Page 46 - CMA Journal (Jan-Feb 2026)

Focus Section

14) IAS 8 Accounting Policies & Judgments 18) Investment Feasibility
IAS 8 is relevant because there is no specific Cryptocurrency offers the following benefits from an
cryptocurrency standard. Therefore, entities dealing in investment perspective:
cryptocurrencies must:
• High return potential
• Develop accounting policies that offer reliable and
• Portfolio diversification
relevant information
• Apply judgment consistently • Hedge against certain systemic risks
• Give a clear explanation of the treatment chosen • However, it also has the following risks:
IAS 8 is applicable in cryptocurrency reporting due to the • High volatility
gray areas involved.
• Regulatory uncertainty
15) Impairment Considerations under IAS 36
• Liquidity and custody risks
If cryptocurrency is accounted for under the cost model,
Accounting treatment directly affects reported
impairment testing under IAS 36 applies. Due to market
performance, therefore making transparency and
volatility, impairment indicators frequently arise, leading
consistency essential for investors.
to potential write-downs. For intangible assets with
indefinite useful lives, IAS 36 requires annual impairment 19. Strengths & Weaknesses
testing even without indicators.
Strengths Weaknesses
16) Summary of the Financial  Decentralization  Price instability
Reporting Disclosures  Transparency through  Lack of unified regulation
blockchain  Complexity in financial
The following disclosures are required under:  Global accessibility accounting and reporting
 The fastest mode of
• IAS 1: Significant accounting judgments and
payments
estimation uncertainty. Disclosure of significant risks
arising from crypto holdings, including volatility, 20) Future Outlook
custody, and concentration risk, where material.
There is increasing pressure on standard setters to
• IAS 10: Events after the reporting period due to sharp
develop a dedicated IFRS for cryptocurrencies. Until such
price movements
a standard is issued, entities must rely on the conceptual
• IAS 36: Impairment assumptions used for such
framework, IAS 38, IAS 2, IAS 8, IFRS 9, and IFRS 13 as the
calculations
main sources of guidance for their financial accounting
• IAS 38: Disclosures for intangible assets (useful life,
and reporting for cryptocurrencies.
amortization policy, carrying amount)
• IFRS 7 & 9: Applies only if crypto exposure arises 21) Conclusion
through financial instruments (e.g., derivatives, funds).
Cryptocurrency marks a major change in the way entities
Direct holdings of cryptocurrencies are outside the
hold and use assets. Although IFRSs offer guidance
scope of IFRS 7 and 9.
through IAS 38, IAS 2, and related standards, their
• IFRS 12: Applies only if interests in subsidiaries, joint
application relies heavily on professional judgment. The
arrangements, associates, or unconsolidated
lack of a specific standard leads to varied practices, but
structured entities exist. It is not generally applicable
clear accounting policies and strong disclosures can
to holding cryptocurrency.
reduce this risk. As cryptocurrencies become more
• IFRS 13: Fair value hierarchy disclosures when
common in global finance, financial reporting standards
revaluation or IAS 2 broker-trader measurement is
will need to adapt to reflect their unique nature.
used
17) Quick Reference for Applying Standards About the Author: Ahmad Tariq Bhatti is a Fellow Member of
to Cryptocurrency ICMA and an Associate Member of CIMA UK. With over 25 years of
experience across the UAE and Pakistan, he has held leadership roles
Purpose of Holding Applicable Measurement including CFO, Audit Expert, and Financial Consultant in banking,
Standard manufacturing, construction, healthcare, food, joinery, and trading
Trading or resale by IAS 2 (Broker- FV less costs to sectors. A PwC-trained accountant, his expertise covers financial
broker-trader Trader) sell (P&L) strategy, risk management, internal controls, budgeting, IFRS
Trading by a non- IAS 2 Lower of cost and NRV compliance, and business process improvement. He has also served
broker entity on the ICMAP UAE Branch Council and as a lecturer and trainer on
Investment or IAS 38 Cost or revaluation
treasury holding VAT, financial reporting, and emerging finance developments.
Derivatives on IFRS 7 & 9 Fair value through P&L Currently, he is serving as Director at Bizmax Global Consultants, UK.
crypto
44 ICMA’s Chartered Management Accountant, Jan-Feb 2026