국가가 소유한 공기업출자금의 연결회계 적용 및 효과 분석 사례

This paper investigates the costs and benefits of consolidation accounting for government investment in Korean public corporations (PCs), which comprises a significant portion of long-term and short-term investment assets of Korean government. The current Korean government accounting standards mandate that all investments in PCs must be recorded at historical costs rather than using consolidation accounting. However, given that Korean government exerts significant influence over PCs through ownership and regulation, the government and PCs can be viewed as as a single economic entity. As such, there are some critics on the current accounting treatment about government’s investment in PCs (i.e., historical cost accounting). In other words, the historical cost accounting for government investment in PCs does not properly reflect the financial health and performance of government and diminishes the usefulness of financial information. To assess whether consolidation accounting captures different information about Korean government’s investment, we have conducted series of applications of consolidation processes in government financial statement. Specifically, we review (1) the required disclosing information to prepare consolidated financial statements and (2) differences in the amount of key accounts and financial ratio before and after the consolidation. We find the following results. First, many assumptions are required to prepare the consolidated financial statements in the process because the government and PCs disclose limited financial information externally. Therefore, the government may need to improve the disclosure quality by increasing both disclosed information and information consistency between government and PCs. Second, when we conduct the simulation analysis to check whether there exists a significant difference in financial statement accounts and financial ratio after adoption of the consolidation accounting, we find that the government’s assets and liabilities significantly increase, while revenues and expenses do not change after appying the consolidation accounting. More importantly, the debt-to-GDP ratio, which is commonly used for comparison of financial soundness across countries, shows about 100% after the consolidation while the ratio is reported as 80% under the current financial statements that are prepared based on historical cost accounting. The large difference in the debt-to-GDP ratio implies that consolidation procedure is not meaningless. Instead, consolidated financial statement is essential to ensure the comparability of financial soundness of government’s investment across countries, considering that OECD countries like UK and Australia adopted consolidation accounting. Moreover, the consolidation accounting is theoretically appropriate considering that the government has substantial ownership and effective control over PCs. In this paper, we investigate the prerequisites for applying consolidation to the government accounting to improve the consistency and comparability of financial statements of both the government and PCs. In addition, we evaluate the informativeness of consolidated financial statement by analyzing the key financial ratios before and after consolidations. We hope that our findings will encourage the discussion about the necessity of consolidated financial statements of government.