The "Asset revaluation Law“ which was established in 1958 to overcome the inflation in Korea was amended a few times and was abolished on December 31th, 2000.
According to literature review the pros of asset revaluation can be summarized as follows. Asset revaluation reflect management's attempt to comply with the requirement of company law that financial statement present "true and fair view ; asset revaluation lower the debt-to-equity ratio, loosen debt constraints, and enhance financial flexibility. In the hand, asset revaluation has various practical problems regarding true value of accounting numbers as follow: Accounting numbers can be manipulated by managers. This is because some of the numbers valued current market value but others are not.
This study focused resumption of asset revaluation. For the purpose, analyzes the change of the financial ratios affected by asset revaluation in the period 1991-2000 and question survey of firms that have revalued assets.
The "Asset revaluation Law“ law that has existed for 40 years was abolished at the end of 2000. But it is not clear how the economic conditions, - such as inflation, fluctuation rate of land price, and so on - affect to companies. In addition, many companies want asset revaluation law to be activated again. Thus, there should be more studies about application to IAS through the inflation accounting including asset revaluation.embodies a grand scale land development project and provides brief overview of the system.