Accounting Standards for Derivatives in Korea: A Comparison with U.S. GAAP and International Accounting Standards (Generally Accepted Accounting Principles‪)‬

ABSTRACT The rapid changes during last several years in size and diversity of the Korean derivative market may warrant the introduction of new accounting standards for derivatives in Korea. One feasible and effective way to obtain ideas for new standards fitting into Korea derivative market is to compare Korean, US, and international accounting standards for derivatives. Thus, the objectives of this paper are two-fold. The first is to make a comparison between Korean, US, and international accounting standards for derivatives. The second is to make a recommendation for new accounting standards for derivatives in Korea. To achieve these objectives, the following steps were taken. First, compare current Korean, US, and international accounting standards for derivatives. Secondly, a literature survey on this issue of derivative accounting and examination on current trading practice of derivatives in Korea were conducted to draw an insightful inference for derivative accounting standards setting process. Finally, make a recommendation for new accounting standards for derivatives in Korea. Potential contributions of this study would be to setting new accounting standards for derivatives in Korea and to developing a general body of knowledge that provides meaning insights to accounting standards for derivatives.