국제회계기준 도입에 따른 재무회계정보의 가치관련성 비교: K-IFRS vs. K-GAAP

Abstract

This study investigates the relative value relevance of financial statements prepared under Korean International Financial Reporting Standard (hereafter, K-IFRS) and Korean Generally Accepted Accounting Principle (hereafter, K-GAAP). Unlike K-GAAP which provides specific rules for the preparation of financial accounting information, principle-based K-IFRS allows the firms a greater flexibility in choosing accounting policies. To shed a light on the effect of the adoption of K-IFRS on the usefulness of financial accounting information, we compare the associations between stock prices and financial accounting information, prepared by either K-IFRS or K-GAAP. By using the 1,456 observations for the year of 2010, when Korean firms were required to disclose two financial statements based on both K-IFRS and K-GAAP, we find following empirical results. First, the book value of equity prepared under K-IFRS has a lower individual association with stock prices than that under K-GAAP. Second, net income calculated under K-IFRS has a higher individual association with stock prices than that under K-GAAP. Lastly, the combined association of both the book value of equity and net income with stock price is higher when K-IFRS is applied rather than when K-GAAP is applied. This study may contribute to accounting academia, financial regulator, and investors by providing a piece of evidence that the adoption of K-IFRS improves the value relevance of financial accounting information in Korean stock market, which supports the reasonableness of the Korean accounting policy maker’s decision to adopt K-IFRS.