Accounting for crypto assets under IFRS 18 versus FASB ASU 2023-08

Corporations are starting to wholeheartedly embrace cryptocurrencies. According to CoinDesk, Q2 2025 saw a 58% increase in the number of publicly listed companies holding Bitcoin. As these currencies are becoming integral to business operations, demand for clear and transparent financial reporting has come under the spotlight. 

Without consistent accounting standards, a company could misrepresent its financial position. If it does so, it could attract attention from regulators – or even risk investor mistrust. For example, a tech firm that holds £10 million in Bitcoin could report a significantly different financial outcome if it applies International Financial Reporting Standards (IFRS) instead of US Generally Accepted Accounting Principles (GAAP).

But first, it's important to understand how IFRS 18 and the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU 2023-08) affect crypto asset accounting. There are a few key differences that businesses must comprehend if they're to successfully navigate these evolving frameworks.

Crypto assets under IFRS 18

IFRS 18 comes into effect on or after the 1st of January 2027 and focuses on financial statement presentation. It doesn't directly address crypto assets per se, but instead talks about crypto accounting around existing International Accounting Standards (IAS), like IAS 38 for intangible assets or IAS 2 for inventories. The 2019 IFRS Interpretations Committee agenda decision states that cryptocurrencies like Bitcoin are intangible assets under IAS 38, unless they're held for sale in the ordinary course of business. In that case, IAS 2 applies.

When it comes to IAS 38, you'll need to measure crypto assets at cost or, if there's an active market, at fair value. Record gains or losses as other comprehensive income (OCI), not profit or loss. 

If a retailer holds £5 million in Ethereum for investment purposes, they may initially record this asset at acquisition cost. But if its fair value rises to £7 million, the £2 million gain must be recognised in OCI. It wouldn't affect that income unless the asset sells. This approach may obscure the economic impact of crypto holdings, but it does reduce the income statement's volatility.

IAS 2 allows crypto miners or brokers to measure net realisable value. However, the IFRS does lack specific guidance on emerging crypto transactions, like decentralised finance protocols. This could be challenging to interpret. Dual reporters should apply IFRS carefully throughout their business model to ensure compliance.

Crypto assets under FASB ASU 2023-08

In December 2023, ASU 2023-08 gave clear guidance for crypto assets under US GAAP. These measures are effective for fiscal years beginning after the 15th of December 2024. The standard mandates fair value measurement for any in-scope crypto assets, and changes must be recorded in that income. 

These in-scope assets have to meet stringent criteria: They must be intangible, fungible, reside on a blockchain, and should not provide enforceable rights to other assets or services. This means that Bitcoin and Ethereum are in-scope, but wrapped tokens or non-fungible tokens (NFTs) are not if they confer enforceable rights. For instance, a US investment firm that holds £3 million in Bitcoin must measure the asset at fair value during each reporting period. If the value drops to £2.5 million, the shortfall loss goes towards net income and directly impacts profitability. 

ASU 2023-08 also needs a separate balance sheet presentation of crypto assets and enhanced disclosures, like the reconciliation of beginning and ending balances. Any transaction costs are capitalised unless certain industry-specific guidance calls for expensing. This fair value approach overturns the previous cost-less-impairment model, which only applied to declines in value.

The key differences

Here are the fundamental differences between IFRS 18 (via IAS 38/IAS 2) and ASU 2023-08 as to how they affect financial reporting.

Measurement model

IFRS allows you to choose between cost or fair value revaluation under IAS 38, with fair value changes in OCI. The ASU 2023-08 mandate focuses on free value with changes in net income. A business holding £1 million in Litecoin may see a value rise to £1.5 million. Under the fair value option of IFRS, this gain goes to OCI, but under ASU 2023-08, it must be recorded in net income to increase reported profits.

Scope and applicability

The IFRS guidance is interpretive and relies on IAS 38 or IAS 2, depending on the business model. Meanwhile, ASU 2023-08 defines a narrow scope and excludes NFTS or assets with enforceable rights.

Presentation and disclosure

The IFRS lacks specific crypto presentation rules, while ASU 2023-08 requires a separate balance sheet presentation and detailed disclosures. If a miner receives £2 million in Bitcoin rewards, they need to aggregate it with other intangibles under IFRS. However, they must disclose detailed reconciliations under ASU 2023-08.

Volatility

Unlike the IFRS OCI approach, the net income recognition under ASU 2023-08 increases earnings volatility. So, a retailer that has £10 million in crypto assets and then experiences a £3 million value swing would need to report this in profit or loss under US GAAP, but in equity otherwise – which would have a sizeable effect on the business's key performance metrics.

HLB understands crypto assets

It can be tough to navigate the complexities of crypto asset accounting without deep expertise. If you're looking for guidance, HLB's global network of professionals offer tailored solutions that can help you comply with IFRS and US GAAP, while optimising your financial reporting. Whether you're a crypto miner, broker, or investor, get in touch with HLB today.

We’ll provide you with clarity on emerging tech, measurement, presentation, and disclosure requirements to help mitigate your risks.