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Korea will move toward IFRSs

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16 Mar 2007

The Financial Supervisory Commission and the Korea Accounting Institute have announced a road map for the adoption of Korean equivalents of International Financial Reporting Standards (K-IFRSs).

The announcement ceremony took place in Seoul on 15 March. IASB Chairman Sir David Tweedie made congratulatory remarks.
The Korean Roadmap toward IFRSs
  • Listed companies. All listed companies will be required to prepare their annual financial statements under K-IFRSs beginning in 2011. Listed companies other than financial institutions will be permitted to do so beginning in 2009. Until adopting K-IFRSs, listed companies will continue to use current Korean Accounting Standards.
  • Unlisted companies. Unlisted companies will be allowed to use 'simplified accounting procedures' that KASB will adopt by 2011 but may elect to issue K-IFRS financial statements. Until KASB's simplified standards are in place, unlisted companies will continue to use their current Koeran Accounting Standards.
  • Consolidation. Currently, Korean companies both listed and unlisted are required to prepare separate company financial statements as their primary published financial statements. In addition they submit consolidated financial statements to the government, and consolidation is based on greater than 30% ownership. Under IFRSs, where there is a parent-subsidiary relationship, consolidated financial statements are required as the primary statements, with consolidation on the basis of control (generally greater than 50% ownership).
  • Interim reports. While all listed companies must prepare quarterly and semiannual financial statements, those with assets below KRW2 trillion (about US$2.2 billion) will not be required to prepare interim statements on a consolidated basis until 2013. All must disclose non-financial items quarterly and semiannually on a consolidated basis.

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