The members of the EACB welcome the opportunity to comment on the EFRAG’s Discussion Paper on the accounting treatment of crypto-assets (liabilities).
The EACB acknowledges that there is the growing need for the crypto market that is framed, with enforceable legal contracts, and clear and transparent accounting standards. In this regard, the EACB appreciates the initiative undertaken by the EFRAG to assess the potential need for the development of IFRS accounting standard for crypto-assets (liabilities).
The EACB Members particularly want to stress that the accounting treatment of crypto-assets should go hand in hand with the proposed prudential regulation of banks’ crypto-asset exposures. A double accounting or complicated reconciliation between IFRS standards and prudential standards must be avoided. Specifically, the accounting treatment of crypto-assets based on current IFRS Standards should be possible as long as the economic functions of such crypto-assets are equivalent to traditional assets, such as shares, bonds, commodities or cash.
However, should there be differences in the level of legal rights (e.g., rights to cash flows, claims in insolvency, etc.) or in the likelihood of paying the owner amounts due on time, as compared with traditional asset, then either the clarifying guidance on the application of existing IFRS requirements or the amendment of IFRS Standards to account for crypto-assets have to be implemented, when possible.
As for holders accounting, the EACB members acknowledge that there is lack of explicit IFRS guidance for when crypto-assets are non-financial assets held as investments and agree particularly that IAS 2 and IAS 38 may need to be updated to better outline the relevant measurement of intangible assets and commodities for holders of crypto-assets.