K-IFRS(한국채택 국제회계기준)에 근거한 기능통화 회계제도의 도입 효과: 외항해운기업 사례

A standard for transactions in foreign currencies or foreign operations, part of K-IFRS that is adopted in Korea starting 2011, introduces a new concept of functional currency. This standard lets an economic entity determine a functional currency, which is the currency of the primary economic environment in which the entity operates. Once a firm decides its own functional currency, it has to use its functional currency in recording transactions and preparing for financial statements. The introduction of functional currency is expected to help mitigate the excessive impact born by the fluctuation in foreign exchange rates and enable true reflection of economic substance on the financial statements. That can be done because the functional currency of the firm is determined based on the primary currency which incorporates the main cash flow and reduces the proportion of accounts which are exposed to foreign exchange rates. Sea-transport companies are expected to be directly affected by the new standard because those companies have a lot of debt accounts borrowed in foreign currencies to be exchanged into Korean currency following the current K-GAAP. If those companies choose a foreign currency closely related with their operation based on the new standard, they do not have to exchange those debts into Korean currency anymore. In this study, by looking at a case of a Korean sea-transportation company with a huge foreign long-term debt, we confirm the advantages of functional currency and its foreign currency conversion.