UK company bitcoin accounting under FRS 102 and FRS 105

If a small UK company holds bitcoin and reports as a micro-entity, the accounting question usually comes down to FRS 105. This page summarises what our accounting and tax notes say, and what to take to your accountant. It is general education, not accounting or tax advice.

Which standard applies?

UK companies that do not use IFRS commonly report under FRS 102 or, if they qualify, FRS 105, the standard for the micro-entities regime. Neither standard has requirements written specifically for cryptoassets. That means the treatment is a judgement, and you should confirm it with your own adviser.

FRS 105 means historical cost only

The key point for micro-entities: FRS 105 permits historical cost accounting only. Holdings cannot be revalued to fair value. In practice, the accounts cannot show the holding at its current market value, so the figure in the balance sheet can differ a lot from what the bitcoin is worth today.

Because of that, the treasury policy guide suggests the policy can still ask for fair value alongside cost in internal reviews, whichever basis the accounts use. Directors then see both the accounting number and the current value when they review the position.

FRS 102: what the standard says

FRS 102 does not mention cryptoassets, so which section applies is a judgement for the company and its accountant. The paragraphs below are from the September 2024 edition of FRS 102, which includes the Periodic Review 2024 amendments. Most of those amendments apply to "accounting periods beginning on or after 1 January 2026, with early application permitted" (paragraph 1.37).

If bitcoin is treated as an intangible asset (Section 18). FRS 102 defines an intangible asset as "an identifiable non-monetary asset without physical substance". After initial recognition, a company uses either the cost model or the revaluation model (18.18):

• Cost model: cost less accumulated amortisation and impairment losses (18.18A).
• Revaluation model: fair value at the date of revaluation, less later amortisation and impairment, but only if fair value can be determined by reference to an active market (18.18B). It applies to the whole class of asset (18.18), revaluations must be regular enough that the carrying amount does not differ materially from fair value at the reporting date (18.18D), and an asset cannot first be recognised at anything other than cost (18.18C).
• Where revaluation gains and losses go: an increase goes to other comprehensive income and is held in equity, except to the extent 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 excess goes to profit or loss (18.18H).
• Amortisation and impairment: FRS 102 treats every intangible asset as having a finite useful life (18.19). If a reliable estimate is impossible, the life cannot exceed 10 years (18.20). Residual value is assumed to be zero unless, among other things, there is an active market that is likely to exist at the end of the useful life (18.23). Impairment follows Section 27 (18.25).

FRS 102 defines an active market as "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". Whether a bitcoin market meets that test, and what useful life and residual value to use, are judgements for your accountant. We do not suggest an answer.

If bitcoin is held for sale in the ordinary course of business (Section 13). FRS 102 defines inventories as assets held for sale in the ordinary course of business, among other things. Inventories are measured at "the lower of cost and estimated selling price less costs to complete and sell" (13.4). Fair value less costs to sell through profit or loss is allowed only where it is "a more relevant measure of the entity's performance because the entity operates in an active market where sale can be achieved at published prices, and 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.

For more on FRS 102, including impairment, disclosures, distributable profits and what changed from 1 January 2026, read UK company bitcoin accounting under FRS 102.

What to take to your accountant: which section applies, whether the cost or revaluation model is used, the useful life and residual value, the price source and time stamp for any revaluation or impairment test, and how the holding is presented and disclosed.

How this compares with other frameworks

• FRS 102: no cryptoasset-specific requirements either, but it does allow a revaluation model for intangible assets with an active market (see above). The choice is a judgement to confirm with your adviser.
• IFRS: the IFRS Interpretations Committee concluded in June 2019 that IAS 2 applies to cryptocurrencies held for sale in the ordinary course of business, and IAS 38 applies otherwise.
• US GAAP: for comparison, ASU 2023-08 measures in-scope crypto assets at fair value with changes in net income. See US company bitcoin accounting under ASU 2023-08.

Tax is a separate question

Accounting and tax follow different rules. HMRC does not treat cryptoassets as money or currency. For a company, profits and gains on exchange tokens such as bitcoin fall within Corporation Tax under the trading, loan relationship, intangible fixed asset or chargeable gains rules, depending on its activities and accounting (CRYPTO41000). A company holding tokens as an investment pays Corporation Tax on gains when it disposes of them (CRYPTO41200).

Records matter. Values are converted to pounds sterling at the time of each transaction using a consistent method, and the method is recorded (CRYPTO40100).

Reporting by providers from 2026

From 1 January 2026, UK cryptoasset service providers collect user and transaction data under the Cryptoasset Reporting Framework. A UK company using a provider must give its legal name, main address and company registration number, and some companies must also give details of their controlling persons. Inaccurate or missing details can lead to a penalty of up to £300.

Funds and notes are different

These notes are for bitcoin held directly. A crypto exchange-traded note is a financial instrument, and HMRC treats cETNs as debt securities, so the accounting and tax follow the instrument (exchange-traded products).

Before you choose a cap

The accounting basis changes how a given allocation looks in reported profit, so discuss the accounting effect with your accountant before choosing a cap. The sizing calculator shows the allocation a cap allows, and the policy generator adds UK accounting, tax and records clauses for your advisers to review.

Sources

Primary sources only. Each link was checked on 21 October 2026. Rules change, so confirm the current version with your adviser.

1. FRCFRS 105: The Financial Reporting Standard applicable to the Micro-entities Regime
2. FRCFRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland
3. IFRS FoundationIFRS Interpretations Committee agenda decision: Holdings of Cryptocurrencies (June 2019)
4. IFRS FoundationIAS 38 Intangible Assets
5. FASBASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60)
6. HMRCCRYPTO40100: Conversion to sterling and accountancy
7. HMRCCRYPTO41000: Corporation Tax, contents
8. HMRCCRYPTO41200: Corporation Tax on chargeable gains, introduction
9. HMRCInformation you need to give to UK cryptoasset service providers
10. HMRCTax treatment of cryptoasset Exchange Traded Notes

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