The Korea Accounting Institute is purportedly intending to classify digital currencies like bitcoin as ‘liquid assets’ in a bid to categorize them in financial statements.
As detailed by Business Korea, the Korea Accounting Institute (KAI) is making a accounting standard for digital currencies. The move underlines the rising prominence of digital currencies that have steadfastly pervaded into South Korea’s general public among ordinary investors and adopters.
The Institute, which sees the Korea Accounting Standards Board (KASB) under its purview, is fundamentally hoping to consider digital currencies as ‘liquid assets’ in statements while taking a gander at provisions that enable them to classify ‘non-current assets’. The last would rely upon the person’s listed purpose behind holding the cryptocurrency(s) and the length of ownership while surpassing one year.
In active markets with reliable price indicators and high transaction volumes, the reasonable value of a digital currency will be considered as the asset value. Digital currencies exchanged lesser, idle markets will have their historical costs ascertained while deciding the value, the report included.
Pointedly, a KIA official affirmed continuous progress – as of now in a draft – toward building up an accounting standard which could be uncovered as soon as March.
The official stated:
“A virtual currency accounting standard is still in the draft stage. We need to discuss more about it. We will prepare the virtual currency accounting standard by next month.”
The Institute additionally said it is figuring out ‘damage treatment methods’ the point at which the expected selling price of a digital currency is higher than its book value.
The Institute’s turn to perceive and characterize digital currencies in financial statements come when the nation’s financial regulator called for the ‘normalization’ of digital currencies in Korean society. Addressing reporters this week, Choe Heung-sik, head of the Financial Supervisory Service (FSS), affirmed the government would bolster normal digital currency transactions that aren’t unknown and, in an indication in supporting the digital currency area further, said the government will urge banks to set up ties and engage in transactions with crypto trades through virtual bank accounts.