South Korea Implements Mandatory Crypto Asset Disclosure For Companies

In a move to enhance accounting transparency related to virtual asset transactions, the South Korean government will require companies that issue or hold virtual assets to disclose clear and detailed information.

The Financial Services Commission on July 11 added mandatory disclosure items related to virtual assets and discussed the direction of accounting for virtual assets.

The plan aims to provide more consistent and clear information about companies that issue or hold virtual assets. However, the government has cautioned that the volatility or uncertainty of the virtual asset itself does not decrease just because the accounting standards for virtual assets have been established.

Also Read: Microsoft Azure Transforms With Axelar - It's A Blockchain Party

The measures to enhance transparency in accounting and disclosure related to virtual assets include supervisory guidelines for accounting for each transaction related to virtual assets and revision of accounting standards that obligates disclosure of virtual asset transactions.

For virtual asset issuers, the guidelines clarify the timing of revenue recognition for sales of virtual assets.

For virtual asset holders, the guidelines clarify the classification of virtual assets, and for virtual asset operators, the guidelines provide clarity on whether to recognize customer-entrusted virtual assets as an asset or liability in the operator's financial statement.

In addition, the government plans to prepare and distribute audit procedure guidelines that external auditors can refer to when auditing companies that hold, develop, and issue virtual assets.

The government plans to hold at least one briefing session for each stakeholder, such as listed companies, virtual asset operators, and accounting firms, over the next two months to sufficiently listen to their opinions.

Read Next: Crypto Regulatory Turmoil - SEC Asserts Authority, Republicans Struggle To Respond

Join Benzinga's Future of Crypto in NYC on Nov. 14, 2023 to stay updated on trends like AI, regulations, SEC actions & institutional adoption in the crypto space. Secure early bird discounted tickets now!