Cryptocurrencies are not money, nor are they financial assets, but they are considered to be intangible assets. This is stated by the KAI (Korea Accounting Institute), an important Korean accounting body. The KAI is in line with the decision of the IFRIC (International Financial Reporting Interpretations Committee), which adopted this position on cryptocurrencies on June 21st after a meeting held in London.
To confirm what the KAI has stated, a document has been published on the official website of the IFRIC which confirms this statement by the Korean body.
The IFRIC is associated with the International Financial Reporting Standards (IFRS), a non-profit organisation that is responsible for establishing global accounting rules and principles. This decision is definitely negative for the crypto world because it puts a further brake on recognising cryptocurrencies as legitimate currencies.
Cryptocurrencies downgraded by IFRIC
Cryptocurrencies are considered by the committee as non-monetary assets. They also concluded that cryptocurrencies cannot be considered as equities and do not give the holder contractual rights of exchange. The institution stated that cryptocurrencies are not money because they cannot be considered a means of exchange for practical purposes. The IFRIC based its decision on the laws of the IASB (International Accounting Standards Board).
It must be said that this is only the approach of the IFRIC and not an internationally recognised law, although when this committee makes a decision it is usually highly regarded throughout the world. The IFRS is recognised in over 140 jurisdictions.
Such a decision regarding cryptocurrencies has been under discussion since 2016 and opinions differ from country to country. The IFRIC has received 23 letters in this regard from a large number of interested parties such as 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).