The International Financial Reporting Interpretations Committee (IFRIC) defines Bitcoin (BTC) as an intangible asset and not a legal tender.
IFRIC is associated with the International Financial Reporting Standards (IFRS) Foundation under the International Accounting Standards Board (IASB).
The report mentions that cryptocurrencies are “not cash nor an equity instrument of another entity” but “intangible assets” defined as “identifiable non-monetary assets without physical substance”.
According to IFRIC, an asset is “identifiable if it is separable or arises from contractual or other legal rights.”
Here separable in an asset signifies:-
“capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability”
<img width="1024" height="576" src="https://www.cryptonewspoint.com/wp-content/uploads/2019/09/ifric-23-tax-uncertainties.img_-1024x576.jpg" alt="" class="wp-image-1893 lazyload" />
IFRIC develops a single set of accounting standards which is applicable in over 140 jurisdictions.
Korea Times noted that IFRIC position to cryptocurrencies will “enable governments to establish a legal basis for taxation and businesses to sketch out frameworks for corporate accounting.”
However, it can be a setback for cryptocurrencies as a prospective currency.