Background

The Korea Accounting Institute (KAI), founded in September 1999, is an independent private organization responsible for establishing accounting standards and sustainability standards for both financial and non-financial reporting of entities.

The KAI is responsible for not only K-IFRSs that are used by all listed companies and financial institutions but also those used by unlisted companies, SMEs, and not-for-profit entities. The KAI has two bodies: the KASB, which develops Accounting Standards, and the KSSB, which develops Sustainability Disclosure Standards.

Accounting Standards

South Korea has adopted IFRS Accounting Standards for all listed companies and some unlisted companies.

Foreign companies must use one of IFRS Accounting Standards, K-IFRS or US GAAP.

Unlisted companies that are subject to external audit are required to use Korean GAAP (which is also described as ‘Accounting Standards for Non-Public Entities’) unless they choose to apply full IFRS Accounting Standards.

Sustainability Disclosure Standards

On 30 April 2024, Korea Sustainability Standards Board (KSSB) published three exposure drafts of Korean Sustainability Disclosure Standards (KSDS):KSSB 1 (based on IFRS S1);  KSSB 2 (based on IFRS S2); and KSSB 101 Additional Disclosure aligned with Policy Objectives. KSSB 1 and KSSB 2 were proposed to be applied on a mandatory basis and KSSB 101 to be non-mandatory.]

*The information above has been translated and compiled from publicly available sources, including the official websites of relevant institutions and the website of IFRS.