Issue 51 (September 2025)
Dear members,Supporting Your Professional Work on Virtual AssetsThe Chief Executive’s 2025 Policy Address reaffirms support for the development offintech in Hong Kong, underscoring the new regime for stablecoin issuers andexploring a wider range of digital asset products and services to professional investors.Aligned with this vision, the Institute is pleased to provide an update on our accountingand auditing initiatives currently underway that support and complement theGovernment’s policy direction.Accounting for Virtual Assets (VA)
The IFRS Interpretation Committee (IFRS IC) issued an agenda decision on ‘Holdingsof Cryptocurrencies’ in June 2019. The IFRS IC concluded that IAS 21 Inventoriesapplies to cryptocurrencies when they are held for sale in the ordinary course ofbusiness; otherwise, IAS 381 Intangible Assets applies.Cryptocurrencies are a subset of cryptoassets. For those cryptoassets that fall outsidethe scope of the June 2019 agenda decision, e.g. certain stablecoins2, the appropriateaccounting would depend on the specific facts and circumstances of each case, giventhe wide variety of VA in the market. Entities should thoroughly review the contractualrights and obligations, applicable laws and regulations, and the specific facts andcircumstances of each case; as well as seek legal and other professional advice asappropriate to determine the appropriate accounting treatment for cryptoassets thatfall outside the scope of the IFRIC agenda decision. This process may requiresignificant judgement and appropriate disclosures should be made in accordance withparagraph 122 of HKAS 1 Presentation of Financial Statements.The Institute is currently developing guidance in this area, with publication scheduledfor H1 2026.Auditing and Assurance on VA-related MattersWith the implementation of the Stablecoins Ordinance in August 2025, licensing from1 HKAS 2 and HKAS 38 are fully converged with IAS 2 and IAS 38.2 Depending on facts and circumstances, certain stablecoins may be outside the scope of the June 2019 agendadecision as they may not meet all of the characteristics of a cryptocurrency as described in the agenda decision.the Hong Kong Monetary Authority (HKMA) is required for anyone who, in the courseof business, issues a stablecoin in Hong Kong, issues a stablecoin referencing theHong Kong dollar (regardless of location), or actively markets such stablecoins to theHong Kong public. The Institute is collaborating with the HKMA to develop guidancefor auditors’ independent attestations on licensed stablecoin issuers, with publicationscheduled for H1 2026.From June 2023, operators of virtual asset trading platforms (VATPs) in Hong Kongmust obtain a license from the Securities and Futures Commission (SFC). As part ofthe licensing process, VATP applicants must engage an auditor to assess theircompliance with applicable SFC requirements. The Institute will engage with the SFCand other relevant parties to assess the need for, and the nature of, any guidance inthis regard.Additionally, to address the complexities of auditing VA-related businesses, theInstitute is preparing a guide for auditors with an expected release date in H1 2026.This resource will highlight common challenges auditors may face in such auditengagements and incorporate relevant guidance from overseas accounting andauditing professional bodies.We hope these initiatives will provide practical support and clarity, empowering you todeliver high-quality work in this rapidly evolving field.Sincere regards,Standard Setting DepartmentHong Kong Institute of Certified Public AccountantsCPA: The Success IngredientConnect with us
Alert 51: Supporting Your Professional Work on Virtual Assets
下载原件Issue 51 (September 2025)
Dear members,Supporting Your Professional Work on Virtual AssetsThe Chief Executive’s 2025 Policy Address reaffirms support for the development offintech in Hong Kong, underscoring the new regime for stablecoin issuers andexploring a wider range of digital asset products and services to professional investors.Aligned with this vision, the Institute is pleased to provide an update on our accountingand auditing initiatives currently underway that support and complement theGovernment’s policy direction.Accounting for Virtual Assets (VA)
The IFRS Interpretation Committee (IFRS IC) issued an agenda decision on ‘Holdingsof Cryptocurrencies’ in June 2019. The IFRS IC concluded that IAS 21 Inventoriesapplies to cryptocurrencies when they are held for sale in the ordinary course ofbusiness; otherwise, IAS 381 Intangible Assets applies.Cryptocurrencies are a subset of cryptoassets. For those cryptoassets that fall outsidethe scope of the June 2019 agenda decision, e.g. certain stablecoins2, the appropriateaccounting would depend on the specific facts and circumstances of each case, giventhe wide variety of VA in the market. Entities should thoroughly review the contractualrights and obligations, applicable laws and regulations, and the specific facts andcircumstances of each case; as well as seek legal and other professional advice asappropriate to determine the appropriate accounting treatment for cryptoassets thatfall outside the scope of the IFRIC agenda decision. This process may requiresignificant judgement and appropriate disclosures should be made in accordance withparagraph 122 of HKAS 1 Presentation of Financial Statements.The Institute is currently developing guidance in this area, with publication scheduledfor H1 2026.Auditing and Assurance on VA-related MattersWith the implementation of the Stablecoins Ordinance in August 2025, licensing from1 HKAS 2 and HKAS 38 are fully converged with IAS 2 and IAS 38.2 Depending on facts and circumstances, certain stablecoins may be outside the scope of the June 2019 agendadecision as they may not meet all of the characteristics of a cryptocurrency as described in the agenda decision.the Hong Kong Monetary Authority (HKMA) is required for anyone who, in the courseof business, issues a stablecoin in Hong Kong, issues a stablecoin referencing theHong Kong dollar (regardless of location), or actively markets such stablecoins to theHong Kong public. The Institute is collaborating with the HKMA to develop guidancefor auditors’ independent attestations on licensed stablecoin issuers, with publicationscheduled for H1 2026.From June 2023, operators of virtual asset trading platforms (VATPs) in Hong Kongmust obtain a license from the Securities and Futures Commission (SFC). As part ofthe licensing process, VATP applicants must engage an auditor to assess theircompliance with applicable SFC requirements. The Institute will engage with the SFCand other relevant parties to assess the need for, and the nature of, any guidance inthis regard.Additionally, to address the complexities of auditing VA-related businesses, theInstitute is preparing a guide for auditors with an expected release date in H1 2026.This resource will highlight common challenges auditors may face in such auditengagements and incorporate relevant guidance from overseas accounting andauditing professional bodies.We hope these initiatives will provide practical support and clarity, empowering you todeliver high-quality work in this rapidly evolving field.Sincere regards,Standard Setting DepartmentHong Kong Institute of Certified Public AccountantsCPA: The Success IngredientConnect with us