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There is no single accounting method called the “Ethereum accounting method.” How an entity accounts for ether (ETH) depends on its reporting framework, whether it holds the asset or engages in another activity, and the facts of the arrangement. For in-scope cryptocurrency holdings, IFRS points to IAS 2 or IAS 38 depending on the holding’s purpose; U.S. GAAP requires fair-value measurement under FASB’s ASU 2023-08 for crypto assets that meet the update’s criteria.
First define what is being accounted for
The holdings guidance discussed here addresses cryptocurrency held by an entity—not every right, contract, or service connected with Ethereum. The IFRS Interpretations Committee’s 2019 agenda decision considered a defined category of cryptocurrency: a digital or virtual currency recorded on a distributed ledger and secured using cryptography, not issued by a jurisdictional authority or another party, and not giving the holder a contract with another party.
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For that category, the Committee concluded that a holding meets IAS 38’s definition of an intangible asset: it is separable and does not give the holder a right to receive a fixed or determinable number of units of currency. IAS 38 describes an intangible asset as identifiable, non-monetary, and without physical substance. This conclusion is about the cryptocurrency holdings within the decision’s scope; it is not a universal classification for every cryptoasset or Ethereum-related arrangement.
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| Question | IFRS | U.S. GAAP |
|---|---|---|
| Guidance for holdings | IFRIC’s 2019 agenda decision directs in-scope holdings to IAS 2 or IAS 38, depending on the facts. | FASB Accounting Standards Update 2023-08, Topic 350-60, applies to crypto assets meeting its criteria. |
| Measurement | The applicable standard governs: IAS 2 for qualifying ordinary-course sale holdings; otherwise IAS 38 for the holdings addressed by the decision. | Fair value at each reporting period for in-scope assets. |
| Where changes are recognized | Depends on the applicable standard and measurement basis; IFRS 13 disclosures also apply when holdings are measured at fair value. | Changes in fair value are recognized in net income. |
| Effective-date information | The cited 2019 agenda decision does not state a new effective date. | Applies to fiscal years beginning after December 15, 2024, including interim periods in those fiscal years; early adoption is permitted. |
This comparison is limited to the holdings guidance described here. It does not determine accounting for every Ethereum-related activity or contract.
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IFRS: classify the holding by its purpose
When IAS 2 applies
Under the IFRIC conclusion, IAS 2 applies when cryptocurrency is held for sale in the ordinary course of business. The standard applied determines the accounting and measurement; the fact that an asset is ether does not, on its own, establish that IAS 2 applies.
IAS 2 also contains a provision for qualifying commodity broker-traders. Such entities consider fair value less costs to sell for inventory principally acquired for near-term sale and profit from price fluctuations or a broker-trader margin. This is a limited provision, not a general rule for entities that hold ether.
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When IAS 38 applies
If IAS 2 does not apply, the IFRIC decision points to IAS 38 for the cryptocurrency holdings within its scope. The Committee’s reasoning was that the holding is separable and does not provide a right to receive a fixed or determinable number of units of currency. Apply IAS 38 to the actual facts rather than treating this conclusion as covering every token, claim, or contractual right.
U.S. GAAP: check scope before applying fair value
FASB ASU 2023-08 requires an entity to measure qualifying crypto assets at fair value each reporting period and recognize changes in net income. The amendments apply to all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted.
An asset must meet all of the update’s criteria. FASB’s published criteria include that it:
- Meets the definition of an intangible asset.
- Does not provide enforceable rights or claims on underlying goods, services, or other assets.
- Is created or resides on a blockchain or similar distributed ledger.
- Is secured through cryptography.
- Is fungible.
- Was not created or issued by the reporting entity or its related parties.
Do not assume that a token is covered simply because it is described as cryptocurrency. Whether ether meets the applicable criteria should be assessed against the authoritative text and the entity’s facts.
Staking, lending, custody, and fees need separate analysis
Accounting for a simple holding does not by itself resolve the treatment of staking or validator rewards, lending, customer custody, transaction fees, or other contractual arrangements. Those fact patterns may involve rights and obligations beyond holding the cryptocurrency described in the IFRIC decision or the assets covered by FASB’s criteria. Analyze them under the applicable framework and current authoritative guidance; the holdings rules alone do not establish a universal treatment.
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IFRS disclosures
The IFRIC agenda decision points entities to the disclosure requirements in IAS 2 for holdings classified as inventory and IAS 38 for holdings accounted for under that standard. If an entity measures holdings at fair value, it also considers IFRS 13 disclosures. The Committee additionally highlights disclosure of significant judgments and consideration of material non-adjusting events after the reporting period.
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U.S. GAAP disclosures
FASB says ASU 2023-08 requires disclosures about significant holdings, contractual sale restrictions, and changes in holdings during the reporting period.
What the accounting answer depends on
To determine the treatment for a particular ETH balance, identify the reporting framework and period, establish whether the item is a cryptocurrency holding or a separate contractual activity, and test the asset and the entity’s purpose against the relevant standard’s scope. The IFRIC conclusion dates to 2019, while FASB’s later ASU applies on its stated effective-date basis; confirm the authoritative requirements applicable to the financial statements being prepared.
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