Crypto Financial Reporting Standards: FASB, IFRS, CARF and DAC8 Reporting Explained
Accounting firms advising clients who hold or transact in crypto assets now face a landscape shaped by multiple, overlapping frameworks. The standards are not uniform. A client filing under US GAAP faces different measurement rules than one reporting under IFRS, and neither set of accounting standards exists in isolation from tax-information exchange regimes such as CARF crypto reporting and DAC8 reporting. Getting this right matters. Misclassification, incorrect measurement bases, or missed reporting obligations can expose clients to penalties and auditors to professional liability. This article maps the key frameworks, explains where they align, and highlights the practical differences that affect how firms structure their crypto accounting workflows.
Why a Single Global Standard Does Not Yet Exist
Crypto assets do not fit neatly into the categories that existing accounting standards were built around. They are not cash, not a financial instrument in the classic sense under IFRS 9, and not equity in another entity. This definitional gap has forced standard-setters in different jurisdictions to reach different conclusions, at least for now. The International Accounting Standards Board has an active project on crypto and digital assets, but a finalised standard covering the full range of asset types remains outstanding. In the meantime, firms must apply existing IFRS pronouncements by analogy, most commonly IAS 38 for intangible assets or IAS 2 for inventory, depending on the client's business model.
The United States took a different route. The Financial Accounting Standards Board issued ASC 350-60, which introduced mandatory fair value measurement for certain crypto assets held by entities reporting under US GAAP. Australia's own standard-setter, the AASB, has not issued a dedicated crypto standard either, leaving Australian preparers to work through IFRS-equivalent guidance while monitoring the IASB's ongoing project. The result is a compliance environment where two clients in adjacent offices, one Australian and one US-listed, can hold identical assets and account for them in materially different ways.
FASB ASC 350-60 and Crypto US GAAP Accounting
The FASB's update under ASC 350-60 represents the most significant recent shift in crypto US GAAP accounting. Before this update, entities holding crypto assets under US GAAP were required to apply an indefinite-lived intangible asset model, which meant they could only write assets down when impaired and could not write them back up when prices recovered. The FASB addressed this through a fair value model that requires entities to measure eligible crypto assets at fair value at each reporting date, with changes recognised directly in net income.
The scope of ASC 350-60 is deliberately specific. It applies to assets that meet the definition of a crypto asset under the standard, which broadly means fungible digital assets that are secured through cryptography, reside on a distributed ledger, and do not give the holder a claim on another entity's assets or cash flows. Stablecoins, tokens that represent ownership interests, and wrapped tokens sitting within more complex DeFi structures may fall outside the scope, requiring separate analysis. The table below summarises the key measurement features of ASC 350-60 compared with the IFRS intangible asset approach.
| Feature | FASB ASC 350-60 (US GAAP) | IAS 38 Intangible Asset (IFRS) |
|---|---|---|
| Measurement basis | Fair value at each reporting date | Cost model or revaluation model |
| Gains recognised in income | Yes, unrealised gains included in net income | Only under revaluation model, and only to OCI unless reversing prior impairment |
| Impairment testing | Not required; replaced by fair value remeasurement | Required under IAS 36 where indicators exist |
| Disclosure requirements | Enhanced tabular disclosures by asset type | Standard intangible asset disclosures under IAS 38 |
| Scope exclusions | Wrapped tokens, stablecoins, NFTs excluded | Judgement-based scoping under existing IFRS |
IFRS Crypto Assets: The Current Position and What Is Changing
For firms serving clients in Australia, the UK, the EU, or other IFRS jurisdictions, crypto ifrs accounting currently requires careful judgement at every step. The IASB's existing standards were not written with digital assets in mind, which means the applicable standard depends entirely on the nature of the asset and the holder's purpose. An entity that holds crypto assets for sale in the ordinary course of business, such as a crypto exchange or a treasury function actively trading positions, will typically account for holdings under IAS 2 Inventories, measuring at the lower of cost and net realisable value or, for broker-traders, at fair value less costs to sell.
Most other holders apply IAS 38, treating crypto assets as intangible assets with an indefinite useful life. The cost model under IAS 38 means that gains are not recognised until disposal, and impairment losses must be recognised when the recoverable amount falls below carrying value. This asymmetry has been widely criticised, since it produces financial statements that can show a large impairment in a down market but no corresponding upside when prices recover. The IASB is aware of this tension. Its work programme includes a project specifically focused on whether a fair value model should be available or required for crypto assets under IFRS, but firms should not assume the outcome or timeline.
Staking rewards, airdrops, and DeFi yields introduce additional complexity under ifrs crypto assets guidance. There is no definitive IFRS pronouncement on when staking rewards should be recognised or how they should be measured on receipt. Firms are currently applying judgement, often by analogy with IAS 18 or IFRS 15 principles, and should document their accounting policy choices carefully to support audit-readiness.
CARF Crypto Reporting: The OECD's Information Exchange Framework
The Crypto-Asset Reporting Framework, known as CARF, is an OECD initiative designed to bring crypto asset transactions into the same automatic information exchange regime that governs traditional financial accounts under the Common Reporting Standard. Under CARF crypto reporting, crypto-asset service providers are required to collect due diligence information on their users and report specified transaction data to their local tax authority, which then exchanges that data with the tax authorities in the users' home jurisdictions.
Australia has committed to implementing CARF and is working toward exchange relationships with partner jurisdictions. The practical effect for accounting firms is significant. Clients who assumed that offshore crypto exchange activity was invisible to the ATO will increasingly find that transaction data is available to tax authorities through automatic exchange. Firms need to be proactive in reviewing client holdings, identifying any undisclosed positions, and advising on voluntary disclosure options where necessary. The table below outlines the key data categories that CARF requires reporting entities to collect and report.
| CARF Reporting Category | Data Points Required | Who Must Report |
|---|---|---|
| Exchange transactions (crypto to fiat) | Type of crypto asset, gross amount, number of units, transaction date | Crypto-asset service providers |
| Exchange transactions (crypto to crypto) | Both assets involved, fair value in reporting currency, transaction date | Crypto-asset service providers |
| Transfers | Type of asset, number of units, whether transfer is to an unhosted wallet | Crypto-asset service providers |
| User due diligence | Name, address, date of birth, tax identification number, jurisdiction of residence | Crypto-asset service providers |
DAC8 Reporting and Its Relevance Beyond the EU
DAC8 reporting is the European Union's domestic implementation of the CARF framework, extended and adapted to cover all EU member states. It amends the Directive on Administrative Cooperation to require crypto-asset service providers operating within the EU to report user transaction data to tax authorities, who then share it across member states. DAC8 applies from the 2026 reporting year for most providers, with first exchanges of data following in 2027.
For an Australian firm, DAC8 reporting may seem like a EU-only concern. However, clients with EU exchange accounts, EU-based entities holding crypto, or businesses providing crypto services to EU customers may well fall within scope. Firms should map their client base for EU-connected crypto exposure. The interaction between DAC8, CARF, and existing CRS reporting creates a web of obligations that is becoming increasingly difficult to navigate without purpose-built compliance tooling. Firms that invest in crypto compliance reporting for accounting firms now are better placed to meet these obligations systematically rather than reactively.
It is also worth understanding that DAC8 goes slightly further than the base CARF standard in some respects, including coverage of e-money tokens and certain investment products. The EU's MiCA regulation, which establishes a licensing regime for crypto-asset service providers in the EU, runs alongside DAC8 and creates additional compliance obligations for firms advising EU-facing crypto businesses.
Australian Context: AASB Guidance and Tax Treatment
Australian accounting firms operate under AASB standards, which are substantively equivalent to IFRS as issued by the IASB. This means the practical challenges described above for ifrs crypto assets apply directly to Australian clients. The ATO has published guidance on the tax treatment of crypto assets that differs in important ways from the accounting treatment. For tax purposes, most crypto assets held by Australian individuals and entities are treated as capital gains tax assets, with disposal triggering a CGT event. Entities carrying on a business of trading crypto may instead treat gains and losses as ordinary income.
This divergence between accounting carrying value and tax cost base is a recurring issue in practice. A client holding crypto assets under the IAS 38 cost model will show them at historical cost in the financial statements, but the CGT cost base may differ due to corporate actions, forks, or staking rewards received. Firms must maintain parallel records. The ATO's guidance on the tax treatment of DeFi transactions, staking, and crypto-to-crypto swaps has been updated over time, and staying current with ATO materials is as important as tracking the accounting standards.
Illustrative Scenario
To illustrate how this applies in practice, consider the following scenario:
Priya is a senior manager at a mid-tier accounting firm in Sydney. One of her clients, a technology company with around 80 employees, began holding a significant portion of its treasury in crypto assets two years ago. The company prepares IFRS-equivalent financial statements under AASB standards and is also registered as a crypto-asset service provider in Germany, making it subject to DAC8 reporting obligations from 2026.
Priya's challenge is threefold. She needs to determine the correct accounting treatment for the treasury holdings under IAS 38, prepare disclosures that satisfy the audit committee, and build a process to extract the transaction data required for DAC8 reporting to the German tax authority. The client's finance team has been exporting CSV files from multiple exchanges and manually reconciling them in spreadsheets, a process that creates version control risks and is not scalable as transaction volumes grow.
By implementing CryptaCount, Priya's firm connects directly to the client's exchange accounts and wallets, automates the cost basis tracking required for IAS 38, and generates the structured transaction data needed for DAC8 submissions. The audit trail is complete, the data is consistent across accounting and tax reporting, and Priya can demonstrate to the audit committee that the process is repeatable and controlled.
Frequently Asked Questions
What is DAC8 reporting and who does it apply to?
DAC8 reporting is an EU directive that requires crypto-asset service providers operating in the EU to collect user information and report transaction data to their national tax authority, which then shares that data with other EU member states. It applies from the 2026 reporting year. Providers based outside the EU but serving EU customers may still fall within scope depending on the nature of their operations.
How does FASB ASC 350-60 change crypto US GAAP accounting?
ASC 350-60 replaced the indefinite-lived intangible asset model for eligible crypto assets with a mandatory fair value measurement approach. Entities now recognise changes in fair value directly in net income each reporting period, meaning unrealised gains are recognised for the first time under US GAAP. The standard has specific scope rules that exclude stablecoins, NFTs, and certain tokenised instruments.
How are crypto assets treated under IFRS?
Under current IFRS, most crypto assets are treated as intangible assets under IAS 38, measured at cost or under the revaluation model. Entities that hold crypto for sale in the ordinary course of business may apply IAS 2 instead. The IASB has an ongoing project to develop more specific guidance, but no final standard has been issued yet.
What is CARF crypto reporting and how does it differ from DAC8?
CARF is an OECD framework for automatic exchange of crypto asset transaction data between tax authorities globally, modelled on the Common Reporting Standard. DAC8 is the EU's implementation of CARF, adapted for EU member states and covering some additional asset types. Both require crypto-asset service providers to report transaction data and user identity information, but DAC8 operates within the EU's existing administrative cooperation framework.
Do Australian businesses need to comply with DAC8?
Australian businesses that provide crypto-asset services to EU customers or operate EU-registered entities may fall within the scope of DAC8. Australia is separately implementing CARF, which will require Australian crypto-asset service providers to report to the ATO. Firms should review their client base for EU-connected crypto activity and assess both obligations.
What accounting standard applies to crypto assets in Australia?
Australia applies AASB standards, which are substantively equivalent to IFRS as issued by the IASB. There is no dedicated Australian standard for crypto assets, so preparers apply existing standards by analogy, most commonly AASB 138 (equivalent to IAS 38) for intangible assets. The ATO's tax guidance on crypto assets is separate from the accounting standards and must be tracked independently.
How are staking rewards and DeFi yields accounted for under IFRS?
There is no specific IFRS pronouncement on staking rewards or DeFi yields. Firms apply judgement, often drawing on IFRS 15 or IAS 18 principles, to determine when rewards should be recognised and at what value. The accounting policy chosen must be applied consistently and documented clearly to support audit-readiness, as this remains an area of active debate among preparers and auditors.
What data does CARF require crypto-asset service providers to report?
CARF requires reporting of exchange transactions from crypto to fiat and crypto to crypto, transfers including those to unhosted wallets, and user due diligence information covering name, address, date of birth, tax identification number, and jurisdiction of residence. The framework is designed to give tax authorities visibility over transactions that were previously difficult to trace through traditional financial reporting channels.
How does the tax treatment of crypto assets in Australia differ from the accounting treatment?
For tax purposes, the ATO treats most crypto assets as capital gains tax assets, with disposal triggering a CGT event. The accounting carrying value under IAS 38 is based on cost or revaluation, while the tax cost base can diverge due to staking rewards received, forks, or other corporate actions. Firms must maintain separate records for accounting and tax purposes to manage this divergence accurately.
Can FASB ASC 350-60 accounting treatment be applied by Australian entities?
No. Australian entities preparing financial statements under AASB standards, which are equivalent to IFRS, cannot adopt the FASB ASC 350-60 fair value model. That standard is specific to entities reporting under US GAAP. An Australian company that is also listed in the United States and prepares a US GAAP reconciliation would need to apply ASC 350-60 for that reconciliation, but its primary AASB statements would follow IAS 38 or IAS 2.
Source: CryptaCount
FAQ
DAC8 reporting is an EU directive that requires crypto-asset service providers operating in the EU to collect user information and report transaction data to their national tax authority, which then shares that data with other EU member states. It applies from the 2026 reporting year. Providers based outside the EU but serving EU customers may still fall within scope depending on the nature of their operations.
ASC 350-60 replaced the indefinite-lived intangible asset model for eligible crypto assets with a mandatory fair value measurement approach. Entities now recognise changes in fair value directly in net income each reporting period, meaning unrealised gains are recognised for the first time under US GAAP. The standard has specific scope rules that exclude stablecoins, NFTs, and certain tokenised instruments.
Under current IFRS, most crypto assets are treated as intangible assets under IAS 38, measured at cost or under the revaluation model. Entities that hold crypto for sale in the ordinary course of business may apply IAS 2 instead. The IASB has an ongoing project to develop more specific guidance, but no final standard has been issued yet.
CARF is an OECD framework for automatic exchange of crypto asset transaction data between tax authorities globally, modelled on the Common Reporting Standard. DAC8 is the EU's implementation of CARF, adapted for EU member states and covering some additional asset types. Both require crypto-asset service providers to report transaction data and user identity information, but DAC8 operates within the EU's existing administrative cooperation framework.
Australian businesses that provide crypto-asset services to EU customers or operate EU-registered entities may fall within the scope of DAC8. Australia is separately implementing CARF, which will require Australian crypto-asset service providers to report to the ATO. Firms should review their client base for EU-connected crypto activity and assess both obligations.
Australia applies AASB standards, which are substantively equivalent to IFRS as issued by the IASB. There is no dedicated Australian standard for crypto assets, so preparers apply existing standards by analogy, most commonly AASB 138 (equivalent to IAS 38) for intangible assets. The ATO's tax guidance on crypto assets is separate from the accounting standards and must be tracked independently.
There is no specific IFRS pronouncement on staking rewards or DeFi yields. Firms apply judgement, often drawing on IFRS 15 or IAS 18 principles, to determine when rewards should be recognised and at what value. The accounting policy chosen must be applied consistently and documented clearly to support audit-readiness, as this remains an area of active debate among preparers and auditors.
CARF requires reporting of exchange transactions from crypto to fiat and crypto to crypto, transfers including those to unhosted wallets, and user due diligence information covering name, address, date of birth, tax identification number, and jurisdiction of residence. The framework is designed to give tax authorities visibility over transactions that were previously difficult to trace through traditional financial reporting channels.
For tax purposes, the ATO treats most crypto assets as capital gains tax assets, with disposal triggering a CGT event. The accounting carrying value under IAS 38 is based on cost or revaluation, while the tax cost base can diverge due to staking rewards received, forks, or other corporate actions. Firms must maintain separate records for accounting and tax purposes to manage this divergence accurately.
No. Australian entities preparing financial statements under AASB standards, which are equivalent to IFRS, cannot adopt the FASB ASC 350-60 fair value model. That standard is specific to entities reporting under US GAAP. An Australian company that is also listed in the United States and prepares a US GAAP reconciliation would need to apply ASC 350-60 for that reconciliation, but its primary AASB statements would follow IAS 38 or IAS 2.