Financial Supervisory Service Begins Digitizing Financial Statement Notes Data to "Improve Information Asymmetry"

[Asia Economy Reporter Minji Lee] The Financial Supervisory Service (FSS) has embarked on standardizing and digitizing notes to financial statements to provide investors with useful financial information of listed companies.

According to materials released by the FSS on the 28th, starting from the 2021 fiscal year business reports, they plan to acquire and utilize notes data and implement technological improvements such as enhancing the DART system.

The FSS stated, "While DART opens the main body of financial statements such as the balance sheet, income statement, and cash flow statement in a data format that is easy to analyze, the notes to financial statements are difficult to freely compare and analyze between companies," adding, "To address this, we will work with external experts to develop a standardized system and preparation rules for notes to financial statements."

To this end, the FSS plans to develop major standardized systems this year based on the International Accounting Standards Board (IASB) international standards, considering overseas disclosure cases of domestic companies, and prepare preparation rules that can be expanded to fit corporate circumstances. Additionally, they will require adherence to the standardized system when preparing both the main body and notes of financial statements and establish measures to strengthen data quality to enhance the reliability of financial data.

Subsequently, the FSS will develop an XBRL authoring tool to enable companies to prepare financial statements according to the notes standard system, and build a SuperTech system that can combine this data with internal and external information for supervisory purposes.

The FSS views this as an opportunity to improve information asymmetry. General investors will be able to easily analyze listed companies' financial statements and notes using Excel and other tools, reducing the cost of financial analysis. They also expect qualitative improvements in financial soundness evaluations through the notes data of financial statements.

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