Upon the widespread use of crypto assets by businesses, a draft text containing the amendments to be made in the 2021 version of the Financial Reporting Standards for Large and Medium-Sized Enterprises (the “LMSE FRS”) has been prepared within the scope of the project to establish provisions on the accounting and reporting of crypto assets and to add these provisions to the LMSE FRS. On 19 March 2024, it was published on the website of the Public Oversight Accounting and Auditing Standards Authority.

The amendments made in the 2021 version of the LMSE FRS with reference to the regulation issued by the United States Financial Accounting Standards Board on 13 December 2023 on the accounting for crypto assets and footnote disclosures related to crypto assets are as follows:

• Special considerations regarding crypto assets have been added to Section 14 titled Intangible Assets.
• The scope of crypto assets within the scope of the regulation has been determined.
• The initial measurement, impairment, and derecognition of crypto assets shall be governed by the provisions of other relevant sections of Chapter 14, while the subsequent measurement and presentation of crypto assets are regulated separately.
• Crypto assets that are assumed to have an indefinite useful life will not be subject to amortization.
• “Crypto assets measured at fair value within the scope of Intangible Assets” has been added to the assets that are not within the scope of Section 18 titled Impairment of Assets.
• In Section 26, which contains provisions on footnote disclosures, under the heading “Disclosures to be made by All Entities”, the disclosures required to be made regarding the special issues related to the accounting of crypto assets have been added.
• The “Digital Assets” item has been added to the intangible non-current assets group in the Separate Statement of Financial Position and Consolidated Statement of Financial Position.
• The term “Crypto Asset” has been added to the definitions section:

“Intangible assets that are created virtually using distributed ledger technology or similar technology and distributed over digital networks, but are not characterized as fiat money, dematerialized money, electronic money, payment instruments, securities or other capital market instruments.”

The related regulations aim to reduce the uncertainty regarding the recognition and reporting of crypto assets for companies that are subject to independent audit but do not apply Turkish Financial Reporting Standards and whose applicable financial reporting framework is LMSE FRS.