IFRS 연결재무제표와 별도재무제표의 가치관련성

Korea has fully adopted International Financial Reporting Standards (IFRS) since financial year 2011. All companies with subsidiaries listed in Korea Exchange (KRX) are required to report both consolidated and separate financial statements (i.e., parent-only financial statements) prepared in accordance with IFRS. However, separate financial statements are exposed to such problems that difficulties and divergence exist in preparing them due to the lack of detailed implementation guidance, and they are often confused with previous individual financial statements presented before IFRS adoption. Our study empirically examines relative and incremental value relevance between consolidated and separate financial information under IFRS regime. The objective of the study is to verify in terms of value relevance whether it is appropriate to have consolidated financial statements as primary ones, and whether it is appropriate to require the presentation of separate financial statements along with consolidated financial statements at the same time. The study is performed for non-financial KOSPI (Korea Composite Stock Price Index) firms only with subsidiaries whose financial years end in December by analyzing their consolidated and separate financial statements for financial year 2011 first presented and reported in accordance with IFRS. For the analysis, the study uses both stock price model and stock returns model based on Ohlson’s model. The study documents that the relative value relevance is not significantly different between consolidated and separate accounting information: book value per share (BPS) and earnings per share (EPS). Specifically, coefficients on consolidated BPS and EPS and coefficients on separate BPS and EPS are all significantly positive, but not significantly different in their respective matching magnitudes and also in their respective explanatory power (Adjusted R2) for stock prices and returns. This result does not support our first hypothesis that value relevance will be larger for IFRS consolidated information than for IFRS separate information. Notwithstanding, consolidated EPS is observed to have incremental value relevance against separate EPS by the significantly positive coefficient on the variable EPSdiff (i,e., consolidated EPS minus separate EPS), which is consistent with our second hypothesis of IFRS consolidated information having value relevance incremental to IFRS separate information. This incremental value relevance of consolidated EPS is found only for low leverage firms and growth firms, not for high leverage firms and value firms, indicating that investors provide additional value for consolidated EPS of firms that have sound financial stability (i.e., low debt ratio) and growth opportunity (i.e., low book-to-market ratio). These findings are largely consistent with the part of the results reported in Barth et al. (1998), Feltham and Ohlson (1995) and Collins and Kothari (1989). However, the incremental value relevance of consolidated EPS (i.e., coefficient on EPSdiff) proves not to be significantly different for large versus small firms, although it is significantly positive in both cases. Taken together, consolidated financial statements are regarded to provide incremental value against separate financial statements on average, although firm-specific characteristics such as firm size, leverage and book-to-market ratio are likely to affect the existence and the magnitude of the incremental value relevance. This result is based on only quantitative information of net assets and net income of consolidated and separate financial statements, but conclusively it implicates that it is appropriate for Korean government to set consolidated financial statements as primary ones as IFRS regulates. However, we should be cautious not to extend this result to uselessness of separate financial statements because separate financial statements could provide larger usefulness in various aspects such as loan decision and dividend decision other than firm valuation or investment decision. This view is consistent with Niskanen et al. (1998) that points out the differential usefulness of separate information in aspects other than in investment decision-making. In addition, our results also implicate that the users of accounting information need to use consolidated financial statements rather than separate financial statements for their investment decision-making. Our research contributes to accounting literature on value relevance in the sense that it first empirically examines relative and incremental value relevance of consolidated versus separate financial information under IFRS regime. That is, this research is very meaningful in that it first verifies from the investors’ perspective whether it is appropriate to set consolidated financial statements as primary ones and also to require firms to report separate financial statements simultaneously in addition to consolidated financial statements. On the other hand, this study has some limitations. Among others, this study includes in the sample consolidated and separate financial statements only for financial year 2011 in which IFRS is first adopted. To obtain more reliable conclusion, subsequently, this study needs to be extended to consolidated and separate financial statements for more financial years since 2011.