Cryptocurrencies are increasingly common assets in the balance sheets of Polish businesses. Recognising digital currencies correctly in financial statements requires a detailed analysis of the applicable rules and an understanding of the nature of these innovative assets. Because there is no clear legal regulation in this area, businesses have to interpret the rules themselves and choose the right way to present the cryptocurrencies they hold in the balance sheet.
Definition of cryptocurrencies under Polish law
Cryptocurrencies, also called virtual currencies, are a digital representation of value that works as an alternative to traditional means of payment. Under the definition in the Act on Counteracting Money Laundering and Terrorist Financing (Article 2(2)(26)), to which the PIT (personal income tax) and CIT (corporate income tax) Acts also refer, a virtual currency has specific features that distinguish it from conventional financial instruments. Since 30 December 2024 the MiCA Regulation (EU) 2023/1114 on markets in crypto-assets has applied throughout the European Union, but it does not set rules for recognising cryptocurrencies in the accounting books, and the Polish act on crypto-assets had not been published in the Journal of Laws (Dz.U.) by November 2026. A separate practical issue is exchange differences on cryptocurrency payments for invoices.
A virtual currency is a digital representation of value that is not legal tender issued by the NBP (National Bank of Poland), foreign central banks or other public administration bodies, and that is exchangeable in business transactions for legal tender and accepted as a medium of exchange. It can be stored or transferred electronically and can be the subject of electronic trading
The key point is that cryptocurrencies are not classified as traditional financial instruments within the meaning of the Act on Trading in Financial Instruments. Nor are they electronic money, bills of exchange or cheques. Because of this negative definition, businesses have to look for suitable balance-sheet categories to recognise the digital currencies they hold.
An important feature of cryptocurrencies is that they can be exchanged in business transactions for legal tender and are accepted as a medium of exchange. This means that, despite not being legal tender, cryptocurrencies perform economic functions similar to traditional currencies, which matters for their balance-sheet classification.
Cryptocurrencies as assets under the Accounting Act
An analysis of the Polish Accounting Act leaves no doubt that purchased cryptocurrencies are assets of the business. Under the definition in Article 3 of the Act, assets are resources controlled by the entity, of reliably determined value, resulting from past events, which will in future bring economic benefits to the entity.
Cryptocurrencies meet all the criteria of this definition. The business controls them by holding the cryptographic keys, their value can be reliably determined on the basis of exchange rates, and their purchase is a past business event. In addition, holding cryptocurrencies can generate economic benefits in the form of an increase in value or the possibility of selling them.
Cryptocurrencies are assets of a business because they are controlled by the entity, have a reliably determined value and can generate future economic benefits. They therefore meet all the criteria of the definition of assets in the Accounting Act
The difficulty, however, is deciding which specific balance-sheet category the cryptocurrencies held belong to. The Accounting Act contains no direct rules on digital currencies, so businesses have to make their own interpretations and choose suitable classification methods. Sellers, in turn, face the question of how to issue an invoice in cryptocurrency.
Cryptocurrencies and financial assets – legal analysis
The key question is whether cryptocurrencies can be classified as financial assets within the meaning of the Accounting Act. Under the statutory definition, financial assets include monetary assets, equity instruments issued by other entities and the contractual right to receive monetary assets or to exchange financial instruments with another entity on favourable terms.
The distinction between financial assets and monetary assets is particularly important. Monetary assets are assets in the form of domestic means of payment, foreign currencies and foreign exchange, as well as other financial assets, including accrued interest on financial assets (Article 3(1)(25) of the Accounting Act). If these assets are payable or due within three months of the date they were received, issued, acquired or placed, they are classified as cash for the purposes of the cash flow statement.
Cryptocurrencies do not meet the definition of monetary assets, because they are not domestic means of payment, foreign currencies or foreign exchange within the meaning of the Accounting Act. Nor can they be classified as traditional financial instruments
Given the nature of cryptocurrencies and their negative definition in Polish law, it is hard to classify them as financial assets in the traditional sense. Cryptocurrencies are not issued by central banks, are not financial instruments within the meaning of the relevant acts and do not arise from contracts giving the right to receive monetary assets.
Classifying cryptocurrencies as other investments
Since it is hard to classify cryptocurrencies as financial assets, it seems reasonable to treat them as other investments. Under the definition in the Accounting Act, investments are assets held by the entity to obtain economic benefits from an increase in their value, or to earn income in the form of interest, dividends or other benefits.
Cryptocurrencies are usually bought precisely to obtain economic benefits from an increase in their value or from trading. This makes classification as other investments seem the most appropriate in most cases where businesses hold cryptocurrencies.
Classifying cryptocurrencies as other investments is the most justified approach, because they are usually bought to obtain economic benefits from an increase in value. This approach reflects the economic substance of a business holding digital currencies
This classification has important consequences for how cryptocurrencies are measured and presented in the balance sheet. Under the Accounting Act, investments purchased are recognised in the accounting books on the date of purchase at the acquisition price, or at the purchase price if the costs of carrying out and settling the transaction are not material. Our office can take over keeping the accounting books and preparing the financial statements — more on full accounting.
Methods of measuring cryptocurrencies on disposal
The measurement of cryptocurrencies on disposal is particularly important, especially when the entity holds identical or similar items bought at different prices. In such cases the Accounting Act provides for one of three measurement methods (Article 35(8) in conjunction with Article 34(4)(1)–(3)).
The first method is measurement at average prices, that is, at the weighted average of the prices of the asset. This method is especially useful where cryptocurrencies are bought frequently at different rates, as it averages out the acquisition costs.
- Prepare documentation of all cryptocurrency purchase transactions
- Calculate the weighted average acquisition price of the cryptocurrencies held
- Apply the calculated average to measure cryptocurrency disposals
- Update the weighted average after each new purchase
- Document the method used in the entity's accounting policy
The second method assumes that disposals are measured successively at the prices of the items the entity bought first (the FIFO method). The third method measures disposals at the prices of the items the entity bought most recently (the LIFO method).
The choice of method for measuring cryptocurrency disposals has a significant effect on the entity's financial result, especially in periods of large price swings. The entity should apply the chosen method consistently and document it in its accounting policy
Cryptocurrencies as intangible assets
An alternative approach to classifying cryptocurrencies comes from a view in legal writing that a virtual currency is a property right within the meaning of the Civil Code. Adopting this assumption may lead to classifying cryptocurrencies as intangible assets.
Under the statutory definition, intangible assets are property rights acquired by the entity, classified as non-current assets, suitable for economic use, with an expected useful life of more than one year, and intended for the entity's own use.
| Classification criterion | Other investments | Intangible assets |
|---|---|---|
| Holding period | No limit | Over 12 months |
| Purpose of purchase | Obtaining economic benefits | Use in the business |
| Measurement method | Short-term: market price, or the lower of acquisition price and market price; long-term: acquisition price less impairment losses, or fair value | Acquisition price less depreciation |
| Balance-sheet presentation | Current/non-current assets | Non-current assets |
Classification as intangible assets may be justified where cryptocurrencies are bought for long-term use in the entity's business rather than for investment purposes. However, all criteria of the definition of intangible assets must be met, including an expected useful life of more than one year.
Classifying cryptocurrencies as intangible assets is possible, but it requires specific criteria to be met, including long-term holding and use in the entity's business. This approach entails an obligation to depreciate them
International Accounting Standards and cryptocurrencies
As the Polish Accounting Act has no clear rules on this, entities may refer to the International Accounting Standards (IAS). Under the Act, in matters not regulated by it, entities may apply national accounting standards and, where there is no relevant national standard, IAS.
In June 2019 the IFRS Interpretations Committee published an agenda decision ("Holdings of Cryptocurrencies", which is not a formal interpretation) on recognising cryptocurrencies in financial statements. According to the Committee, the key factor is the purpose for which the entity holds the cryptocurrencies, and in other cases cryptocurrencies are accounted for under IAS 38 "Intangible Assets".
Where an entity holds cryptocurrency for sale in the ordinary course of business, IAS 2 "Inventories" applies to these assets. Under this standard, inventories are assets held for sale in the ordinary course of business, which means they are classified as current assets.
The International Accounting Standards provide for classifying cryptocurrencies as inventories when they are held for sale in the ordinary course of business. This approach differs from possible interpretations of the Polish Accounting Act
Under the Polish Accounting Act, current assets are – for tangible assets (Article 3(1)(18)(a)) – the part of the entity's assets intended to be sold or used within twelve months of the balance-sheet date or within the normal operating cycle of the business, if that cycle is longer than twelve months.
Practical aspects of recognising cryptocurrencies in the balance sheet
Applying these rules in practice requires businesses to make a number of accounting policy decisions. The first step is to determine the purpose for which the entity buys and holds cryptocurrencies, which directly affects their balance-sheet classification.
- Analysis of the business goals behind buying cryptocurrencies
- Determination of the expected holding period of the digital currencies
- Choice of the appropriate balance-sheet category based on the analysis
- Choice of the method for measuring cryptocurrency disposals
- Documentation of the adopted solutions in the accounting policy
Entities whose main business is trading in cryptocurrencies should consider classifying them as inventories, in line with the IAS interpretation. Entities buying cryptocurrencies for investment purposes, on the other hand, can classify them as other investments.
Each entity should decide individually how to classify cryptocurrencies, based on an analysis of its business goals and the nature of its activities. Consistent application of the adopted rules is key
Documenting cryptocurrency transactions is also important. Entities should keep detailed records of all purchases and disposals, together with documentation of exchange rates and transaction costs.
Measuring cryptocurrencies at the balance-sheet date
Whatever balance-sheet classification is adopted, entities must measure the cryptocurrencies they hold at the balance-sheet date. The prudence principle and the requirement to give a true and fair view of the entity's assets and financial position are key here.
Where cryptocurrencies are classified as other investments, the measurement rules depend on whether they are short-term or long-term investments. Short-term investments are measured at market price, or at the lower of two values: acquisition price or market price (Article 28(1)(5)), and a decrease in their value is recognised in finance costs (Article 35(3)). Long-term investments are measured at acquisition price less impairment losses, or at fair value (Article 28(1)(3)), and the impairment loss is recognised no later than at the end of the reporting period (Article 35(2)). Large swings in cryptocurrency prices may require particular attention here. At the balance sheet date it is not only assets that are measured — the rules for liabilities are described in our post on the valuation of liabilities in the balance sheet.
Practical example: In January a business bought Bitcoin for PLN 200,000. At the balance-sheet date the market value of the Bitcoin is PLN 150,000. If the Bitcoin is a short-term investment, the difference of PLN 50,000 is charged to finance costs. If it is a long-term investment measured at acquisition price, the entity must consider whether the decrease in value is permanent or the result of temporary market fluctuations, which will affect the decision to recognise an impairment loss.
For cryptocurrencies classified as intangible assets, the entity should set the depreciation period and method. As cryptocurrencies do not wear out physically, depreciation should reflect the economic consumption of their value over time.
Measuring cryptocurrencies at the balance-sheet date requires particular attention because of their high volatility. Entities should regularly monitor the market value of the cryptocurrencies they hold and assess the need for impairment losses
Disclosures in the financial statements
A business that holds cryptocurrencies must make appropriate disclosures in its financial statements. The scope of disclosures depends on how material the cryptocurrencies are to the entity's assets and financial position and on the balance-sheet classification adopted.
For material amounts, the entity should disclose, in the additional information and notes, the rules it has adopted for classifying and measuring cryptocurrencies. It is particularly important to present the risks of holding digital currencies, including price volatility risk and technology risk.
Entities should also disclose the methods used to measure cryptocurrency disposals and any significant events affecting their value during the reporting period. Significant purchases or disposals of cryptocurrencies may require separate discussion.
