South Korea will require companies that own or issue crypto to disclose their holdings in financial statements from 2024 onwards, according to draft rules released by the country's financial regulator on Tuesday.
Under the new rules, companies will need to disclose information about the quantity, characteristics, business models and accounting policies regarding the sale of virtual currencies as well as profits, volume and market value of their crypto.
The Financial Services Commission (FSC) announcement on deciding the draft rules says that the measures aim to improve accounting transparency, following the passing of the Virtual Asset User Protection Act on June 30.
Previously, companies and their auditors held different opinions on the timing and criteria for determining whether the sale of virtual assets to customers constituted profit. Under these rules, if companies sell virtual assets, the sales will be recognized as profit after the company fulfills obligations to its holders.
Costs incurred in developing virtual assets and their platforms will not be recognized as intangible assets, the announcement said.
Domestic accounting experts have continued to discuss accounting uncertainties over the past year, with the Financial Services Commission, the Financial Supervisory Service and the Accounting Standards Board participating. The announcement added that audit procedure guidelines are being prepared.
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