Companies to disclose Details of CryptoCurrency/ CSR Activities etc in financial statements
Ministry of Corporate Affairs via Press Release dated 11th Aug 2021 has shared that MCA has amended Schedule III of Companies Act on disclosure norms in financial statements. Companies are now required to disclose Details of CryptoCurrency or Virtual Currency. Besides Details of Corporate Social Responsibility (CSR) are also required to be shared.
This is done to bring in greater transparency in reporting of financial statements. The Ministry of Corporate Affairs (MCA) vide notification dated 24.03.2021 has amended Schedule III to the Companies Act, 2013 effective from 01st April 2021 to mandate various disclosures by companies in their financial statements.
The Minister stated that the new disclosures with respect to the virtual currency/cryptocurrency transactions and CSR spending undertaken by companies during a financial year are:-
Details of CryptoCurrency or Virtual Currency
Where the Company has traded or invested in Cryptocurrency or Virtual Currency during the financial year, the following shall be disclosed:-
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 in Crypto Currency/virtual currency.
Details of Corporate Social Responsibility (CSR)
Where the company is covered under section 135 of the companies act, the following shall be disclosed with regard to CSR activities:-
a) amount required to be spent by the company during the year,
b) amount of expenditure incurred,
c) shortfall at the end of the year,
d) a total of previous years shortfall,
e) reason for the shortfall,
f) nature of CSR activities,
g) details of related party transactions, e., contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard,
h) where a provision is made with respect to a liability incurred by entering into a contractual obligation, the movements in the provision during the year should be shown separately.