Abstract
The Fourth Industrial Revolution (4IR) has brought about radical changes including the phenomenon of cryptocurrencies. The global cryptocurrency market capitalisation has recently tipped over $1.8 trillion. This growing use of cryptocurrencies has led to entities relying on the accounting for cryptocurrencies to measure and depict performance. However, it is uncertain whether the application of the existing standards encapsulates the unique characteristics of cryptocurrencies. Despite the unique digital nature of cryptocurrencies, the IASB has not issued specific guidance noting that the existing IFRS standards are sufficient to determine the accounting treatment of cryptocurrencies. This has resulted in some entities accounting for cryptocurrencies as intangible assets. This paper assesses whether accounting for cryptocurrencies as intangible assets provide decision-useful information to the users of the financial statements. This paper applies qualitative, doctrinal research as the IFRS standards are analysed to determine whether they provide decision-useful information based on the expectations of users and the nature and characteristics of cryptocurrencies. This paper finds that the measurement and presentation principles of intangible assets do not provide relevant and useful information in the context of cryptocurrencies. This is because users are concerned about the fair value of cryptocurrencies and would want to see both increases and decreases in profit or loss. Furthermore, users would want to understand the nature of the risks relating to cryptocurrencies, such as price risk. A possible solution is for the IASB to consider issuing specific guidance that measures and presents cryptocurrencies in a manner consistent with users’ expectations.