S.Korea to require firms to disclose land at official prices in 2026 accounts
In short
South Korea's Financial Services Commission finalized an amendment to accounting standard K-IFRS 1016 that requires companies using the cost model to disclose the officially published price of their land in the notes to their financial statements. The rule takes effect for the business year ending December 2026, and excludes land with no statutory official price and land held overseas. Analysts cited by Yonhap expect the gap between market values and book values to surface and shareholder demands for asset revaluation to increase, with “hidden land-rich” listed companies seen as beneficiaries.
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South Korea's Financial Services Commission finalized an amendment to corporate accounting standard K-IFRS 1016 on property, plant and equipment on September 23, Yonhap reported, citing the financial investment industry. Under the amended standard, companies applying the cost model must disclose the officially published price of their land — the value set under the Act on Public Announcement of Real Estate Prices — in the notes to their financial statements, Yonhap said. Chosun Ilbo reported that the value of land held by companies will become transparently verifiable from this year's year-end settlement. [ 1 , 2 ]
The requirement does not apply to land for which no statutory official price exists or to land located overseas, according to Yonhap. Previously the standard only recommended disclosing fair value when it differed significantly from book value, and actual disclosures were rare, which drew criticism that changes in the real value of a company's assets were hard to judge, Yonhap reported. Because land acquired decades ago has been recorded at acquisition cost, a company's real price-to-book ratio can be lower than the ratio calculated from book value. [ 1 ]
“The potential upside from the gap between assets' current market prices and their book values will surface, and shareholder action demanding corporate value enhancement through revaluation is expected to become more active,” Um Su-jin, a researcher at Hanwha Investment & Securities, told Yonhap. She added that even if companies could previously ignore shareholder demands for revaluation, the confirmed rule requiring comparative disclosure of official land prices in the notes from the fiscal year ending December 2026 would make it hard to keep delaying the revaluation of undervalued assets in their statements. Chosun Ilbo likewise reported that shareholder action seeking higher corporate value through asset revaluation is expected to pick up. [ 1 , 2 ]
Yonhap said the types to watch are companies with large non-operating buildings and land, those holding many general-purpose operating assets, and those whose core operating assets are unlikely to be sold but offer significant revaluation upside. Um said investors should focus on companies among low price-to-book asset stocks that own prime real estate, adding that shares matching those three categories would benefit from the regulatory change, according to Yonhap. [ 1 ]
Why it matters
The change makes the market value of land that listed companies have long carried at acquisition cost visible to outside investors, which the documents say could lower the effective price-to-book ratio of some firms and give minority shareholders a clearer basis for demanding revaluation. Both reports frame the rule as a potential boost for undervalued asset-heavy stocks, though any revaluation decisions by companies remain predictions rather than announced plans.
Key facts
- The Financial Services Commission finalized an amendment to corporate accounting standard K-IFRS 1016 on property, plant and equipment on September 23, according to Yonhap. [ 1 ]
- Companies applying the cost model must disclose the officially published price of their land in the notes, starting with the business year ending December 2026. [ 1 ]
- Land for which no statutory official price exists and land located overseas are excluded from the requirement. [ 1 ]
- Under the previous standard, disclosing fair value when it differed significantly from book value was only recommended, and such disclosures were rare. [ 1 ]
- A Hanwha Investment & Securities analyst said the gap between current market prices and book values would become visible and that shareholder action seeking revaluation could become more active. [ 1 ]
- The analyst named as potential beneficiaries companies holding large non-operating buildings and land, those with many general-purpose operating assets, and those whose core operating assets are unlikely to be sold but carry revaluation upside. [ 1 ]
- Chosun Ilbo reported that the value of land held by companies will be transparently verifiable from this year's year-end settlement, and that the financial investment industry sees “hidden land-rich” listed companies as beneficiaries. [ 2 ]
Confirmed by several sources
- Companies will have to disclose the official publicly announced price of their land in financial statement notes, beginning with the year-end settlement for the 2026 fiscal year. [ 1 , 2 ]
- The financial investment industry expects shareholder action pressing for asset revaluation, and stocks of companies holding valuable land, to gain momentum as a result. [ 1 , 2 ]
Still unclear
- Whether companies will actually revalue undervalued assets and reflect realized values in their balance sheets This is the prediction of a single analyst at Hanwha Investment & Securities, cited by Yonhap; no company or regulator is quoted committing to revaluation.
- The detailed mechanics of the disclosure requirement Only Yonhap describes the contents of the amendment, including the treatment of land with no official price and overseas land; Chosun Ilbo's report is a summary that does not cover these details.