How to Account for Cryptocurrency in the UK: A Simple Guide for Businesses

Why cryptocurrency is tricky to show in your accounts

Cryptocurrency has moved from a niche tech idea to a real payment and investment option for UK businesses, but here is the challenge:

• It is not legal tender in the UK, so you cannot treat it the same as pounds in the bank.
• Prices can change a lot in a short space of time.
• How you use crypto, whether you hold it for investment or sell it regularly, affects how you should show it in your accounts.
• Investors, banks, and auditors now expect businesses to explain clearly how they are handling cryptocurrency in their financial records.

If you get it wrong, you risk misreporting your business position, confusing your stakeholders, and slowing down audits or funding.

A step-by-step guide to accounting for crypto

Here is a simple, step-by-step way to approach cryptocurrency in your accounts under UK accounting rules (FRS 102). We are focusing on how it appears in your accounts, not tax rules.

Step 1: Decide what type of asset it is

In accounting terms, cryptocurrency is not:

• Cash or a cash equivalent, it is not issued by a central bank.
• A financial instrument, there is no contract giving you a right to cash.
• A physical asset, it exists only digitally.

Instead, most businesses treat it as:

• An intangible asset: something you can own, that has value, but you cannot touch (like software or trademarks). This works if you are holding crypto for investment or payments.
• Inventory (stock): if you are buying and selling cryptocurrency as part of your normal business (e.g. a crypto broker).

Step 2: Record it at the right value

When you first get the cryptocurrency, record it at what it was worth in pounds on that date.

After that, you have two main options:

• Cost model:  keep it in the accounts at the value you paid, minus any reduction if the value falls.
• Revaluation model: update the value each time your accounts are prepared, but only if there is a reliable market price you can check.

Step 3: Allow for changes in value

As crypto prices move quickly, you need to review its value regularly.

• If you cannot work out how long you will hold it for, UK rules say use a maximum life of 10 years for your records.
• If the value drops, you may need to reduce it in your accounts (this is called an “impairment”).
• If the value goes back up, you can sometimes reverse that reduction, but only under certain rules.

Step 4: If it is inventory

If you are trading crypto like stock:

• Show it in the accounts at the lower of what you paid for it or what you could sell it for now.
• If there is a very active market, you can use the market value minus any selling costs.

Step 5: Be clear in your notes

Your financial statements should explain:

• Why you chose to treat crypto as intangible or as inventory.
• How you decided on the value and any assumptions you made.
• Any big price changes after year-end that might matter to investors.

Step 6: Practical tips to get it right

• Keep a record of every crypto transaction, including the pound value at the time.
• Review your classification each year, especially if your use of crypto changes.
• Speak to your auditors early if crypto is becoming a big part of your assets.
• Write down your accounting policy so everyone is on the same page.
• Keep an eye on market prices, they can affect your accounts quickly.
• Use Crypto approved software like Recap.io

Why getting this right matters for your business

Getting this right is not just about ticking compliance boxes. It helps you:

• Show investors and lenders you manage risk well.
• Make audits smoother and faster.
• Understand the real value of your business assets.
• Protect your credibility when discussing your accounts with stakeholders.

With cryptocurrency under more scrutiny in 2025, clear and consistent accounting is essential.

Get in touch

If you hold or trade cryptocurrency, clear accounting will protect your business and build trust with your stakeholders.

Speak to our team at Wright Vigar to set up a straightforward, compliant accounting approach for your digital assets, so your balance sheet always tells the right story.