The Effect of First-time Adoption of K-IFRS on Consolidated Financial Statements : Case Study of Pulmuone Company

The Korean government has recently allowed firms to adopt K-IFRS from fiscal year 2009 prior to the adoption of K-IFRS in 2011, which required them to prepare their consolidated financial statements in accordance with K-IFRS. This study investigates the effect of the first-time adoption of K-IFRS on key financial measures of Pulmuone, focusing on illustrating how K-IFRS affect Pulmuone's consolidated financial statements. The findings show that K-IFRS adoption at Pulmuone affects its financial performance and financial position. The assets, liabilities and equity based in K-IFRS on January 1, 2008 and December 31, 2008 all increased. Operating income, income before tax, income and comprehensive income drastically increased compared with accounting policies based on K-GAAP. The study also demonstrates that Pulmuone's transition to K-IFRS appears to introduce volatility in consolidated financial position and income statement figures.