South Korea Plans To Require Crypto Holdings Disclosure
Milestone Date: July 12, 2023
Draft rules from South Korea’s Financial Services Commission (FSC) state that companies will be required to disclose their crypto holdings as part of their financial statements if they own or issue crypto. The requirement is set to begin in 2024, and the FSC’s goal is to improve accounting transparency.
According to the updated regulations, companies are required to provide details on the quantity, characteristics, business models, and accounting policies regarding the sale of cryptocurrencies and profits.
In the past, there were differing views between companies and their auditors regarding the timing and criteria for when the sale of virtual assets to customers could be considered as profit. The new rules now clarify that profits from the sale of crypto assets will be recognized only after the company fulfills its obligations to its holders.
The announcement also clarified that costs associated with the development of virtual assets and their platforms will not be acknowledged as intangible assets.
Over the past year, domestic accounting experts — along with the FSC, the Financial Supervisory Service, and the Accounting Standards Board — have engaged in ongoing discussions to address accounting uncertainties. The announcement also mentioned the preparation of audit procedure guidelines.
By Elizabeth Morrison
Published:July 12, 2023