This week in Eastern Standard Time, the Hong Kong Institute of Certified Public Accountants (HKICPA) has externally confirmed that it will establish a set of guidelines for the accounting treatment of virtual assets, which will be rolled out in three phases: the first part has already been released, the second part is expected to be launched in about six months, and the third part aims to be completed by the end of 2026 (the aforementioned timelines come from a single public report). This framework attempts to address the long-standing contradiction between the rapid expansion in the scale and complexity of cryptocurrency assets in recent years and the lagging, divergent traditional accounting standards. For cryptocurrency financial institutions and listed companies that view Hong Kong as a testing ground, clearer accounting rules not only affect the appearance of the balance sheet but also directly influence the comparability of financial statements, valuation logic, and compliance costs. Therefore, the market has high hopes for this set of guidelines, seeing it as a key step towards standardization and transparency in Hong Kong's cryptocurrency financial ecosystem.
Distortion in Traditional Financial Reports: Cryptocurrency Assets in a Compliance Gray Area
● Confusion in Report Classification: Currently, when enterprises hold various tokens, they often swing between multiple categories such as intangible assets, inventories, financial assets, and in terms of measurement, some adopt cost impairment, while others prefer fair value changes, with impairment testing and re-evaluation occurring at different paces. This lack of a unified approach makes it difficult for financial reports from different companies, or even different entities within the same group, to be compared horizontally, and investors and analysts often have to rely on verbal explanations from management to piece together the true risk exposure.
● The Dilemma of an International Financial Center: Hong Kong is a significant global financial hub on one hand, and on the other, it is an active area of cryptocurrency with high concentrations of trading, custody, and project operations. However, the accounting treatment has long been in a “everyone has their own explanation” state. When regulatory bodies, auditors, and listed companies face complex products, differing interpretations can directly lead to compliance uncertainties and disputes during audits. This structural ambiguity creates tension with Hong Kong's emphasis on regulatory clarity and predictable rules and amplifies the trust costs associated with cross-border regulatory cooperation and capital inflows.
● Tension at the Audit Frontline: On a practical level, auditors and company finance teams repeatedly negotiate around issues such as whether token holdings should be impaired as intangible assets, whether fair value measurement can be used, and how risks associated with on-chain pledges or custody arrangements should be disclosed. Licensed institutions are required to report risk exposures to regulators, but lack of a unified accounting standard leads listed companies to worry that aggressive accounting may trigger inquiries, while conservative treatment could be interpreted by the market as hiding value. These specific conflicting scenarios accumulate, creating real pressure for the new guidelines to be “implemented as soon as possible.”
Three-Step Timeline: From Released to 2026 End Exploration
● Phased Roadmap: According to public reports, HKICPA has launched the first part of the virtual asset accounting guidelines and plans to issue the second part within about six months, with the ultimate goal of completing the third part by the end of 2026, forming a relatively complete framework. It is important to emphasize that this timeline mainly stems from a single publicly available information source, representing a planning statement rather than a legally binding commitment, so it is necessary to recognize the potential for adjustments when citing these milestones.
● From One-Time Implementation to Segmented Execution: As early as September 2025, relevant parties had previously announced that a complete virtual asset accounting guideline system would be launched in the first half of 2026. However, the latest statement has shifted to a rhythm of “release part first, then gradually complete it.” This shift from concentrated enactment to phased release reflects the increased complexity perceived by the creators in practice—this includes rapid iterations of technology and business models as well as realistic feedback from discussions with regulators and the industry.
● Considerations Behind the Rhythm Adjustment: Choosing a phased release approach helps to first reach an industry consensus on fundamental issues, then adjust subsequent chapters based on implementation feedback, reducing the likelihood of making systemic errors all at once. Additionally, it allows for a time window for coordination with regulatory agencies and observation of international convergence trends. Given that the specific release dates and contents of the second and third parts still hold significant uncertainty, market participants should interpret the timeline more as a “guidance path” rather than an absolute time commitment.
Confirming Measurement Disclosure: The Accountant's Battle Map
● Three Keywords Corresponding to Three Types of Pain Points: HKICPA summarizes the goals of this round of guidelines as providing guidance for companies on “how to recognize, measure, and disclose virtual assets” in financial statements. The recognition aspect addresses which holdings and rights arrangements should appear on the balance sheet and what accounting characteristics to adopt; the measurement aspect focuses on whether to use cost impairment, fair value, or a hybrid model, and how to respond to extreme price fluctuations; the disclosure aspect aims to make investors and regulators clearly see the company’s risk exposures across different platforms, wallets, and business lines rather than being obscured by generic categories.
● Broad Coverage of Tokens and “Anchor Assets”: Based on existing public information, this set of guidelines is expected to cover commonly referred transaction tokens and so-called tokenized tools that anchor fiat currencies or assets, providing a principled framework for their accounting treatment and auditing requirements. However, in the absence of formal texts, the outside world cannot and should not speculate on what classification methods or specific technical terms will ultimately be adopted; it can only confirm that the goal is to provide actionable benchmarks for various types of digital assets, rather than remaining at the level of abstract principled declarations.
● From “Testing the Water” to Having Guidelines: In recent years, corporate finance departments and auditing institutions often relied on internal position papers, stitching together international cases, and case-by-case communications with regulators to “create their own standards” when handling on-chain assets. Each significant accounting judgment carries potential compliance and reputational risks. Once unified industry guidelines are established, they will provide a framework and reference within a foreseeable range for these judgments, reducing the space for individual “knee-jerk decisions” and concentrating risks more on the boundaries of professional judgment rather than on whether basic rules are accepted.
Dancing with Regulators: The Puzzle of Hong Kong's New Cryptocurrency Order
● A Missing Corner in the Regulatory Landscape: From a macro perspective, the virtual asset accounting guidelines are not standalone documents but one of the key pieces in Hong Kong's overall digital asset regulatory framework. At the front end, there are licensing, suitability assessments, and investor protection; in the mid-range, there are risk management and capital requirements, while accounting and auditing standards bridge the on-chain exposures to measurable, regulated numbers. Without this link, no matter how detailed the rules are, they will be difficult to implement in the balance sheets and regulatory reports.
● High-Level Statement of “Maintaining Consensus” with the Monetary Authority: Public reports mention that this guideline system needs to maintain consensus with regulatory bodies such as the Hong Kong Monetary Authority during its design process to avoid fundamental discrepancies between accounting perspectives and prudent regulatory views. However, there has currently been no detailed public information about the specific technical discussions between the two parties, their points of divergence, and even internal advancement rhythms, which have been marked as areas pending further verification. The outside world can only infer from high-level statements that “consensus must be maintained” that there is likely intensive but undisclosed professional dialogue occurring behind the scenes.
● Accounting Standards and Risk Monitoring Capabilities: Once accounting and auditing standards establish a clear framework for the classification, measurement, and disclosure of virtual assets, regulators will no longer depend on cumbersome supplementary reports and case explanations to assess institutions' risk exposures, capital adequacy, and business robustness. A standardized data expression method provides a comparable basis for stress testing, inter-institutional comparisons, and cross-border regulatory cooperation, and also helps Hong Kong propose more actionable local experiences and technical discourse power in the global digital asset rules competition, rather than merely playing the role of a rules “receiving party.”
Who Will Rewrite the Balance Sheet: A Collective Test for Exchanges and Internet Giants
● Business Models Facing Reconstruction: After the implementation of the future virtual asset accounting guidelines, local and incoming trading platforms, brokers, custodians, and technology and internet companies holding large amounts of token positions may all need to re-evaluate how their balance sheets are presented. For some platforms, the boundaries between client asset custody and their own holdings, as well as the accounting mappings of on-chain income arrangements, may be required to be distinctly separated. For internet companies, positions that were previously broadly categorized as “other assets” or “long-term investments” may be compelled to be disclosed in detail regarding their price volatility and liquidity risks.
● Repricing of Valuation and Profit and Loss Narratives: When the industry is forced to adopt a more unified accounting treatment, fluctuations of crypto-related assets in reports may more intuitively reflect in profit statements and changes in equity, and corporate market values and valuation models will adjust accordingly. The market previously had greater imaginative space for “non-core business” and “long-term layout,” but under the new criteria, the profit and loss rhythms of token positions, impairment logic, and reclassifications will be harder to obscure through narratives, and investor pricing of crypto businesses will shift from “story premiums” to “reporting facts.”
● The Triangular Game Among Accountants, Regulators, and the Market: In this process of rewriting the balance sheet, the accountants' association aims to provide stable coordinates for the industry, regulatory agencies hope to tighten risk thresholds through this, while market participants fear that overly conservative rules will stifle innovation. Hong Kong must find a balance between “controlling systemic risks” and “retaining business flexibility”: if standards are too stringent, companies may migrate elsewhere; if standards are too lax, it will be challenging to sustain international investors' trust premium in Hong Kong. This dynamic of three-party contention will continue to manifest in the rule adjustments and case implementations over the coming years.
Time Window to 2026: The Struggle for Pricing Power in Hong Kong's Cryptocurrency Accounting
● Clear Standards Before Pricing Battles: In conclusion, the Hong Kong Institute of Certified Public Accountants has chosen to advance the virtual asset accounting guidelines in a phased manner, essentially attempting to exchange “first providing executable standards” for “first setting pricing benchmarks” in the global digital asset regulatory race. Whoever defines how to account for assets, how to measure them, and how to disclose risks first will have a greater opportunity to occupy the interpretive and bargaining space in cross-border regulatory coordination and capital flow negotiations, which is also a path that Hong Kong has long excelled in within the traditional finance field.
● Framework Imagination Before 2026: If the current plan can proceed generally according to schedule, by the end of 2026, Hong Kong is expected to form a relatively complete accounting and auditing framework covering multiple types of digital assets, providing foundational material for subsequent regulatory design including on-chain asset mapping and other new tracks. Of course, considering the uncertainty of the timeline itself, the outside world should focus more on the directional aspect—whether Hong Kong continues to integrate virtual assets into the mainstream accounting and regulatory system, rather than fixating on whether a particular milestone is achieved “on schedule.”
● The Key Lies in the Details of Implementation: For investors, institutions, and project parties, the next most important points to closely track are not the slogan-like roadmaps but the formal texts of guidelines at each stage, the interlinkage with regulatory rules, and how these will be concretely implemented in auditing practices. Only when the terms are written into audit working papers, incorporated into regulatory reports, and reflected in valuation models, will this “virtual asset accounting battle” truly enter a phase with clear winners and losers.
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