(How 2025 marks a turning point in the accounting and taxation of digital assets)
The world's accounting rule-makers are finally aligning financial reporting with the digital economy.
In the United States, the Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2023-08, effective for fiscal years beginning after 15 December 2024. For most calendar-year entities, 2025 will be the first reporting period in which crypto assets are measured at fair value, with changes in fair value recognised in net income.
Across the Atlantic, the International Accounting Standards Board (IASB) is examining whether IFRS Standards should adopt a similar approach. The topic features in the IASB's November 2025 Agenda Paper 8B, confirming that crypto-asset measurement is back on the Board's active work plan. This follows the February 2025 Agenda Paper 17A, in which stakeholders overwhelmingly urged the IASB to modernise IAS 38 Intangible Assets, noting that it “its requirements do not work well for new types of assets not envisaged when it was developed (such as cryptocurrencies and carbon credits)” and calling for new requirements for intangible assets held for investing.
The New US GAAP Model: Fair Value with Net-Income Volatility
Before ASU 2023-08, entities generally accounted for holdings of crypto assets as indefinite-lived intangible assets under ASC 350 (Intangibles — Goodwill and Other), recorded at cost and tested for impairment. The new ASC 350-60 replaces that asymmetric approach with a fair-value framework and expanded disclosures.
Scope Criteria
Only crypto assets meeting all six conditions fall within the standard:
- Meet the US GAAP definition of an intangible asset (not a financial asset).
- Provide no enforceable rights to goods, services, or other assets.
- Exist on a blockchain or similar distributed ledger.
- Are secured through cryptography.
- Are fungible.
- Are not created or issued by the reporting entity or its related parties.
Out of scope are stablecoins that provide redemption rights, wrapped tokens, NFTs and internally issued coins.
Accounting Outcomes
- Measurement: At fair value each reporting period, with changes recognised in net income.
- Presentation: Separate line item from other intangible assets.
- Disclosure: Cost basis, fair value, number of units, restrictions and an annual roll-forward of additions, disposals and remeasurement gains and losses.
For preparers and auditors, this model replaces impairment-only losses with transparent, market-based volatility that better reflects economic reality.
IFRS Standards: Still Cost-Based, but Under Review
Under IFRS Accounting Standards, the June 2019 IFRIC agenda
decision remains authoritative.
Crypto assets are classified as:
- Intangible assets (IAS 38) when held for investment; or
- Inventory (IAS 2) when held for sale by a broker-trader, measured at fair value less costs to sell.
Accordingly, most IFRS reporters continue to apply a cost-less-impairment model, unless a demonstrable active market allows use of the revaluation model under IAS 38, a threshold seldom met in practice. Refer to our relevant guide for accounting for digital assets under current principles.
IASB Agenda 2025: Fair Value Back on the Table
The IASB's November 2025 Agenda Paper 8B confirms that accounting for cryptoassets has “received strong support,” with many stakeholders favouring fair value measurement for investment-type holdings. The Board is considering either a broad project on holders, custodians and issuers of cryptoassets, or a narrower one focused on measurement improvements and whether some payment tokens could qualify as cash equivalents.
Complementing this, Agenda Paper 17A (February 2025) reports that almost all stakeholders view IAS 38 Intangible Assets as outdated and support exploring fair-value approaches for investment-type intangibles such as cryptocurrencies and carbon credits.
Together, these discussions show the IASB's clear intent to modernise IFRS requirements for digital assets, even though formal amendments remain under research.
Practical Implications
- Comparability: Multinationals will face divergent accounting outcomes – US companies/parents showing fair-value volatility while IFRS reporting companies remain at cost.
- Systems and controls: Real-time pricing data, custody verification and governance will be essential to support fair-value measurement.
- Investor expectations: IFRS entities may face market pressure to disclose voluntary fair-value information to align with US GAAP peers.
Cyprus: Introducing an 8 % Flat Tax on Crypto-Asset Gains
In parallel with these accounting changes, Cyprus is advancing a dedicated tax regime for crypto assets as part of the 2025 Tax Reform Package currently before Parliament. The proposal introduces an 8% flat tax on profits arising from the disposal of crypto assets, providing legal clarity and competitiveness for individuals and entities engaged in digital-asset transactions within or through Cyprus.
Conclusion
2025 marks a pivotal year for digital-asset reporting:
- US GAAP now mandates fair-value measurement for qualifying crypto assets, with changes recognised in net income.
- IFRS remains under IAS 38 and IAS 2 for the moment, but reform is underway.
- Cyprus complements these global shifts by proposing an 8 % flat tax on crypto-asset gains.
The global framework for crypto assets is converging toward fair-value transparency, detailed disclosure and integrated taxation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
