Cryptocurrency holdings are neither cash nor financial assets, but meet the definition of an intangible asset, at least according to an influential global accounting standards body.

The Korea Times said in a report on Monday that according to the Korea Accounting Institute, the International Financial Reporting Interpretations Committee (IFRIC) made such decisions after a meeting in London in June.

Indeed, the London-based IFRIC, which sets the International Financial Reporting Standard (IFRS), concluded in a little-noticed document dated June 21 that holdings of cryptocurrency meet the definition of an intangible asset, on the grounds that “(a) it is capable of being separated from the holder and sold or transferred individually; and (b) it does not give the holder a right to receive a fixed or determinable number of units of currency.”

Intangible assets are defined by the committee as non-monetary assets without physical substance. It has also concluded that cryptocurrency is not equity and does not give the holder contractual rights of exchange. Importantly, it said crypto is not cash because it is not, for practical purposes, a medium of exchange.

The Committee added that in some cases, cryptocurrency could be accounted for as inventory if an entity “hold cryptocurrencies for sale in the ordinary course of business.”

Stepping back, the treatment of cryptocurrency was not added to the committee’s standard-setting agenda, which means that the recent disclosure only reflects the thinking of the body and not an actual rule.

But once the committee sets a standard, it tends to be followed, as IFRS is used in about 144 jurisdictions and is required for public companies in Singapore, South Korea and almost all of Europe, though the U.S. has so far been only using the framework of the generally accepted accounting principles (GAAP).

Accounting treatment for cryptocurrency has been in discussion since about 2016, with numerous talks held and papers submitted. The IFRIC recently received 23 comment letters on the subject from a wide range of interested parties, including the Hong Kong Institute of Certified Public Accountants (HKICPA), The Indonesian Financial Accounting Standards Board, the Korea Accounting Standards Board (KASB) and the Accounting Standards Board of Japan (ASBJ).

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