Andreas Barckow, chair of the International Accounting Standards Board, said in a recent speech that while there had been serious consideration given to the matter, developing a standard for cryptocurrencies is not a priority right now.
The chair acknowledged that cryptocurrencies are indeed a major topic of conversation right now, which is why it was on the shortlist for final consideration on the board’s project agenda. It ultimately decided, however, that other matters — such as intangible assets, statement of cash flows, and climate-related risks — were a bigger priority. The board believed the topic fell short on the two criteria it generally has for considering whether to launch a new project:
- Is there a gap in the literature and are investors not getting the information they need?
- Is the issue significant and prevalent across jurisdictions and industries?
On the first point, he said the IFRS Interpretations Committee in its 2018/2019 session concluded that cryptocurrencies should either be accounted for as an intangible asset at cost, with the option to measure at fair value if the item is traded on a liquid market, or as inventory at fair value, in the case of broker-dealers.
“So even though there is no specific standard on cryptos under IFRS, that does not mean that our existing literature would not provide for an accounting treatment,” he said.
On the second criteria, he said there is little evidence that accounting for cryptocurrencies is of global significance or prevalence for companies reporting under IFRS.
“Therefore, the topic was not added to our work plan for now. We will keep it on our radar screen, horizon-scan for any developments, and liaise closely with our colleagues at FASB on their project,” he said.
The IASB’s view stands in contrast with that of the Financial Accounting Standards Board, which has had a live project on digital assets, which includes cryptocurrencies, for some time now. Most recently, the FASB decided to propose that cryptocurrencies be measured at fair value (see previous story).