IFRS 도입으로 인한 장기영업손실의 흑자전환에 대한 자본시장의 반응

In 2011, International Financial Reporting Standards (IFRS) were adopted in Korea, after which all listed companies and financial services institutions should prepare and disclose financial statements according to IFRS rather than Korean GAAP(K-GAAP). There are contradicting views about the effect of IFRS regarding the usefulness of accounting information. IFRS are expected to increases the usefulness of accounting information because of its high quality accounting standards. However, IFRS allow many alternatives in preparing and disclosing financial statements, which may cause the decrease of comparability among financial statements. For example, IFRS do not present the official format of financial statements. IFRS describe items to be presented in income statements, such as revenue, profit or loss, total other comprehensive income and comprehensive income for the period. IFRS, however, neither require the disclosure of operating income, nor describe the definition of operating income which has traditionally been one of the critical elements in income statement in Korea. KOSDAQ, the Korean version of NASDAQ, puts a firm on probation when it has reported operating losses for four consecutive years. Several distressed firms, which have reported operating losses for three consecutive years, have recently reported operating profits under IFRS while reporting operating losses under K-GAAP. There have been a number of debates on the turnaround caused by adopting IFRS in Korea. Most studies have reviewed the usefulness of IFRS rather than the economic consequences of IFRS. Christensen et al.(2009) expect that mandatory IFRS adoption affects the likelihood of violating existing covenants in debt contract, leading to a redistribution of wealth between shareholders and lenders. Consistent with the prediction, they find significant market reaction to IFRS reconciliation announcements. These market reactions are more pronounced among firms that face a greater likelihood and costs of covenant violation and early announcements. The results imply that IFRS reconciliation affects the likelihood of regulation violations in KOSDAQ, leading to change in wealth distribution among stakeholders. Our study investigates the market reaction to the event of the turning operating losses into profits through adopting IFRS and compares the value relevance of operating incomes of the distressed firms and other firms. Reviewing prior research has led to the following hypotheses:Hypothesis 1 (Event study): The capital market does not react to disclosure of turning operating losses into profits among distressed firms through adopting IFRS. Hypothesis 2 (Association study): The associations of annual stock return and earnings are not different between the distressed firms that turn operating losses into profits through adopting IFRS and other firms. Samples consist of the firms listed on the KOSDAQ which reported turnarounds in 2011. We focus on 15 distressed firms that reported operating losses in 2008, 2009 and 2010 and turned to operating profits only under the IFRS in 2011. We find a significant positive reaction in the market when the distressed firms disclose turning to operating profits under the IFRS in 2011. The results suggest that the evasion of probation is considered as good news in the capital market even when the turnaround is caused by adopting IFRS. The analysis on the value relevance of operating income shows that CAR(cumulative abnormal returns) of the year is related with unexpected operating income and operating income of the year. The value relevance of operating incomes of the 15 distressed firms is lower than other firms, while the value relevance of operating incomes of other distressed firms which realize the operating profits under both IFRS and K-GAAP in 2011 is similar to value relevance of other firms. The results indicate that the evasion of probation of distressed firms is good news in the stock market, but the value relevance of their accounting information is very weak. The evidence suggests practical implications that the definition of operating income should be concretely described to prevent arbitrary calculation when operating income is used as a measure of regulation in capital market. Korea Accounting Standards Board has eventually described the definition and required the disclosure of operating income in 2012.