This presentation was made by Kyoung Sook Lee, Korea, at the 15th Annual OECD Public Sector Accruals Symposium held in Paris on 26-27 February 2015.

1. Government Financial Accounting Division
Ministry of Strategy and Finance
Accrual Accounting System of
Korea Government
Kyoung Sook Lee
Deputy Director

2. 1
Achievement and Future Challenges
Ⅰ
Ⅱ
Ⅲ
Ⅳ
Ⅴ
Financial Statements preparation process
Standards Setting Process
Regulatory Framework of National Accounting
History of Accrual Accounting Reform
Table of Contents

3. 2
I. History of Accrual Accounting Reforms
1998
• National Finance
Act was enacted
2006
• Announce adoption of
Accrual Accounting
system(The Ministry of
Finance and Economy)
2007
• National Accounting
Act was promulgate(enforce
in 2009)
• dBrain(IT system launched)
2009~2010 2011~
• F/S was submitted to
the National Assembly
• National Accounting
Standards enacted in
March 2009
• dBrain system reform
• Trial period of F/S
preparation

4. 3
I. History of Accrual Accounting Reforms
3-Years Roadmap for
new national accounting system
 Accounting Standards for Provision
 Due Diligence of Infrastructure Asset
 Financial Analysis Method
Accounting Operating
System
Infrastructure
 Assistance of CPAs for F/S
preparation
 Newly Added Accounting Position
 Training for Accrual Accounting
 Incentive for related Officials
Capacity & Expertise

5. 4
National Accounting Act
Enforcement Decree of
National Accounting Act
National Accounting Standards
Technical
Releases
Structure and composition of the Consolidated
Financial Report
Information to be presented in Revenue and
Expenditure Reports, preparation and submission
of supplementary documents
F/S preparation (Statement of Financial Position,
Statement of Financial Operations, Statement of
Changes in net assets)
Definition and measurement of assets and
liabilities
Technical Releases on Accounts of the Financial
Statements, Lease, BTO, Pensions, etc.
II. Regulatory Framework of National Accounting
National Finance Act
Guideline for closing process(preparation, Audit
inspection, Submission to National Assembly)

6. 5
II. Regulatory Framework of National Accounting
Composition of F/S
KNAS
Presentation of
statement of
financial operations
Measurement of PP&E
Cash Flow Statement is not
included, but Revenue and
Expenditure report included
Cash Flow Statement included
Recognition of
provisions
IPSAS
Recognition of
BTO usage right
Net Operating Costs-Non
exchange Revenues = Fiscal
Operating Results
Revenue – Expenses =
Surplus or deficit
Mandatory application of
Revaluation model
Cost Model or Revaluation
Model
Certain Probable
Deduction from Asset Liability

7. 6
Ⅲ. Standards Setting Process
Government Accounting
and Finance Statistics
Center(GAFSC)
Ministry of Strategy
and Finance(MOSF)
Consultation Paper
Exposure Drafts
Legislation of National
Accounting Standards,
Technical Release
National Accounting
System Deliberation
Committee(NASDC)
Pre-announce
ment of
legislation

8. 7
F/S
by accounts and
funds
Agency F/S Consolidated F/S
Eliminating
intra-governmental
transactions between
accounts and funds
•Eliminating intra-governmental
transactions between agencies
•Integrating of the national fund account
•Adjusting tax revenues
•Deduction of intra-governmental
holdings of national and public bonds
Central Gov. Agencies MOSF
Nat’l Assembly
Audit by BAI
Pursuant to National Accounting Act,
Ministry of Strategy and Finance(MOSF) consolidates agency
financial reports to produce the Consolidated Financial Report.
After having it audited by Board of Audit & Inspection, MOSF
submits the Consolidated Financial Report to the National Assembly.
Ⅳ. Financial Statements preparation process

9. 8
Statement of Financial Position as of FY 2013
Statement of Financial Operations
Current Assets
Investments
Property, Plant and Equipment
Infrastructure Assets
Intangible Assets
Other Non-Current Assets
291.1
563.1
508.6
294.4
1.2
7.9
Current liabilities
Long-Term Debts
Provisions for Pension
Other Provisions
Other Non-Current Liabilities
108.6
347.8
596.3
37.5
27.7
Total Liabilities 1,117.9
Total Assets 1,666.3 Net Assets 548.4
(in trillions of won)
(in trillions of won)
Net Operating Costs
Non-Exchange Revenues
275.3
246.5
Fiscal Operating Results 28.8
V. Achievement and Future Challenges

10. V. Achievement and Future Challenges
9
 On-spot inspection and evaluation on SOC such as
roads, dams, and ports
 Asset Revaluation of Fixed Asset
Infrastructure Asset
 Phase-in adoption of Recognition for Pension
Liability (VBO -> ABO -> PBO)
Pension Provision
FY 2011 FY 2012
342.1
436.9
94.8
FY FY 2013
596.3
159.4
Investment
34%
Others
18%
Fixed
Asset
30%
SOC
18%

11. V. Achievement and Future Challenges
10
Improvement of Financial
Statement Reporting
Informal
Intuitive
Enhancement of
effectiveness of financial
information
Enhance effective usage in
cost management
Better link financial
information with fiscal
system
Promote cooperation
between central and local
governments