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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] The Financial Supervisory Service (FSS) announced that it will seek expert opinions on the accounting treatment of Samsung Life Insurance’s affiliate shareholdings.
According to financial authorities on August 19, the FSS plans to hold a closed-door meeting on August 21 with accounting professionals and academics to discuss how life insurers should classify their affiliate equity holdings. The key issue is whether these holdings should continue to be recorded under “policyholder equity adjustment” or be reclassified as insurance liabilities.
Under IFRS 17, the new international accounting standard for insurers introduced in 2023, any gains from the disposal of Samsung Life’s 8.51% stake in Samsung Electronics should, in principle, be recognized as insurance liabilities to reflect future profit-sharing with participating policyholders.
However, the FSS has granted an exception, allowing Samsung Life to continue recording such profit-sharing resources under the “policyholder equity adjustment” item, citing concerns that reclassification could mislead users of financial statements.
As of the end of June 2025, Samsung Life’s policyholder equity adjustment stood at KRW 8.95 trillion. Meanwhile, controversy has recently emerged as the Korea Accounting Standards Board and political circles raised questions about the accounting of Samsung Life’s stake in Samsung Fire & Marine Insurance. Critics argue that despite holding a 15.43% stake, Samsung Life should apply the equity method of accounting after officially designating Samsung Fire as a subsidiary in March 2025 under the Insurance Business Act.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
