Page 21 - CMA Journal (Jan-Feb 2026)

Focus Section
Focus Section

Accounting for Crypto Assets in Pakistan:

Challenges, Standards and the Way Forward

Introduction tion, measurement,
impairment, and disclo-
Crypto assets, also known as digital assets or sure. Cryptocurrencies,
cryptocurrencies, have quickly developed from specialized utility tokens that
technological innovations into important parts of provide access to
international financial systems. Their market capitalization specific platforms or
has reached significant levels, drawing both institutional services, security
and retail participants (Georgiou et al., 2024; Özcan, 2025). tokens that represent
These assets, which are based on distributed ledger ownership or debt-like
technologies such as blockchain, allow decentralized claims, and stablecoins
peer-to-peer transactions without the need for conven- whose value is usually
tional financial intermediaries. This opens up new pegged to fiat curren-
possibilities and creates complexities for financial reporting, cies or other underlying
auditing, and regulation. Professional accountants must assets, are the broad
apply existing frameworks such as IAS 38 (Intangible Assets), categories into which
IAS 2 (Inventories), and IFRS 13 (Fair Value Measurement) contemporary litera- Imtiaz Bashir, FCMA
while exercising significant professional judgement due to ture divides crypto Senior Instructor of Commerce
the lack of specific accounting standards under the assets (Georgiou et al., Government Graduate College
International Financial Reporting Standards (IFRS), despite 2024; Daruwala, 2024). of Commerce, Multan
the growing economic significance of crypto assets
(Daruwala, 2024; Akanbi, 2024). Because of their considerable price volatility and limited
acceptability as a widely used medium of exchange,
Due to the high price volatility and unique characteristics of cryptocurrency assets typically do not qualify as cash or cash
digital assets, recent research shows that reliance on broad equivalents under International Financial Reporting
standards leads to diverse accounting methods, Standards. Additionally, the majority of cryptocurrencies are
inconsistent classification, and significant valuation not classified as financial instruments under IFRS 9 because
challenges (Akanbi, 2024; Özcan, 2025). Additionally, they do not establish contractual rights to receive cash or
systematic reviews of the literature on blockchain and any financial asset (IFRS Foundation, 2022). Therefore,
accounting highlight the ongoing need for empirical professional accountants must apply existing standards
research and standards that address the distinct based on the entity’s business model and the purpose of
characteristics of cryptocurrency assets and their impact on holding the crypto asset in the absence of a specific IFRS
financial reporting quality, auditing, and accounting standard.
processes (Georgiou et al., 2024).
According to current guidelines and IFRIC agenda decisions,
These challenges are further intensified in developing cryptocurrency assets are often categorized as either
countries such as Pakistan by the absence of clear regulatory inventories under IAS 2 or intangible assets under IAS 38.
and reporting guidelines. This underscores the necessity for Cryptocurrencies are regarded as intangible assets since
qualified accountants to carefully interpret and implement they typically fit the definition of an identifiable,
international standards while encouraging regional non-monetary asset without physical substance when held
frameworks that ensure accountability and transparency in for investment or long-term value appreciation. Conversely,
financial statements. The role of accountants in protecting companies involved in cryptocurrency trading or
the integrity of financial reporting and advising broker-dealer operations may classify such holdings as
stakeholders on risk, valuation, and compliance issues inventories, measured according to IAS 2, often at fair value
related to crypto assets is becoming increasingly important less selling expenses (Akanbi, 2024; Özcan, 2025).
as the use of cryptocurrencies grows.
International Accounting Treatment of
Nature and Classification of Crypto Assets
Crypto Assets under IFRS
Crypto assets are a diverse collection of digital instruments
that vary in terms of risk exposure, usefulness, and economic Because there is no specific International Financial
value. Understanding the characteristics of cryptocurrency Reporting Standard for cryptocurrency assets, professional
assets is crucial from an accounting perspective since their accountants must rely on existing standards using their
classification directly affects financial statement recogni- guiding principles.

ICMA’s Chartered Management Accountant, Jan-Feb 2026 19