K-IFRS 1109(금융상품) 시행 이후 금융회사 이익의 질 변화

This study examines the effect of the implementation of K-IFRS 1109 on earnings quality of financial companies. K-IFRS 1109 introduces several changes for financial instruments: (1) recognition criterion of impairment loss on loan receivables from incurred credit loss to expected credit loss, (2) classification of financial instruments, and (3) conceptual clarification between debt and equity securities. These changes seem to affect earnings quality in two conflicting ways. Adoption of expected credit loss (ECL) is expected to improve accounting-based earnings quality by reducing the procyclical impairment of the economy, while strict application of classification is expected to reduce market-based earnings quality by increasing the proportion of financial assets measured at fair value through profit or loss. Accordingly, we expect accounting-based earnings quality to increase for firms with more financial assets measured at amortized cost, and market-based earnings quality to decrease for those with more financial assets measured at fair value through profit or loss. The results generally support our expectations. After the implementation of K-IFRS 1109, future write-off predictability and earnings persistence enhance for firms with more financial assets measured at amortized cost, while value relevance deteriorates for firms with more financial assets measured at fair value through profit or loss. This study contributes to the literature by documenting the effect of the implementation of K-IFRS 1109 on earnings quality for financial firms, depending on the proportion of financial instruments of financial companies.