UK company bitcoin accounting under FRS 102

FRS 102 has no section written for cryptoassets, so a UK company holding bitcoin applies its general sections and makes judgements that its accountant should confirm. This page sets out what the standard says, what is settled and what is a judgement, and what changed for periods beginning on or after 1 January 2026. It is general education, not accounting advice. For the micro-entity standard, see FRS 105 and bitcoin.

Who uses FRS 102

Most UK companies that do not use IFRS report under FRS 102. A small company can use the small entities regime in Section 1A, which reduces the disclosures but keeps the same recognition and measurement rules: "all of the requirements of this FRS apply to a small entity, including the recognition and measurement requirements" (1A.1). A micro-entity can use FRS 105 instead, but FRS 105 allows historical cost only, so a micro-entity that wants to consider the revaluation model would need to report under FRS 102.

What is settled and what is a judgement

FRS 102 lets management look at IFRS dealing with similar issues when it develops a policy (10.6). The IFRS Interpretations Committee concluded in June 2019 that IAS 2 Inventories applies to cryptocurrencies held for sale in the ordinary course of business, and IAS 38 Intangible Assets applies otherwise. That decision is not part of FRS 102, but accountants often refer to it.

Holding bitcoin as an intangible asset

For a company that holds bitcoin in its treasury rather than trading it, ICAEW's view is that it is likely to be an intangible asset. The company recognises it when it obtains control, which ICAEW presumes is when the company can make sell and hold decisions, and measures it first at cost. After that it uses one of two models for the whole class.

The cost model

The holding is carried at cost less accumulated amortisation and accumulated impairment losses (18.18A).

• Amortisation. FRS 102 treats every intangible asset as having a finite useful life (18.19). If, in exceptional cases, a reliable estimate is not possible, the life must not exceed 10 years (18.20). The amount amortised is cost less residual value.
• Residual value. It is assumed to be zero unless, among other things, there is an active market for the asset, residual value can be determined by reference to that market, and it is probable that the market will exist at the end of the useful life (18.23). ICAEW notes that if residual value is estimated to equal or exceed cost, no amortisation is recorded. Whether that applies is a judgement for your accountant.
• Impairment. At each reporting date the company assesses whether there is any indication that the asset may be impaired (27.7). If there is, it estimates the recoverable amount, which is the higher of fair value less costs to sell and value in use (27.11). A loss is recognised if the carrying amount is higher. If the reasons for the loss later cease to apply, the loss is reversed, but not above the carrying amount there would have been with no impairment (27.29, 27.30).

Under the cost model, a rise in the price is not recognised until the bitcoin is sold, while a fall can lead to an impairment charge. Directors reading the accounts should know that the balance sheet figure may be well below the current market value.

The revaluation model

The holding is carried at fair value at the date of revaluation, less later amortisation and impairment, provided that fair value can be determined by reference to an active market (18.18B). The main conditions:

• It applies to all assets in the same class (18.18). The asset must first be recognised at cost (18.18C, 18.18F).
• Revaluations must be regular enough that the carrying amount does not differ materially from fair value at the reporting date (18.18D). ICAEW suggests at least at each period end.
• An increase goes to other comprehensive income and is held in equity, except where it reverses an earlier decrease taken to profit or loss (18.18G). A decrease goes to other comprehensive income up to earlier gains held in equity for that asset, and the rest goes to profit or loss (18.18H).
• If fair value can no longer be found by reference to an active market, the asset stays at its last revalued amount, less later amortisation and impairment (18.18E).

Fair value is measured under Section 2A: the price in an orderly sale between market participants, in the principal market or, if there is none, the most advantageous market (2A.2, 2A.5). The market where the company normally transacts is presumed to be that market unless there is evidence otherwise (2A.6). Transaction costs are not deducted from the price (2A.8). Record which exchange or price source you use and the exact time.

ICAEW describes revaluation of intangible assets as rare in practice. For bitcoin, whether its market has "sufficient frequency and volume to provide pricing information on an ongoing basis" is the key question, and ICAEW says it has to be judged case by case for each cryptoasset. We do not suggest an answer.

Holding bitcoin as inventory

If the company buys and sells bitcoin in the ordinary course of its business, Section 13 may apply. Inventory is measured at "the lower of cost and estimated selling price less costs to complete and sell" (13.4). Fair value less costs to sell, with changes in profit or loss, is allowed only where the company operates in an active market in which sale can be achieved at published prices and the inventory is a store of readily realisable value (13.3). For a company that simply holds bitcoin in its treasury, this route is unlikely to fit. That is our judgement, so confirm it with your accountant.

Selling or losing control

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from it, and the gain or loss goes to profit or loss (18.26). ICAEW says exchange-based tokens are derecognised when the company ceases to control them, generally on disposal. If the company used the revaluation model, ask your accountant how any revaluation gain still held in equity for that asset is treated.

Presentation and disclosure

• Balance sheet heading. ICAEW notes that, depending on why it is held, bitcoin might be shown within intangible fixed assets or within fixed asset investments, and inventory goes within stocks, following the company law formats. Which heading fits is a judgement.
• Section 18 disclosures. For each class: useful lives or rates and why they were chosen, amortisation methods, and a reconciliation of carrying amounts (18.27). A material individual intangible asset is described with its carrying amount and remaining amortisation period (18.28).
• If revalued. The date of revaluation, whether an independent valuer was involved, the methods and significant assumptions, and the carrying amount under the cost model (18.29A).
• Small companies. Section 1A requires fewer disclosures, but the accounts must still give a true and fair view, which may need more (1A.6). Clear notes on the policy and the judgements help readers and auditors.

Distributable profits

A revaluation gain held in equity is not necessarily a realised profit that can be paid out as a dividend. ICAEW points to its technical release on realised and distributable profits and calls this a significant judgement. Take advice before relying on a revaluation gain for a dividend.

What changed from 1 January 2026

The FRC's Periodic Review 2024 amendments apply to "accounting periods beginning on or after 1 January 2026, with early application permitted" if all the amendments are applied together (1.37). For bitcoin, the relevant changes are:

• A new definition of active market. Before: a market in which "the items traded in the market are homogeneous; willing buyers and sellers can normally be found at any time; and prices are available to the public". Now: "a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis". ICAEW comments that this "may still not open up the revaluation model to significantly more preparers".
• A new Section 2A Fair Value Measurement, aligned with IFRS 13, replacing the appendix to Section 2 (Basis for Conclusions B2A.3). It applies prospectively from the date the amendments are first applied (1.41).

We found no FRC project specific to cryptoassets in FRS 102. Separate later amendments, such as the February 2026 changes on adapted formats, do not deal with cryptoassets. Check the FRC page for the current edition before relying on this.

Tax is a separate question

Corporation Tax on bitcoin follows HMRC's rules, which depend on the company's activities and accounting (CRYPTO41000). A company holding tokens as an investment is usually taxed on gains when it disposes of them (CRYPTO41200). See company tax on bitcoin and keep the sterling values and method on record (CRYPTO40100).

Questions to take to your accountant

• Is our bitcoin an intangible asset or inventory, given why we hold it?
• Cost model or revaluation model? If revaluation, how do we show the market is active, and which price source and time do we use?
• What useful life and residual value apply, and is any amortisation charge needed?
• What are the impairment indicators, and how do we test them at each reporting date?
• Which balance sheet heading, and what disclosures, including under Section 1A?
• How do revaluation gains affect distributable profits?
• What records do auditors and HMRC need? See audit evidence and the accountant's corner.

Sources

Primary sources only. Each link was checked on 2 November 2026. Rules change, so confirm the current version with your adviser.

1. FRCFRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland
2. ICAEWAccounting for cryptocurrencies under FRS 102 (helpsheet)
3. ICAEWFRS 102: accounting for exchange-based tokens
4. ICAEWFRS 102 amendments: definition and fair value changes
5. ICAEWCan I revalue an intangible asset under FRS 102?
6. DeloitteNeed to know: Amendments to FRS 102, new Section 2A 'Fair Value Measurement'
7. FRCFRS 105: The Financial Reporting Standard applicable to the Micro-entities Regime
8. IFRS FoundationIFRS Interpretations Committee agenda decision: Holdings of Cryptocurrencies (June 2019)
9. IFRS FoundationIAS 38 Intangible Assets
10. HMRCCRYPTO40100: Conversion to sterling and accountancy
11. HMRCCRYPTO41000: Corporation Tax, contents
12. HMRCCRYPTO41200: Corporation Tax on chargeable gains, introduction

Read the full guides: sizing, custody and treasury policy.