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http://dx.doi.org/10.6106/KJCEM.2014.15.2.104

An Empirical Analysis of the Effect of the Introduction of Korean equivalents of International Financial Reporting Standards (K-IFRSs)  

Jang, Sewoong (Construction Division at Daerim Industrial)
Publication Information
Korean Journal of Construction Engineering and Management / v.15, no.2, 2014 , pp. 104-111 More about this Journal
Abstract
Due to the structure of advanced installment sales of houses which is a construction industrial structure unique to Korea and the Project Financing (PF) project structure that includes construction companies' debt guarantee agreements, the changes in accounting methods resulting from the introduction of K-IFRSs are expected to act in a direction to deteriorate construction businesses' financial statements. Therefore, K-IFRSs are an important issue that can seriously affect the entire domestic construction industry and construction businesses are conceiving strategies to respond to the introduction of K-IFRSs. From this viewpoint, this study was intended to empirically analyze the effect of the introduction of K-IFRSs on construction businesses utilizing financial data applied with the K-IFRSs recently announced. In the analysis, the EDFs were calculated by business using the existing accounting standards GAAP and using K-IFRSs and the results were compared with each other. The results of the analysis indicated that most construction businesses were adversely affected by the introduction of K-IFRSs. It is also considered that businesses with relatively good financial statements under the existing accounting standards GAAP would be affected more by the introduction of K-IFRSs than other businesses. In addition, the introduction of K-IFRSs is expected to have larger effects on large construction businesses that have been providing debt guarantees for PF projects than on small or medium sized construction businesses.
Keywords
K-IFRS; Construction company; KMV model;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
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