Page 23 - CMA Journal (Jan-Feb 2026)

Focus Section

Errors, inconsistent implementation of IFRS, and potential of professional judgement and consistency in application.
ethical violations are all more likely in the absence of
Going forward, it is evident that regulators, standard-setting
authoritative guidance and specialized training. All these
bodies, and professional associations such as ICMA Pakistan
challenges underscore how urgently specialized
must collaborate to develop interpretive guidance, training
professional frameworks, interpretive guidelines, and
programs, and policy discussions tailored to regional
capacity-building programs are needed to enable
circumstances. Maintaining the credibility of financial
high-quality accounting for cryptocurrency assets.
reporting in an increasingly digital environment requires
Taxation and Compliance Considerations enhancing accountants’ technical expertise with digital
assets, alongside robust disclosure practices and effective
Due to the lack of explicit crypto-specific tax legislation and governance. The accounting professionals in Pakistan can
the distinctive economic features of cryptocurrency, the make a meaningful contribution to innovation while
Federal Board of Revenue in Pakistan has not yet issued upholding the principles of accountability, transparency,
comprehensive laws or precise regulations regarding the and public interest by actively addressing these challenges.
taxation of cryptocurrency transactions. As a result, to
determine taxability, tax authorities and practitioners must References
interpret existing tax laws, which were drafted without
• Akanbi, A. (2024). Financial Reporting and Accounting Treatment of Crypto Assets:
specifically addressing digital assets. This ambiguity directly Professional Accountants Perspectives. International Journal of Accounting,
affects the computation of taxable income and compliance Finance and Risk Management, 9(1), 1–11.
requirements by making it difficult to classify • Daruwala, Z. (2024). Critical Investigation on the IFRS Reporting Requirements of
Cryptocurrencies. International Journal of Financial Accountability, Economics,
cryptocurrency transactions as capital gains, business Management, and Auditing, 6(4), 704–724.
income, or other taxable events (Alabdullah & Alshurideh, • Georgiou, I., Sapuric, S., Lois, P., & Thrassou, A. (2024). Blockchain for Accounting
2024; Daruwala, 2024). and Auditing—Accounting and Auditing for Cryptocurrencies: A Systematic
Literature Review and Future Research Directions. Journal of Risk and Financial
The decentralized and pseudonymous nature of blockchain Management, 17(7), 276.
transactions makes tax compliance even more challenging. • Özcan, İ. (2025). Current Trends in Accounting for Crypto Assets: A Comparative
Analysis of Accounting Practices in the US and Türkiye. Research of Financial
Unlike traditional financial instruments, cryptocurrency Economic and Social Studies, 10(3), 328–344.
transfers often occur through wallets and exchanges spread • IASB. (2022). International Financial Reporting Standards (IFRS). London: IFRS
across multiple jurisdictions, making it difficult for tax Foundation.
authorities to monitor transactions, enforce reporting, and • IFRS 13. (2022). Fair Value Measurement. London: IFRS Foundation.
• IAS 2. (2022). Inventories. London: IFRS Foundation.
ensure accurate income declaration. According to studies,
• IAS 38. (2022). Intangible Assets. London: IFRS Foundation.|
these characteristics increase the risk of underreporting and IFRIC. (2021). Agenda Decisions on Cryptocurrencies and Intangible Assets.
non-compliance, especially in developing countries with London: IFRS Foundation.
potentially inadequate regulatory frameworks (Nakamoto & • State Bank of Pakistan (SBP). (2023). Cryptocurrency Regulatory
Notices. Karachi: SBP.
Lee, 2025; Özcan, 2025).
• Securities and Exchange Commission of Pakistan (SECP). (2023). Digital Assets
Guidelines. Islamabad: SECP.
Role of Policymakers and Regulators • Federal Board of Revenue (FBR). (2023). Tax Notices on Cryptocurrency
Transactions. Islamabad
From the standpoint of financial reporting, regulators can
• Alabdullah, T. T. Y., & Alshurideh, M. (2024). Taxation practices for cryptocurrency
support the industry by endorsing ICMA Pakistan’s transactions: Challenges and opportunities. International Journal of Accounting
professional guidelines and, when necessary, aligning local and Financial Reporting.
regulations with IFRS-based treatments. To reduce disputes • Nakamoto, S., & Lee, J. (2025). Blockchain adoption and tax compliance: Evidence
from emerging markets. Journal of International Taxation Studies.
and compliance challenges, the FBR should establish clear
• Dusuki, A. W., & Abozaid, A. (2007). A critical appraisal on the challenges of
and uniform standards for the recognition of profits, losses, realizing maqasid al-Shariah in Islamic banking and finance. IIUM Journal of
and transaction taxes associated with cryptocurrency assets. Economics and Management, 15(2), 143–165.
Importantly, by addressing issues related to money • Howson, P. (2019). Tackling climate change with blockchain. Nature Climate
Change, 9(9), 644–645.
laundering, investor protection, cybersecurity, and financial
• Khan, T., & Rabbani, M. R. (2021). Is cryptocurrency halal? An Islamic finance
stability, the government must balance innovation with risk perspective. Journal of Islamic Finance, 10(2), 1–16.
management. • Uddin, M. A. (2022). Cryptocurrency and Islamic law: An analytical study. Arab Law
Quarterly, 36(4), 327–349.
Conclusion • AAOIFI. (2020). Shariah Standards. Manama: Accounting and Auditing
Organization for Islamic Financial Institutions.
Crypto assets pose a significant challenge to established About the Author: The writer is a Fellow Member of ICMA and
accounting principles and legal frameworks, resulting in Senior Instructor at the Government College of Commerce, Multan.
substantial changes in the global financial environment. With over 20 years of experience in management accounting,
There is considerable confusion regarding recognition, corporate finance, and taxation, he has taught at various
measurement, disclosure, and compliance for professional universities and professional institutes across Pakistan. He
accountants, especially in Pakistan, due to the absence of previously worked as Assistant Manager Accounts at Orient Group
clear IFRS standards and localized regulatory guidance. As of Companies and is currently a faculty member at ICMA’s Multan
this essay shows, current standards like IAS 38, IAS 2, IFRS 13, campus while pursuing a PhD. He has authored over nine
and IAS 36 provide a practical but imperfect foundation for publications in national refereed journals and conferences on
accounting for cryptocurrency assets, requiring a high level management, leadership, corporate finance, and governance.

ICMA’s Chartered Management Accountant, Jan-Feb 2026 21