This week Korea’s Financial Services Commission (FSC) published guidance on accounting for cryptocurrencies or virtual currencies. Its preference is to follow the standards of the International Accounting Standards Board (IASB). While the U.S. is consulting on a proposed standard, the IASB is reluctant to prioritize work on crypto-assets.
Hence Korea’s FSC released an accounting standard that makes the disclosure of virtual asset transactions obligatory and a guideline on how to account for transactions.
In the U.S., custody of crypto-assets has become controversial after the SEC issued an accounting bulletin requiring assets held in custody to appear on the balance sheet as an asset and liability. That’s because the SEC believes there are higher technical risks that create legal risks. Typically assets held in custody are treated as belonging to clients and would not be on the balance sheet.
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