As cryptoassets become increasingly common in commercial transactions and investment portfolios, companies must understand how to account for them appropriately under Singapore Financial Reporting Standards (International) [SFRS(I)]. Unlike traditional assets, cryptoassets do not fall neatly into existing categories such as cash, cash equivalents, or financial instruments, and therefore require careful classification based on their characteristics and intended use.
Classification of Cryptoassets
Cryptoassets generally fall into four broad categories:
Cryptocurrencies – Digital currencies used as a medium of exchange or store of value.
Utility Tokens – Tokens granting access to specific services, platforms, or products.
Asset Tokens – Tokens representing ownership or rights to underlying physical or financial assets.
Security Tokens – Tokens that mirror the economic rights of traditional securities such as equity or debt.
The accounting treatment depends on which category the asset falls into.
Accounting Treatment
Cryptocurrencies
If held for trading, they may be classified as inventory under SFRS(I) 2.
Otherwise, they typically meet the definition of intangible assets under SFRS(I) 1-38.
Utility Tokens
Depending on the holder’s purpose, they may be accounted for as inventory, intangible assets, prepayments, or financial instruments.
Asset Tokens
Accounting follows the standard relevant to the underlying asset the token represents.
Security Tokens
When they meet the definition of a financial asset, they fall under the scope of SFRS(I) 9 Financial Instruments.
Key Considerations for Businesses
Companies must evaluate cryptoassets based on their substance and economic reality, rather than solely their legal form. This assessment determines whether the asset represents a right to goods, services, cash flows, ownership interests, or simply an intangible digital resource. Because cryptoassets do not fit into one uniform accounting model, professional judgment and consistent application of relevant standards are essential.