About Crypto Currency Assets
Crypto Assets are a digital representation of value that you can transfer, store or trade electronically. These are sub-sets of Digital assets that use cryptography to protect digital data and distributed ledger technology to record transactions.
Cryptocurrencies are gaining wider acceptance year after year all over the world as evident from the perennial increase in the volume of trade but there is no specific guidance given under Accounting Standards (AS) or Indian Accounting Standards (Ind AS) on accounting for cryptocurrency or virtual currency.
Present situation – Accounting in books:
In order to provides some clarity,
The IFRS Interpretation Committee provided guidance and stated:
but these crypto assets have different terms and conditions and the purpose for holding them differs among holders. Hence, holders of a crypto assets needed to evaluate their own facts and circumstances and assess the business model in order to determine which accounting classification and measurement under current IFRS (accounting standards) should be applied, thus, making it a cumbersome task.
On the other side,
Further update to present situation:
There have been no definite manner of measuring and recognizing the digital assets in the financial statements. In order to clear the ambiguity on accounting of digital assets, the Financial Accounting Standard Board (FASD) in its meeting dated October 12, 2022 proposed all entities to measure crypto assets at Fair Value, using guidance in Topic 820, Fair Value Measurement of Accounting Standards update 2022-23.
Topic 820, Fair Value Measurement states that:-
Once the position is approved by FASB, the same will be confirmed by the Indian regulatory authorities and The Institute of Chartered Accountants of India (ICAI) to confirm on the adoption of methodology for valuation and disclosure of digital assets in Financial statements.