From Intangible to Digital Monetary Assets: Bridging the Gap in Cryptocurrency Financial Reporting

Jaya Kumar Shanmugam, Roshima Haji Said, Leily Adja Radjeman, Norasmila Awang, Farah Amalin Mohd Noor and Karthikeyan Lokanathan
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Jaya Kumar Shanmugam: Faculty of Accountancy, University Technology MARA, Cawangan Kedah, Kampus Sungai Petani, Kedah, Malaysia
Roshima Haji Said: Faculty of Accountancy, University Technology MARA, Cawangan Kedah, Kampus Sungai Petani, Kedah, Malaysia
Leily Adja Radjeman: Faculty of Accountancy, University Technology MARA, Cawangan Kedah, Kampus Sungai Petani, Kedah, Malaysia
Norasmila Awang: Faculty of Accountancy, University Technology MARA, Cawangan Kedah, Kampus Sungai Petani, Kedah, Malaysia
Farah Amalin Mohd Noor: Faculty of Accountancy, University Technology MARA, Cawangan Kedah, Kampus Sungai Petani, Kedah, Malaysia
Karthikeyan Lokanathan: PSG Institute of Management, Coimbatore, India

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 8, 3996-4006

Abstract: The treatment of cryptocurrencies presents a significant challenge within consolidated financial reporting frameworks. Traditional models under IFRS and U.S. GAAP primarily classify cryptocurrencies as intangible assets or inventories, which fail to capture the unique characteristics and extreme volatility of digital assets. Recent developments, such as the FASB’s move toward fair value measurement, mark a pivotal shift toward more relevant and faithful financial reporting. This study adopts a narrative review methodology to investigate current practices, challenges, and emerging solutions in accounting for cryptocurrencies under consolidated reporting standards. By applying fair value accounting theory, stakeholder theory, and agency theory to cryptocurrency, the research critically analyzes how existing frameworks affect transparency, comparability, and decision-usefulness in financial reporting. These findings also highlight significant inconsistencies across jurisdictions, underscore the need for a new asset classification such as "digital monetary assets," and call for harmonized international standards. This study contributes valuable insights for policymakers, accounting practitioners, and scholars aiming to advance the reliability and relevance of cryptocurrency financial reporting.

Date: 2025
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