The Financial Services Commission of Korea issued supervisory guidelines for applying the standard on asset impairment to reduce accounting uncertainties for entities under the current situation of COVID-19 pandemic. 

It is highly likely that conflict would arise between entities and auditors during the external audit process as uncertainties exist in estimating the endpoint and impact of the COVID-19 pandemic on entities when measuring assets’ value in use.

The supervisory authorities decided not to judge a future change in estimates as an accounting error as long as the assumption made by the entity is clearly not unreasonable and the entity makes a sufficient disclosure of the assumption used. 

The authorities expect the guidelines to help resolve the potential conflict between entities and auditors and also prevent excessive recognition of impairment losses that are not associated with the fundamentals of the entity. 

END

About the KASB

The KASB is an independent private organization established on 1 September 1999 with the mission to set and revise accounting standards in Korea. The Board is committed to enhancing the quality of financial reporting by providing high quality accounting standards that are on a par with internationally accepted accounting standards. The KASB consists of 9 board members (2 of whom are full-time) who are professionals from the private sector.

About the KAI

The Korea Accounting Institute (KAI) was established as an umbrella organization of the KASB. 

Press enquiries:
Hyun-duck Choi
Executive Director
Korea Accounting Standards Board
Tel: +82-2-6050-0166
Fax: +82-2-6050-0170
E-mail: hdchoi@kasb.or.kr

Jae-Ho Kim
Senior Director
Korea Accounting Standards Board
Tel: +82-2-6050-0175
Fax: +82-2-6050-0170
E-mail: jhkim@kasb.or.kr