South Korea’s financial regulator has released draft rules requiring companies that own or issue crypto to disclose their holdings in financial statements from 2024 onwards. According to the Financial Services Commission (FSC), the measures are intended to improve accounting transparency following the passing of the Virtual Asset User Protection Act.
Under the new rules, companies must disclose information about the quantity, characteristics, business models, and accounting policies related to the sale of virtual currencies, as well as profits, volume, and market value of their crypto. 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 FSC, Financial Supervisory Service, and Accounting Standards Board have been discussing accounting uncertainties over the past year. The announcement added that audit procedure guidelines are being prepared. 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, the FSC said.