Key takeaways
South Korean financial regulator wants companies to disclose their crypto assets in their financial statements.
The aim is to improve accounting transparency amongst companies operating in the country.
South Korea introduces a new crypto bill.
South Korea would soon require companies that own or issue cryptocurrencies to disclose their holdings in financial statements.
The country’s financial regulator released this draft on Tuesday, and if approved, companies that hold cryptocurrencies would be required to disclose their holdings starting in 2024.
Per the new rules, companies would be required to provide investors with information about the quantity, characteristics, business models and accounting policies regarding the sale of cryptocurrencies.
Companies will also need to provide other information such as profits, volume and market value of their crypto.
South Korea seeks to boost accounting transparency
While commenting on this latest cryptocurrency news, the Financial Services Commission (FSC) said it is making this move to improve accounting transparency following the passing of the Virtual Asset User Protection Act last month.
In the past, companies and auditors differed regarding the timing and criteria for determining whether the sale of cryptocurrencies to customers is regarded as profit. However, the new rules stipulate that if companies sell cryptocurrencies and other virtual assets, the sales would be recognised as profit after the company fulfills obligations to its holders.
Furthermore, the regulatory agency said costs incurred while developing virtual assets and platforms would not be classified as intangible assets.
South Korea remains one of the countries in the world with clear cryptocurrency regulations. In May, the National Assembly approved a bill that requires South Korean officials to disclose their cryptocurrency holdings.
Per the bill, government officials must declare all crypto holdings that amount to $760 or more. The requirement was already in place for cash, stocks, and bonds, among other assets.