Token Transactions Accounting

Yes — the full €3,000,000 appears on your balance sheet on the date of receipt, but not as revenue. If you raised in ETH (or other crypto), the crypto received becomes an asset (IAS 38 intangible, or IFRS 9 financial asset if treated as a financial instrument) at its EUR fair market value on the date of receipt. Simultaneously, the deferred revenue liability (token sale liability) for €3,000,000 is created. Your balance sheet on TGE day shows: Assets up by €3,000,000 (crypto received) and Liabilities up by €3,000,000 (token sale liability). Revenue is recognised from zero on TGE day and builds over the platform life as the service obligation is fulfilled. The crypto asset can fluctuate in value — under IAS 38 revaluation model, this creates OCI movements. The deferred revenue stays at the original proceeds amount (€3,000,000) and reduces only as revenue is recognised.

IFRS 2 applies to share-based payments to employees and others who provide services. If the founders are providing services to the OÜ — even as contractors, advisors, or in other capacities — IFRS 2 applies to their token grants. The fact that they are also shareholders does not exempt the grant from IFRS 2 treatment. The critical question is whether the token grant is compensation for services or a capital allocation as shareholders. If the founders received tokens because they are the founding team that will build the protocol — that is compensation for services, and IFRS 2 applies. If they received tokens purely as founders in proportion to their equity stake — that may be treated as a capital allocation. In practice, most token grants to founding team members who also provide services are treated under IFRS 2. The fair value at grant date is expensed over the vesting period, with a corresponding equity reserve.

The burn mechanism is part of your protocol’s fee structure. When users pay fees to the protocol: (1) the total fee collected is protocol revenue (recognise at FMV in the period collected); (2) the 50% that is burned is a distribution/use of that revenue — it reduces the outstanding token supply. The accounting for the burned portion: if the protocol collected fees in its own token, the burn is a derecognition of those tokens at their carrying value. The specific P&L treatment depends on your token classification. If the burned tokens represent deferred revenue (utility token), burning them releases the deferred revenue to recognised revenue — so the burn is actually a revenue recognition event, not an expense. If the tokens are equity-like, burning them reduces equity. In practice, fee-burn mechanisms are relatively novel and there is no IFRS-settled treatment. Document your chosen approach in the accounting policy and apply it consistently.

The treasury tokens must be disclosed in your annual report, with their fair value. For utility tokens (deferred revenue classification), the treasury position represents unsold future platform capacity — you would typically disclose the number of tokens in treasury, the circulating supply, and the current market price for reference, without necessarily recording them as a balance sheet asset (since they are the issuer’s own obligations, not an asset in the traditional sense). For governance or equity-like tokens, treasury tokens are similar to own shares held — disclosed but typically not recognised as assets on the balance sheet (own instruments deducted from equity per IAS 32). For the annual report notes: disclose the total token supply, circulating supply, treasury breakdown by purpose (team vesting, ecosystem grants, liquidity), the vesting schedule for team allocations, and any significant distributions during the year. A standard token economics table showing supply distribution is the industry norm and is expected by sophisticated readers of Web3 company accounts.

For an Estonian OÜ, using accumulated revenue to buy back tokens from the market does not trigger distribution tax — because you are using the funds to purchase assets (your own tokens), not to distribute to shareholders. The buyback itself is an accounting transaction, not a taxable distribution. Tax efficiency considerations: (1) If the tokens repurchased were originally sold as utility tokens (deferred revenue), buying them back and cancelling the obligation reduces the deferred revenue liability — this creates a gain or loss depending on the repurchase price vs original proceeds, which flows through the P&L and increases or decreases retained earnings. (2) These retained earnings are not taxed until distributed as dividends. (3) The crypto used to fund the buyback (assuming the OÜ sold ETH or other tokens to raise EUR) is a disposal event — a taxable gain arises in the OÜ on the crypto sold, which flows to retained earnings but does not trigger immediate distribution tax. (4) Plan buybacks alongside dividend planning to avoid distributing in the same year as large buyback losses, which would create a timing mismatch.