• Korea Trade Review
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• v.42 no.3
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• pp.25-47
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• 2017

Forfaiting is a trade finance facility whereby financial institution purchases accounts receivable from exporters, on a without recourse basis. After the adoption of K-IFRS in 2011, accounting for simple borrowing as usual negotiation increases debt ratio which in turn, worsens financial soundness of a company. Hence, exporting companies have their interest in forfaiting that enables book-off in order to decrease the borrowing. Along with the execution of URF 800 at ICC and increasing the interest of exporting companies into forfaiting, foreign exchange banks in Korea expand the development of products related to forfaiting. Upon surveying all these national banks of this matter, this paper identified an appropriate solution for the forfaiting practice.