• Management & Information Systems Review
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• v.36 no.3
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• pp.151-165
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• 2017

This study investigates the effect of revenue recognition by percentage of completion method on financial analysts' earnings forecasting information in order industry. Specifically, we examines how the analysts' earnings forecast errors and biases differ according to whether or not to report the unbilled revenue account balance and the level of unbilled revenue account balance. The sample consists of 453 firm-years listed in Korea Stock Exchange during the period from 2010 to 2014 since the information on unbilled revenue accounts can be obtained after the adoption of K-IFRS. The results are as follows. First, we find that the firms with unbilled revenue account balances have lower analysts' earnings forecast accuracy than the firms who do not report unbilled revue account balances. In addition, we find that the accuracy of analysts' earnings forecasts decreases as the amount of unbilled revenue increases. Unbilled revenue account balances occur when the revenue recognition of the contractor is faster than the client. There is a possibility that managerial discretionary judgment and estimation may intervene when the contractor calculates the progress rate. The difference between the actual progress of the construction and the progress recognized by the company lowers the predictive value of financial statements. Our results suggest that the analysts' earnings forecasts may be more difficult for the firms that report unbilled revenue balances as applying the revenue recognition method based on the progress criteria. Second, we find that the firms reporting unbilled revenue account balances tend to have higher the optimistic biases in analysts' earnings forecast than the firms who do not report unbilled revenue account balances. And we find that the analysts' earnings forecast biases are increases as the amount of unbilled revenue increases. This study suggests an effort to reduce the arbitrary adjustment and estimation in the measurement of the progress as well as the introduction of the progress measurement method which can reflect the actual progress. Investors are encouraged to invest and analyze the characteristics of the order-based industry accounting standards. In addition, the results of this study empower the accounting transparency enhancement plan for order industry proposed by the policy authorities.

• Management & Information Systems Review
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• v.33 no.3
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• pp.167-187
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• 2014

While Korean GAAP had detailed regulations for the measurement and disclosure of operating income in the past, K-IFRS did not provide specific rules for operating income until 2011. Some firms that adopted K-IFRS before 2011 did not disclose or calculated operating income in an inconsistent manner although operating income is usually considered as one of the core information items to assess firm valuation. Inconsistency in firms' treatment of operating income invoked much criticism from diverse users of financial statement. The Korean Accounting Institute (KAI hereafter) revised the K-IFRS rules relevant to operating income in September 2010 in response to the voices raised by the business community, whereby the operating income number is allowed to be calculated in conformity with the previous K-GAAP. This study was motivated by the revision of K-IFRS and aims to provide a clue on the validity of such policy decision. To achieve the research objective, we test the relative value relevance of the alternative operating income numbers under K-IFRS versus K-GAAP. Our main findings are as follows. The value relevance of operating income reported before K-IFRS is proved to be higher than after K-IFRS. K-IFRS operating income adjusted to the previous K-GAAP has greater explanatory power for market values relative to one calculated under the K-IFRS regime. In an additional analysis, the sample was decomposed according to whether the operating income under K-IFRS is greater than under K-GAAP. The difference in the value relevance of K-IFRS versus K-GAAP operating income is significant only in the subsample consisting of firms which reports higher operating income under K-IFRS compared to K-GAAP. Also, the firms which would have reported negative operating income on a consecutive basis are more likely to have chosen K-IFRS, resulting in higher numbers than otherwise. It is likely that firms facing the threat of delisting due to consecutive operating loss reporting are more likely to have adopted K-IFRS disclosure rules by which they could report higher operating income numbers. To sum up, these results corroborate the limitation inherent in the K-IFRS regarding operating income disclosures. This paper suggests that the recent revision of K-IFRS implemented by KAI is likely to mitigate some of afore-mentioned limitations effectively.

• Journal of Preventive Medicine and Public Health
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• v.16 no.1
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• pp.163-192
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• 1983

In order to facilitate the Korean government's efforts in integrating family planning and maternal & child health at the primary health care level (or township level), the Soon Chun Hyang College of Medicine, with the financial and technical assistance of WHO, has under-taken a service research project. The project has employed a quasi-experimental study design introducing interventions tat provide crucial factors lacking in the ongoing government programs such as midwives and qualified referral physicians. The study is being conducted in three locations, one control area and two study areas. Before introducing trained Nurse/Midewives into the study areas, a baseline prevalence survey was undertaken from 15 July 1981 to 10 August 1981 in selelcted townships of Seosan County. In this sample survey of bath the study and control areas, 2,484 eligible women (97% reponse rate) were interviewed to obtain benchmark data on basic evaluation indicators related to family planning and maternal and child health. The salients results were summarized as follows.: 1. CONTACT RATES WITH HEALTH WORKERS; During the year preceding the survey, 12% of women were visited by government health workers. The primary reason for such visits by health workers was family planning (45% of the visits). About 34% of the women visited the health centers during the year. The primary reason for visiting health centers was immunizations for their children (45% of the visits). 3. FAMILY PLANNING USE RATE; The baseline data showed little difference between women in the study area and the control area on contraceptive use. Approximately 59% were currently using some methods. However, among those current users, almost half were practicing less effective methods of birth control such as rhythm or withdrawal. Among other methods, the tubectomy was the most popular (16%), while use of the IUD, oral pill and condom together reached only 14%. 3. PRENATAL CARE RATE; About 75% of the women reported no prenatal care for their last births (the youngest child of each women), Additionally, among women received prenatal care, over half had only one visit. 4. ATTENDANCE AT DELIVERY; Most of the women surveyed (over 80%) were attended by a non-medical person during their last delivery. These figures are somewhat comparable to the national figure of 84% for remote areas. 5. POSTNATAL CARE; The proportion of women reporting postnatal care was only 4.5%, and postnatal care was not received by the majority of women surveyed. 6. CHILD HEALTH CARE: In contrast to the low rate of maternity care for women themselves, most women reported obtaining immunization care for their children. About 75% of the women obtained Polio and/or DPT, 58% BCG, and 44% Measles vaccine for their children. However, in terms of illness care, while 35% of the women stated that their youngest child had been sick during the month preceding the survey, only 28% of these women took their child to the clinic for treatment. 7. COMPLICATIONS OF PREGNANCY AND DELIVERY AND ABNORMALITIES IN THE NEWBORN; Among all last deliveries, 18% of the women had pregnancy complications and 9% of the women had complications during delivery About 5% of the women reported abnormality in their most recent newborn. 8. REPRODUCTION EFFICIENCY; PERINATAL MORTALITY AND INFANT MORTALITY Based on data from the pregnancy history in this survey, reproduction efficiency was estimated. Out of the 11,154 pregnancies reported by all women surveyed, foetal loss was 21% (almost 16% were induced abortions) and infant deaths before reaching one year old were 3.1%. The reproduction efficiency was, therefore, reduced to 76%. In terms of perinatal and infant mortality rates, the former was 40.2 per 1,000 total births and the latter was 39.3 per 1,000 live births. Both rates described J shaped relationships with age of mothers and parity, and they were also correlated with birth interval and mother's education. In summary, this baseline survey data indicated a need for (1) improving contraceptive practices with more effective methods to prevent unwanted pregnancies and (2) providing better services for maternal and child care to protect wanted pregancies. In the Korean rural setting. the author believes that the latter is more important as the value of each child has increased as a result of the family planning campaign for the past two decades. This calls for more effective integration of Family Planning and MCH programmes to meet the needs of the family in each stage of the child bearing and rearing period with deploying more qualified personnel than the current government program personnel.