The Korean Accounting Standards Board has released the results of a Post-Implementation Review Project on K-IFRS 1113 Fair Value Measurement, the Korean translation of IFRS 13. The project reveals that the problems and difficulties in applying the standard include: a lack of relevant guidelines for valuation, significant differences in disclosures among firms, lack of skilled valuation professionals and related training materials, and conflicts of the standards and existing laws and regulations in Korea for valuation of tangible assets, subsidiaries, and associates.
Among the conclusions reached are:
- More attention and effort are needed from the regulatory body to increase the usefulness of fair value information, such as the provision of qualifications for valuation experts;
- Appraisal firms, valuation institutes, and others need to form practical working-level meetings on K-IFRS fair value assessment to narrow the gap between what is required in the standard and existing laws and regulations; and
- In the long term, it is necessary to constantly improve the level of relevant infrastructure, such as fostering of valuation experts, accumulation of data, better capital market system, and higher ethical standards to increase the usefulness of fair value information.
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