Adjusted Cost Base (Canada)

Adjusted Cost Base, commonly abbreviated ACB, is the Canadian tax term equivalent to cost basis (see Kaavon's "Cost Basis" glossary definition) elsewhere, representing the amount used to calculate capital gains or losses when an asset is disposed of. Canada's specific rule requires calculating ACB as a single pooled average across every identical unit of an asset a taxpayer holds, rather than letting the taxpayer choose which specific units to treat as sold the way a specific identification or FIFO (see Kaavon's "FIFO" glossary definition) method would elsewhere.

This pooled-average approach means every unit of a given crypto asset a Canadian taxpayer holds shares the exact same ACB at any given moment, recalculated and averaged in each time additional units are acquired at a different price — there's no flexibility to select specific higher-cost or lower-cost units to dispose of first the way methods like HIFO allow in other jurisdictions. This can make ACB tracking across many transactions and exchanges meaningfully more complex than it initially appears, since every single acquisition affects the pooled average applied to all previously held units of that same asset.