“Bitcoin and cryptos are not currency or legal tender”, international accounting committee, IFRIC says
Korea Accounting Institute (KAI) announced a new standard by IFRIC on cryptocurrencies and their place on accounting record keeping as intangible assets.
A directive by the International Financial Reporting Interpretations Committee (IFRIC) in a meeting this June, labelled cryptocurrency assets as “intangible assets”. According to a report on Korean Times, the global accounting regulator – associated with the International Financial Reporting Standards (IFRS) Foundation under the International Accounting Standards Board (IASB) – does not consider the digital assets as currencies or tangible assets.
Over 140 countries follow the accounting practices put forward by the committee and bookkeepers across the world are expected to follow the latest international standard. However, the standard is set to open up a long standing debate among crypto business operators following their recognition of crypto as a currency.
Cryptocurrencies are Lintangible Assets
IFRIC report on cryptocurrencies states the digital assets are neither legal tender nor a financial asset. It further states the asset is neither a form of cash nor equity. Furthermore, the statement reads,
“They [cryptocurrencies] do not give rise to a contractual right for the holder and it is not a contract that will or may be settled in the holder's own equity instruments.”
As a separable asset – an asset that can be
“separated from the holder and sold or transferred individually and it does not give the holder a right to receive a fixed or determinable number of units of currency,”
– Bitcoin and other cryptos are labelled “intangible assets” for accounting purposes.