From January 2024, South Korea will introduce new regulations for detailed crypto openings to strengthen the transparency of the bookkeeping

From January 2024, South Korea will introduce new regulations for detailed crypto openings to strengthen the transparency of the bookkeeping

South Korea plans to introduce new rules from January 2024, the companies that spend or own cryptocurrencies, oblige to state detailed crypto-proofs in their financial reports. These new disclosures should contain a variety of information, including the amount and properties of the crypto token, the company's business model and the internal accounting principles in relation to the sale of cryptocurrencies and the associated profits. Companies that keep cryptocurrencies for investment purposes must also disclose information about the classification of the token, the book value and the market value of their stocks.

The Financial Services Commission (FSC) South Korea emphasizes that the main goal of these rules is to strengthen the transparency of the bookkeeping. The collapse of Terra last year, in which around $ 40 billion was destroyed within a few days, has led to increased pressure to continue the examinations by the judicial authorities.

In the past, there were different views between companies and their auditors in South Korea about when the sale of virtual assets to customers should be regarded as profit. The new rules are intended to clarify this question by determining that the sale of virtual assets is only recorded as a profit when the company has met its obligations towards its owners. In addition, the costs associated with the development of virtual assets and their platforms are not recorded as intangible assets.

Currently, guidelines for examination procedures are being developed to support the implementation of the new rules. On July 7th, these guidelines were approved by the Korea Accounting Standards Board.

With the introduction of these new rules, South Korea wants to improve the transparency and stability of the cryptocurrency market. However, the exact effects on companies and investors remain to be seen.

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