리픽싱 전환우선주의 다양한 회계처리에 대한 적정성 검토: 파생상품 정의를 중심으로

Korean firms often issue convertible preferred shares whose conversion price is adjusted following stock price changes (henceforth, “refixing CPS”s). This study introduces five different accounting treatments for a refixing CPS that are currently observed in practice and assesses the adequacy of each accounting treatment according to the Korean International Financial Reporting Standards (henceforth, “K-IFRS”). These variations stem primarily from different interpretations on whether the conversion right embedded in a refixing CPS meets the definition of derivatives under K-IFRS, which is an issue that is unique to CPSs and not relevant for other convertible financial instruments. This study concludes that the conversion right embedded in a CPS does not meet the definition of derivatives, and thus classifying a refixing CPS as a financial liability measured at amortized cost is most compliant with K-IFRS. The suggested accounting treatment allows firms to not only provide more accurate accounting information but also reduce the cost of mandatory disclosure imposed by the Korean stock exchange and K-IFRS. This study emphasizes the importance of the definition of derivatives in the accounting treatment of convertible financial instruments, contributing to the accounting literature and practices.