IAS 38 and Crypto: The IFRS Intangible-Asset Treatment

IFRS reporters expecting a crypto standard do not have one. The governing text is an IFRS Interpretations Committee agenda decision from June 2019, and it routes crypto into intangible-asset or inventory accounting. This guide is that decision, the IAS 38 measurement models, the active-market constraint, and why IFRS and US GAAP now diverge sharply.

TL;DR

• No crypto-specific IFRS standard. The IFRS IC June 2019 agenda decision governs.
• Crypto held for sale in the ordinary course of business → IAS 2; otherwise → IAS 38 (intangible asset).
• A crypto holding is not cash and not a financial asset.
• IAS 38 default = cost model (cost less impairment, no write-up). Fair value only via the revaluation model, and only with an active market — gains to OCI, not profit or loss.
• Divergence: US GAAP (ASU 2023-08) mandates fair value through net income; IFRS does not (see FASB ASU 2023-08 and IFRS vs US GAAP).
• Disclosures: IAS 38 ¶118–128 / IAS 2 ¶36–39 / IFRS 13 ¶91–99 (if fair-valued).

The governing text: the June 2019 agenda decision

There is no IFRS standard written for crypto. The authority is the IFRS Interpretations Committee's June 2019 agenda decision, "Holdings of Cryptocurrencies." It addresses a defined subset: a digital or virtual currency on a distributed ledger, secured by cryptography, not issued by a jurisdictional authority or other party, and conferring no contract between holder and another party.

The decision reaches three conclusions:

1. A crypto holding is not cash — no cryptocurrency is used as a medium of exchange and unit of pricing to the extent all transactions would be measured in it.
2. It is not a financial asset — not cash, not another entity's equity, not a contractual right to cash/another financial asset.
3. It therefore meets the IAS 38 intangible-asset definition: it is separable (can be sold/transferred) and is not a right to a fixed or determinable number of units.

The IAS 2 / IAS 38 fork

The first question is the business model:

Most corporates holding crypto on treasury or as a strategic asset are in IAS 38. The broker-trader path is the exception, not the norm.

IAS 38: cost vs revaluation

Within IAS 38 there are two measurement models:

• Cost model (the default): cost less accumulated impairment. Impairments are recognised; no write-up when value recovers. This is the IFRS analogue of the legacy US-GAAP problem (see crypto impairment vs fair value).
• Revaluation model: carry at fair value only if there is an active market for the asset. Revaluation increases go to other comprehensive income (a revaluation surplus); they do not flow through profit or loss (decreases reverse a surplus first, then hit P&L).

The active-market condition is restrictive: it must be met for the specific asset, and many tokens will not qualify. So IFRS fair value for crypto is conditional and OCI-routed, not the mandatory P&L fair value of US GAAP.

Why IFRS and US GAAP now diverge

US GAAP's ASU 2023-08 mandates fair value through net income for in-scope crypto. IFRS has no equivalent mandate. A dual-reporting Web3 entity will therefore show different crypto carrying amounts and different earnings under each framework — IFRS often at cost-less-impairment, US GAAP at full fair value in net income. This is one of the largest framework differences in the space (see IFRS vs US GAAP for crypto).

Disclosures

• IAS 38 holdings: disclosures in IAS 38 ¶118–128.
• IAS 2 (held for sale in ordinary course): IAS 2 ¶36–39.
• If holdings are measured at fair value: IFRS 13 ¶91–99.
• Plus the judgements made in determining which standard applies.

Practical guidance

1. Classify by business model first — broker-trader (IAS 2) vs everything else (IAS 38).
2. Default to the IAS 38 cost model unless an active market supports revaluation.
3. If revaluing, route gains to OCI (revaluation surplus), not profit or loss.
4. Track impairment under the cost model — recognised on decline, no reversal to a write-up.
5. Document the standard-selection judgement and give the ¶118–128 / ¶36–39 / ¶91–99 disclosures.
6. Reconcile to the US-GAAP number if dual-reporting — the gap is expected, not an error.

How vendor tools handle IFRS crypto

Cryptio and Request Finance maintain cost basis, impairment, and (where applicable) fair value per asset, and produce the IAS 38 / IAS 2 disclosure data. Confirm the tool can hold both an IFRS cost-less-impairment carrying amount and a fair value (for revaluation or for a parallel US-GAAP set) — IFRS and US GAAP need different numbers from the same ledger.

How Wag3s helps

Wag3s Ledger carries crypto at an IAS 38 cost-less-impairment basis with an impairment trail, supports a revaluation/fair-value parallel where an active market exists, and produces the IAS 38/IAS 2/IFRS 13 disclosure data — and the reconciliation to a US-GAAP ASU 2023-08 set for dual reporters. See the Ledger product page and the Wag3s for accountants page.

Further reading

• FASB ASU 2023-08: Fair-Value Crypto Accounting
• IFRS vs US GAAP for Crypto
• Crypto Held as Inventory (IAS 2)
• Crypto Impairment vs Fair Value Accounting
• Stablecoin Accounting Treatment
• Crypto Audit Readiness

Sources

• IFRS Interpretations Committee — Holdings of Cryptocurrencies, June 2019 agenda decision — IFRS.org
• IAS 38 Intangible Assets (cost model; revaluation model conditional on an active market; ¶118–128 disclosures)
• IAS 2 Inventories (held for sale in the ordinary course of business; ¶36–39 disclosures)
• IFRS 13 Fair Value Measurement (¶91–99 disclosures where holdings measured at fair value)