal market. A fact-specific, auditor-confirmed policy, not an obvious number.

Disclosure

For fair-valued crypto, broadly disclose: fair value at the reporting date, the hierarchy level, the valuation technique, and for Level 2/3 the significant inputs. The hierarchy level itself is a required disclosure — the entity must support which level a measurement sits in (see crypto asset disclosure notes). Framework-/fact-specific, auditor-confirmed.

Not the same as US GAAP

Analogous but not identical: US GAAP (ASU 2023-08) = fair value, changes in net income for in-scope crypto; IFRS fair value typically via the IAS 38 revaluation model with IFRS 13 governing measurement. Hierarchy concepts are similar in spirit; the standard applied, change routing, and disclosures follow the entity's actual framework (see IFRS vs GAAP for crypto), auditor-confirmed.

Practical guidance

1. Separate "whether" from "how" — classification decides FV; IFRS 13 measures it.
2. Assess Level 1 per asset and per market — don't assume it from a well-known token.
3. Document a principal-market / exit-price methodology — it is judgemental for crypto.
4. Disclose the hierarchy level and support it; add technique/inputs for L2/L3.
5. Apply the entity's actual framework — IFRS 13 ≠ the US GAAP basis.
6. Confirm level, market, and inputs with your auditor — fact-specific; not accounting advice.

Choosing a tool for fair-value measurement

A tool can produce the fair-value figure, but under IFRS 13 it cannot decide the hierarchy level for you. If you are evaluating one — Cryptio and Bitwave capture pricing and produce fair-value records — confirm it can:

• let you configure the price source and the principal-market methodology, rather than defaulting to an undocumented aggregate feed;
• capture the exact valuation timestamp, which matters for an asset that trades around the clock;
• carry supporting records that evidence the hierarchy level you assign to each asset;
• export the fair value and supporting data into the disclosure notes.

The tool produces the figure; the level, the principal market, and the inputs remain an auditor judgement.

How Wag3s fits in

Wag3s Ledger records the price source, timestamp, and fair value per asset with an audit trail and ERP export, so the IFRS 13 measurement and the hierarchy-level position can be evidenced. The level, the principal-market methodology, and the inputs are fact-specific and stay with your auditor; Ledger supplies the consistently captured figures and trail that support their review. See the Ledger product page.

Further reading

• Crypto Fair Value & the Principal Market
• IAS 38 Crypto as an Intangible Asset
• FASB ASU 2023-08 Crypto Fair Value
• Crypto Asset Disclosure Notes
• Auditing Crypto Fair Value
• Crypto Realized vs Unrealized Gain Accounts

Sources

• IFRS — IFRS 13 Fair Value Measurement: the fair-value hierarchy (Level 1 = unadjusted quoted prices in active markets for identical assets), the principal-market / most-advantageous-market basis, the exit-price definition, and the disclosure requirements (fair value at the reporting date, hierarchy level, valuation technique, and significant inputs for Level 2 and Level 3). IFRS 13 governs how fair value is measured and disclosed when fair value is required or elected; it does not decide whether to fair-value crypto.
• IFRS — IAS 38 Intangible Assets: the revaluation model that is the usual route by which fair value is elected for crypto under IFRS.
• FASB — Accounting Standards Update 2023-08, Subtopic 350-60: the US-GAAP fair-value-through-net-income basis, analogous to but not identical to the IFRS 13 measurement. Apply the entity's actual framework; the level, market, and inputs are a fact-specific auditor judgement and this is not accounting advice.