"Making Corporate Value Assessment Easier"... FSC Mandates Disclosure of Published Land Value in Footnotes for Company Land Holdings

The government will now require companies to disclose the officially assessed land value (published land price) of land holdings in their financial report footnotes, so that investors can accurately assess corporate value.

On September 23, the Financial Services Commission announced that the proposed amendment to Korean International Financial Reporting Standards (K-IFRS) No. 1016, 'Property, Plant and Equipment,' which includes this requirement, has been finalized following a report to the commission.

Currently, K-IFRS No. 1016 on property, plant and equipment recommends disclosure of fair value when there is a difference between the carrying amount of property under the cost model and its fair value. In practice, however, disclosure of fair value has not been made, making it difficult for investors to assess fluctuations in the value of corporate assets.

Accordingly, the commission now requires companies to disclose the officially assessed land value of land holdings under the cost model in the footnotes, as stipulated by the Act on the Public Announcement of Real Estate Values. However, land for which there is no officially assessed value and land located overseas are excluded from this disclosure requirement.

The amendment will apply starting with annual financial statements for the fiscal year ending December 31, 2026.

An official from the Financial Services Commission stated, "This measure will help investors assess fluctuations in the value of corporate assets and enhance comparability with companies applying general corporate accounting standards (K-GAAP), which already disclose published land values in the footnotes."

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