The Korean Institute of Certified Public Accounts. The Korean Institute of Certified Public Accounts(KICPA) was formed in 1945 with a membership of only twelves CPAs

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Subject IFRS Adoption is two months away
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With two months to go before the IFRS adoption for listed companies and financial institutions, there are still a number of unresolved issues. In particular, shipbuilding and construction industries are working with the IASB to revise the international standards and reflect their unique needs.

Shipbuilders are inherently vulnerable to fluctuations in exchange rates which may result in the distortion of financial statements. So they have called for the introduction of risk hedging accounting. The industry’s consistent call for the revision of accounting standards has paid off and resulted in partial revision of the standards in July.

Shipbuilders continue to work to push for additional revision of the standards so that LP (Linked Presentation) method can be introduced to prevent sudden fluctuations in debt ratio on the book.

On the other hand, constructors are working to change the standards related to the timing of revenue recognition. As IFRS stipulates that revenue recognition should be done after the completion of construction, unique local practice of selling apartments before the start of construction can’t be reflected.

Constructors expressed its concerns to the IASB in early August and submitted related documentation on 20th of this month.

There are many unresolved issues regarding the consolidated financial statements and confusion about the scope of subsidiaries.

Jung, Do-Jin, professor of Joongang University, pointed out “It is imperative to build a system that can reflect our voice and needs. We need to have a kind of a control tower at the government level to respond to emerging issues systematically.”