HashKey has classified its platform token, HSK, as a contract liability under IFRS 15, defining it as a performance obligation rather than a financial liability. This classification allows the company to manage financial volatility by locking in costs at historical values, avoiding the need to measure tokens at fair value, which could otherwise lead to significant fluctuations in reported profits and liabilities.
The classification decision contrasts with other exchanges like INX, which treat their tokens as financial liabilities under IFRS 9. HashKey's approach mitigates the impact of market price changes on its financial statements, as the liability balance remains unaffected by price fluctuations. The company estimates that only 5% of HSK tokens will be used, with the remaining 95% considered breakage, allowing for accelerated revenue recognition under IFRS 15.
HashKey Classifies HSK Tokens as Contract Liabilities
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