Do Accounting Standards Still Hold Up for Digital Assets?
IAS 38 was developed for patents and software licences, long before anyone was trading tokens around the clock on a public market. We want to hear from accountants, finance leaders and investors: what needs to change?
Why IAS 38 Doesn't Fit Digital Asset.
IAS 38 governs intangible assets such as patents, licences and brands. With no dedicated standard of their own, digital assets land here by default. Three parts of it don't hold up:
Active Markets Are Uncommon
IAS 38 says active markets for intangible assets are uncommon. But some digital assets trade continuously, with prices available publicly. This raises the question of whether the existing approach is suitable for assets with readily observable market prices.
Cost Can Be Very Different From Market Value
Under the cost model, an intangible asset generally stays at its original cost, adjusted for amortisation and impairment. So if the market price rises significantly, that increase is generally not recognised in the accounts.
Recovery After an Impairment Is Limited
If an asset falls in value and an impairment loss is recognised, a later recovery can result in some or all of that loss being reversed. However, the asset cannot be increased above the amount it would have been worth if the impairment had never happened.
Whether this is worth fixing, and what a fix should look like, is what we are asking.
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