As business uncertainties intensify due to escalating global risks and volatility in exchange rates and raw material prices, the Financial Supervisory Service (FSS) has pre-announced the "4 Key Accounting Issues to Focus on for the 2026 Financial Statement Review." (The full-scale intensive review is scheduled to take place during 2027.)
📌 FSS's 4 Key Accounting Issues & Key Notes
① Overseas Revenue and Trade Receivables: Recognizing revenue at the exact point when control is transferred based on specific delivery terms (e.g., FOB) and properly reflecting expected credit losses.
② Valuation Losses on Inventories: Reflecting rising costs and declining demand, and strictly adhering to the lower-of-cost-or-market (NRV) valuation principle for each item category.
③ Investment Property Classification & Disclosure: Clearly classifying properties held for rental income or capital appreciation, and strengthening footnote disclosures regarding fair value.
④ Provisions and Contingent Liabilities Disclosure: Measuring the best estimate for obligations related to lawsuits, financial guarantees, and joint-and-several consortium liabilities, while preventing omissions of contingent liabilities.
This review is expected to be a high-intensity inspection based on specific historical non-compliance cases. Any violations could lead to severe consequences, such as substantial administrative fines and significant reputational risks. Financial managers should immediately incorporate these focus areas into their risk screening processes during the 2026 year-end closing and proactively secure objective transaction evidence.
Hyesung Accounting Corporation provides customized advisory services for reviewing these issues and establishing effective response strategies. If you require practical support, please feel free to contact our expert team at any time.
For more detailed information, please refer to the link below.
