IFRS and Cryptocurrency – ITEMS PRESENTED AND DISCUSSED AT THE JANUARY 10, 2018 MEETING
UPDATE ON PREVIOUS ITEMS DISCUSSED BY THE GROUP
IAS 16: Capitalization of Costs
IFRS 3 and IAS 39: Transaction Price Allocation
IASB’s Accounting Standards Advisory Forum Issues Submission U.S. Tax Reform
IFRS and Cryptocurrency – At meeting on January 10, 2018, the IFRS Discussion Group of the AcSB discussed possible methods of accounting for cryptocurrencies under IFRSs, including whether cryptocurrencies should be considered to be (i) financial instruments under IAS 32/IFRS 9; (ii) inventory under IAS 2; or (iii) intangible assets under IAS 38. The Group noted that IFRS Standards were designed before cryptocurrencies existed. As a result, providing financial information about a cryptocurrency that is relevant and faithfully representative within the existing confines of the IFRS Standards is difficult given the challenges pointed out with the various accounting models discussed by the Group.
The Group recommended that the issue be discussed with the AcSB to determine whether it should be raised to the IASB or the IFRS Interpretations Committee. The IASB staff who observed the Group’s discussion indicated that the IASB is actively monitoring the developments in this area.
Representatives from the Canadian Securities Administrators (CSA)
Representatives from the Canadian Securities Administrators (CSA) observed that transactions involving cryptocurrencies are beginning to percolate in the market. Similarly CSA Staff Notice 46-307 “Cryptocurrency Offerings” was issued to assist reporting issuers to determine if such offerings would be considered a security under securities law. Although the definition of a security under securities law is not the same as the definition of a financial instrument under IAS 32 Financial Instruments: Presentation, considering the guidance in the staff notice may complement an entity’s analysis on the accounting for cryptocurrencies. An entity’s analysis should also consider whether there is an active market for the cryptocurrency it holds. Overall, the entity should clearly disclose the judgments applied in arriving at a certain accounting treatment.