The Ministry of Corporate Affairs (MCA) released a directive on March 25 requiring companies to report whether they have invested in cryptocurrencies in their balance sheets, as well as the specifics of any such transactions.
Companies will also be forced to disclose information such as profit or loss on digital currency transactions, the amount of cryptocurrency kept at the reporting date, and any deposits or advances by any individual for the purpose of trading or investing in digital currencies.
Data on Cryptocurrencies also known as virtual currency. The following information must be revealed whether the Company has exchanged or invested in Cryptocurrency or Virtual Currency during the financial year: -
(a) Profit or loss on transactions involving Cryptocurrency or Virtual Currency
(b) Amount of currency held as at the reporting date
(c) Deposits or advances from any person for the purpose of trading or investing
A few other changes aimed to expand the audit reporting spectrum. Managerial representations on advances, loans, and investments, among other things, will now be required to be published. One of these reforms mandates that businesses use accounting software to keep track of their books and report the audit trail of each transaction.
The amendment to Schedule III of the Companies Act, 2013, will take effect on April 1, when the new financial year begins, according to the MCA's notice.