Hi,
Did anyone come across Cryptocurrency treatment? Here it is,
It does not classify as a Financial instrument but suits best as an Intangible Asset.
An entity treats it as:
Initial Recognition: At cost
Subsequent Measurement: At cost or Revaluation
If the entity uses Cost method on subsequent measurement, it is measured at Cost less Amortisation less Impairment if the Intangible Asset has finite life. If the Cryptocurrency has indefinite life, then it is measured at Cost less Impairment (tested annually).
Now when the entity uses Revaluation method on subsequent measurement Cryptocurrency, the fairvalue changes are treated in accordance with PPE standard.
A Crpto Trader will treat it as:
If Cryptocurrency is held to trade in the ordinary course of business, it is recognised as Inventory as per that standard.
In the ordinary course of business the Cryptocurrency Inventory is valued at lower of COST or NRV.
But if the broker is planning to sell it in the near future, then it must be valued at FVLCS.
Txs.
CAclubindia
