Centre asks companies to disclose cryptocurrency investments
The Ministry of Corporate Affairs said companies will be required to use an accounting software that records the audit trail.
March 26, 2021 / 08:56 AM IST
The Ministry of Corporate Affairs (MCA) on March 25 directed companies to disclose in their balance sheets whether they have invested in cryptocurrencies, and specify details of such transactions if any.
Companies will now have to mention details such as profit or loss on transactions involving digital currencies, amount of cryptocurrency held at the reporting date and deposits or advances from any person for trading or investing in digital currencies.
According to the MCA's notification, the amendment to Schedule III of the Companies Act, 2013 will come into effect from the April 1, when the next financial year begins.
The MCA notification comes at a time when the Centre has proposed a bill to regulate and potentially prohibit cryptocurrencies.
If companies are indulging in trading of cryptocurrencies, then there should be transparency about the magnitude and how much money is being made through such trading activities, an official told news agency PTI.
The official said there have been complaints in the past about some companies luring investors with promise of high returns by investing in cryptocurrencies and there were also instances of people losing money.
In an another notification on March 25, the MCA said companies will be required to use accounting software that records the audit trail.(With inputs from PTI)