Accounting for crypto assets and their presentation in financial statements: A theoretical approach to classification as other current assets

The increasing use of crypto assets has raised a significant question regarding how they should be accounted for and presented in financial statements, an issue for which existing accounting standards provide no explicit guidance. This study determines the appropriate classification of crypto assets through a conceptual and normative analysis, examining relevant International Accounting Standards (IAS) alongside classical and contemporary monetary theory. The analysis argues that crypto assets do not adequately satisfy the relevant criteria for classification as cash and cash equivalents, Property, Plant and Equipment, Intangible Assets, or Inventories, based on an examination of the specific recognition and classification requirements applicable to each asset category. Building on this systematic elimination and a review of the literature—in which crypto assets are predominantly discussed in relation to intangible assets or inventory—the study proposes that crypto assets be classified under the Other Current Assets account group, with a new account designated specifically for their recognition. Illustrative journal entries are presented for acquisition and disposal, together with a mechanism for recognizing unrealized decreases in value while the asset is held—even absent a sale—through a dedicated provision account reversed upon recovery up to original cost. By offering a concrete, standards-based classification and valuation framework, the study contributes a novel alternative to the ongoing debate on the accounting treatment of crypto assets.