휴대전화 단말기 보조금 회계 전쟁

As the Clause four of Article 36 of Electronic Communication Business Law, “Prohibition of Subsidized Provision of Mobile Handsets,” became ineffective as of March 26 of 2008, there was a big debate, which was called “Accounting War” in the newspaper, among mobile communication companies about whether the subsidized provision should be capitalized or expensed. However, the debate was submerged as KTF, which caused the controversy by submitting to the Financial Supervisory Service (FSS) an inquiry about the appropriateness of capitalizing the subsidized provision of mobile handsets, finally expensed all the subsidized provision for mobile handsets in its financial reporting of the second quarter of 2008. KTF submitted the inquiry because it might judge that the existing accounting guideline from the FSS, which requires firms to expense immediately all the subsidized provision of mobile handsets, does not fully represent the financial substance of the new form of subsidized provision of mobile handsets. But a more direct reason is that KTF was encountering a situation to report a net loss for the first time since 1999 by spending aggressive marketing expenditures for preoccupying 3G communication market ahead of the other two mobile communication companies. The purpose of this case study is to review the alternative accounting methods related to the financial subsidy for mobile handsets, and to understand how the alternative accounting methods would affect the financial reporting. Under the principle-based K-IFRS system, accountants should be able to make an appropriate judgment in the selection of a specific accounting method. The in-depth understanding of this case will provide a good guideline for accounting interest groups such as accountants, rule making organizations, and accounting information users to follow in assessing the appropriateness of a particular accounting method.