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Abstract 

Crypto tokens are increasingly being held and used by firms to complete transactions without a central authority acting as a mediator. However, global accounting standards set by IASB provide preparers of financial data with limited guidance about the appropriate accounting treatment of crypto tokens, causing a lack of consensus among accountants and posing implications for the users of financial information. The authors explore the issues of accounting crypto tokens for the users of IFRS-compliant financial information by using an archival study of reports and qualitative interviews.

The authors discovered that the different properties of tokens make it challenging to set  standard ways of accounting for them. The lack of standard-setting activity results in an uncertain scope of guidance and thereby differing accounting practices among practitioners which spill over and affect the users. The issues from the current practices and the “relevance vs. understandability” trade-off, tie back to how well users are able to adapt the information to their own purposes and understandings. Due to the volatile nature of the tokens, the relevance and reliability of token treatment are interdependent. Users with lower levels of knowledge are prone to consider financial information as less relevant if they experience high uncertainty when analyzing the information.