HKFRS 13 · Hong Kong
Crypto and digital asset valuation
Independent fair value assessments for tokens, security tokens, tokenised assets and digital contracts — for audit, fund reporting and corporate financial statements.
Why digital assets need specialist treatment
Digital assets are difficult to value not because prices are unavailable, but because prices are available from too many places and are not always the right input. HKFRS 13 requires fair value to be measured using the price in the principal market, or in its absence the most advantageous market, for the asset. For a token trading across venues with different depth, different fee structures, different regulatory status and, at times, materially different prices, identifying the principal market is a real analytical question rather than a formality.
Hong Kong's regulatory position on virtual assets has developed substantially, and the treatment of these assets in financial statements attracts audit attention accordingly.
What we value
- Liquid tokens held by corporates, funds and treasury operations
- Illiquid, locked or vesting tokens where an observable price does not reflect what the holder can realise
- Security tokens and tokenised interests in real assets, funds or debt instruments
- Tokenisation structures, including the underlying asset and the rights attaching to the token
- Digital asset derivatives and structured contracts
- Holdings in digital asset businesses — exchanges, custodians, mining operations and protocol companies
- Pre-launch or pre-listing tokens with no trading history
Measurement issues that arise repeatedly
| Issue | How it is addressed |
|---|---|
| Principal market | Assessed on volume, accessibility to the entity, and regulatory status of the venue — then applied consistently across periods |
| Lock-ups and vesting | An observable price for freely tradeable tokens does not apply directly to tokens the holder cannot sell; a discount for lack of marketability is assessed, often using option-based methods |
| Thin liquidity relative to position | Where the holding is large relative to daily volume, the measurement considers whether the quoted price is realisable at that scale |
| Valuation timestamp | Markets trade continuously, so the report specifies the exact time and source convention used at the measurement date |
| No trading history | Valued by reference to the underlying rights and economics — the protocol's cash flows, the asset backing a tokenised interest, or comparable token transactions |
| Custody and control | Whether the entity controls the asset affects recognition before measurement even arises |
Classification comes before valuation. Crypto assets are generally not cash or financial assets under IFRS. Depending on the entity's business model and the asset's characteristics, holdings are often accounted for as intangible assets, or as inventory where held for sale in the ordinary course by a broker-trader. The classification determines the measurement basis — and whether fair value is even used. We raise this at scoping because it changes what the engagement needs to produce.
Tokenised and security tokens
Where a token represents an interest in an underlying asset — a property, a fund interest, a bond, a revenue stream — the valuation works from the underlying asset and the contractual rights the token confers, rather than from token market data alone. The gap between the two is often where the value question actually sits: a token can trade at a material discount or premium to the assets it represents, and understanding which is being measured is essential.
Common questions
Our tokens trade on several exchanges at different prices. Which do we use?
HKFRS 13 points to the price in the principal market — the market with the greatest volume and activity for the asset that the entity can access. If no principal market can be identified, the most advantageous market is used. The assessment considers volume, whether the entity actually has access to the venue, and the venue's regulatory standing, and the same basis is applied consistently across reporting periods.
How do you value tokens subject to a lock-up?
The starting point is the observable price for freely tradeable tokens, adjusted for the restriction. The size of the discount reflects the length of the remaining lock-up, the volatility of the asset and the size of the holding relative to market liquidity. Option-based methods are commonly used to quantify it, since the inability to sell during a period has a value that can be modelled rather than estimated by rule of thumb.
Can you value a token that has never traded?
Yes, though the analysis looks quite different. Without market data, valuation works from the economics the token confers — rights to protocol cash flows, the assets backing a tokenised instrument, comparable token launches, or the value of the issuing business allocated across its capital structure. The report is explicit about the resulting measurement uncertainty.
Do you support fund NAV reporting for digital asset funds?
Yes. Funds holding digital assets need periodic marks on a consistent, documented basis that administrators and auditors will accept. Once the valuation policy and market selection framework are established, subsequent periods apply the same framework with updated data — which matters, because consistency of method is scrutinised as closely as the numbers themselves.
Related valuation services
- Business Valuation
- Startup & Pre-IPO Valuation
- Convertible Bond & Preference Share Valuation
- Expected Credit Loss Assessment
This page summarises how Valtech approaches this engagement type in Hong Kong. It is general information, not valuation, accounting, tax or legal advice for any specific entity. Scope and methodology are agreed in an engagement letter before work begins.
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