K-IFRS Reconciliations and Predicting Future Earnings

K-IFRS 도입 시점의 전환조정이 이후 기간의 미래이익 예측력에 미치는 영향

  • Ji, Sang-Hyun (Division of Business & Commerce, Baekseok University) ;
  • Kwak, Young-Min (College of Business Administration, Ulsan University)
  • Received : 2017.11.02
  • Accepted : 2017.12.20
  • Published : 2017.12.28


This Study analyzes the predictability of accounting information from mandatory K-IFRS adoption using the K-IFRS reconciliations information. We use the sample of 2,557 firm-year Korea listed companies belonging to non-financial corporate sector during 2010-2016. Specifically, we examine whether K-IFS reconciliation would improve or reduce the predicting power for future earnings after K-IFRS adoption. The results of empirical analyses show that reconciliation information from discretionary judgement tend to reduce the predicting power of K-IFRS based accounting earnings for future earnings. This result indicates that managers are likely to use the adjustments process to reconcile K-GAAP accounting numbers with corresponding K-IFRS as means to realize the various private utility. This study is expected to provide useful information by suggesting the need for more rigid screening schemes for the K-IFRS reconciliation process and also for adequate measures to be taken to ensure that the interests of the outside investors are properly protected.


Supported by : 울산대학교


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