Abstract

Cryptocurrency has emerged as a disruptive innovation in the financial sector, offering decentralized alternatives to traditional fiat currencies. However, its incorporation into financial reporting frameworks remains problematic due to a lack of standardized accounting guidance. This study explores the challenges associated with the financial reporting of digital assets, particularly cryptocurrencies, under existing accounting standards. The study employs a descriptive research design, targeting accountants, auditors, and regulators in Nigeria, and collects data using structured questionnaires. Findings reveal significant classification, valuation, and disclosure issues due to the volatile and unregulated nature of cryptocurrencies. The current practice of classifying cryptocurrencies as intangible assets under IFRS is deemed insufficient by most professionals surveyed. The study recommends the development of dedicated accounting standards for digital assets, enhanced professional training, and regulatory clarity to improve transparency and consistency in financial reporting. This research contributes to the growing body of literature on digital finance and accounting innovation in emerging economies.

Keywords: Cryptocurrency, Financial reporting, IFRS, Digital assets, Accounting standards, Nigeria