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Changes in Accounting Policies (Tables) | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Summary of Impact on Financial Statements Due to Application of IFRS 15 at the Date of Initial Application | The impact on the financial statements due to the application of IFRS 15 at the date of initial application (January 1, 2018) is as follows:
|  | January 1, 2018 |
(In millions of Korean won) |  | Before application of IFRS 15 (*) |  |  | Adjustment |  |  | After application of IFRS 15 |
Current assets |  | ￦ | 9,828,525 |  |  | ￦ | 1,288,908 |  |  | ￦ | 11,117,433 |
Trade and other receivables |  |  | 5,964,565 |  |  |  | 4,475 |  |  |  | 5,969,040 |
Inventories |  |  | 642,027 |  |  |  | — |  |  |  | 642,027 |
Other current assets1,2 |  |  | 304,860 |  |  |  | 1,284,433 |  |  |  | 1,589,293 |
Others |  |  | 2,917,073 |  |  |  | — |  |  |  | 2,917,073 |
Non-current assets |  |  | 20,067,196 |  |  |  | 68,060 |  |  |  | 20,135,256 |
Trade and other receivables |  |  | 828,832 |  |  |  | (2,285 | ) |  |  | 826,547 |
Deferred income tax assets |  |  | 712,222 |  |  |  | (352,273 | ) |  |  | 359,949 |
Other non-current assets1,2 |  |  | 107,165 |  |  |  | 422,618 |  |  |  | 529,783 |
Others |  |  | 18,418,977 |  |  |  | — |  |  |  | 18,418,977 |
Total assets |  | ￦ | 29,895,721 |  |  | ￦ | 1,356,968 |  |  | ￦ | 31,252,689 |
Current liabilities |  | ￦ | 9,474,162 |  |  | ￦ | 269,893 |  |  | ￦ | 9,744,055 |
Trade and other payables |  |  | 7,426,088 |  |  |  | 297 |  |  |  | 7,426,385 |
Deferred revenue |  |  | 17,906 |  |  |  | 33,655 |  |  |  | 51,561 |
Provisions |  |  | 78,172 |  |  |  | 177 |  |  |  | 78,349 |
Other current liabilities1 |  |  | 258,315 |  |  |  | 235,764 |  |  |  | 494,079 |
Others |  |  | 1,693,681 |  |  |  | — |  |  |  | 1,693,681 |
Non-current liabilities |  |  | 7,238,205 |  |  |  | 80,236 |  |  |  | 7,318,441 |
Deferred revenue |  |  | 91,698 |  |  |  | 23,831 |  |  |  | 115,529 |
Deferred income tax liabilities |  |  | 128,462 |  |  |  | 6,905 |  |  |  | 135,367 |
Other non-current liabilities1 |  |  | 237,283 |  |  |  | 49,500 |  |  |  | 286,783 |
Others |  |  | 6,780,762 |  |  |  | — |  |  |  | 6,780,762 |
Total liabilities |  | ￦ | 16,712,367 |  |  | ￦ | 350,129 |  |  | ￦ | 17,062,496 |
Equity attribute to owners of the Controlling Company |  | ￦ | 11,791,590 |  |  | ￦ | 929,866 |  |  | ￦ | 12,721,456 |
Non-controlling interest |  |  | 1,391,764 |  |  |  | 76,973 |  |  |  | 1,468,737 |
Total equity |  | ￦ | 13,183,354 |  |  | ￦ | 1,006,839 |  |  | ￦ | 14,190,193 |
| (*) | The amounts in this column are before the adjustments from the adoption of IFRS 9.
The effect of adoption of IFRS 15 on the consolidated financial statements for the year ended December 31, 2018, is as follows.
| - | Consolidated statement of financial position
|  | December 31, 2018 |
(In millions of Korean won) |  | Reported Amount (*) |  |  | Adjustments |  |  | Amount before application of IFRS 15 |
Current assets |  | ￦ | 12,157,814 |  |  | ￦ | (1,335,128 | ) |  | ￦ | 10,822,686 |
Trade and other receivables |  |  | 5,680,349 |  |  |  | 7,141 |  |  |  | 5,687,490 |
Inventories |  |  | 1,074,634 |  |  |  | 53,035 |  |  |  | 1,127,669 |
Other current assets1,2 |  |  | 1,687,548 |  |  |  | (1,395,304 | ) |  |  | 292,244 |
Others |  |  | 3,715,283 |  |  |  | — |  |  |  | 3,715,283 |
Non-current assets |  |  | 20,316,306 |  |  |  | (87,432 | ) |  |  | 20,228,874 |
Trade and other receivables |  |  | 842,995 |  |  |  | 4,617 |  |  |  | 847,612 |
Deferred income tax assets |  |  | 465,369 |  |  |  | 356,928 |  |  |  | 822,297 |
Other non-current assets1,2 |  |  | 545,895 |  |  |  | (448,977 | ) |  |  | 96,918 |
Others |  |  | 18,462,047 |  |  |  | — |  |  |  | 18,462,047 |
Total assets |  | ￦ | 32,474,120 |  |  | ￦ | (1,422,560 | ) |  | ￦ | 31,051,560 |
Current liabilities |  | ￦ | 9,394,123 |  |  | ￦ | (318,260 | ) |  | ￦ | 9,075,863 |
Deferred revenue |  |  | 52,878 |  |  |  | (38,057 | ) |  |  | 14,821 |
Provisions |  |  | 117,881 |  |  |  | (565 | ) |  |  | 117,316 |
Other current liabilities1 |  |  | 596,589 |  |  |  | (279,638 | ) |  |  | 316,951 |
Others |  |  | 8,626,775 |  |  |  | — |  |  |  | 8,626,775 |
Non-current liabilities |  |  | 8,421,507 |  |  |  | (54,508 | ) |  |  | 8,366,999 |
Deferred revenue |  |  | 110,702 |  |  |  | (27,233 | ) |  |  | 83,469 |
Deferred income tax liabilities |  |  | 204,785 |  |  |  | (21,019 | ) |  |  | 183,766 |
Other non-current liabilities1 |  |  | 423,626 |  |  |  | (6,256 | ) |  |  | 417,370 |
Others |  |  | 7,682,394 |  |  |  | — |  |  |  | 7,682,394 |
Total liabilities |  | ￦ | 17,815,630 |  |  | ￦ | (372,768 | ) |  | ￦ | 17,442,862 |
Equity attribute to owners of the Controlling Company |  | ￦ | 13,129,901 |  |  | ￦ | (970,430 | ) |  | ￦ | 12,159,471 |
Non-controlling interest |  |  | 1,528,589 |  |  |  | (79,362 | ) |  |  | 1,449,227 |
Total equity |  | ￦ | 14,658,490 |  |  | ￦ | (1,049,792 | ) |  | ￦ | 13,608,698 |
| (*) | Amounts include adjustments arising from adoption of IFRS 9.
1 | Allocation the transaction price
With the implementation of IFRS 15, the Group allocates the transaction price to each performance obligation identified in the contract based on a relative stand-alone selling prices of the goods or services being provided to the customer. To allocate the transaction price to each performance obligation on a relative stand-alone price basis, the Group determines the stand-alone selling price at contract inception of the distinct goods or services underlying each performance obligation in the contract and allocate the transaction price in proportion to those stand-alone selling price. The stand-alone selling price is the price at which the Group would sell promised goods or services separately to the customer. The best evidence of a stand-alone selling price is the observable price of a goods or services when the Group sells that goods or services separately in similar circumstances and to similar customers. The Group recognizes the allocated amount as contract assets or contract liabilities, and amortizes it through the remaining period which is adjusted in operating income. In relation to this, as at December 31, 2018, contract assets and contract liabilities are increased by ￦398,797 million (January 1, 2018: ￦421,131 million) and ￦347,461 million (January 1, 2018: ￦282,836 million), respectively.
2 | Incremental costs of obtaining a contract
The Group pays the commission fees when new customer subscribe for telecommunication services. The incremental costs of obtaining a contract are those commission fees that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. According to IFRS 15, the Group recognizes as an asset the incremental cost of obtaining contract and amortize it through the contract period. However, as a practical expedient, the Group recognizes the incremental costs of obtaining a contracts as an expense when incurred if the amortization period of the asset is one year or less. In relation to this, prepaid expenses are increased by ￦1,444,822 million as at December 31, 2018 (January 1, 2018: ￦1,285,443 million).
| - | Consolidated statement of profit or loss
|  | 2018 |
(In millions of Korean won) |  | Reported Amount (*) |  |  | Adjustments |  |  | Amount before application of IFRS 15 |
Operating revenue |  | ￦ | 23,436,050 |  |  | ￦ | 268,270 |  |  | ￦ | 23,704,320 |
Operating expenses |  |  | 22,335,190 |  |  |  | 316,495 |  |  |  | 22,651,685 |
Operating profit |  |  | 1,100,860 |  |  |  | (48,225 | ) |  |  | 1,052,635 |
Financial income |  |  | 374,243 |  |  |  | (3,862 | ) |  |  | 370,381 |
Financial costs |  |  | 435,659 |  |  |  | 16,860 |  |  |  | 452,519 |
Share of net losses of associates and joint venture |  |  | (5,467 | ) |  |  | — |  |  |  | (5,467 | )
Profit before income tax |  |  | 1,033,977 |  |  |  | (68,947 | ) |  |  | 965,030 |
Income tax expense |  |  | 314,565 |  |  |  | (17,944 | ) |  |  | 296,621 |
Profit for the year |  | ￦ | 719,412 |  |  | ￦ | (51,003 | ) |  | ￦ | 668,409 |
(*) | Amounts include adjustments arising from adoption of IFRS 9.
Summary of Beginning Balance of Retained Earnings after Adjustment Due to Application of IFRS 9 | Details of the Group’s beginning balance of retained earnings after adjustment due to application of IFRS 9, are as follows:
(In millions of Korean won) |  | January 1, 2018 |
Beginning balance — IAS 39 |  | ￦ | 9,961,150 |
Reclassification of available-for-sale securities to financial assets at fair value through profit or loss |  |  | 32,754 |
Reclassification of available-for-sale securities to financial assets at fair value through other comprehensive income |  |  | 2,191 |
Increase in provision for impairment of financial assets at amortized cost |  |  | (1,817 | )
Increase in provision with unused limit |  |  | (287 | )
Decrease in deferred income tax assets |  |  | (8,395 | )
Adjustments of non-controlled interests |  |  | (259 | )
Adjustments to retained earnings from adoption of IFRS 9 |  |  | 24,187 |
Beginning balance of retained earnings — IFRS 9 |  |  | 9,985,337 |
Adjustment to retained earnings from adoption of IFRS 15 |  |  | 929,866 |
Beginning balance of retained earnings after adjustment |  | ￦ | 10,915,203 |
Summary of Effects Resulting from Classification and Measurement of Financial Instruments | The main effects resulting from this reclassification are as follows:
(In millions of Korean won) |  |  |  | Classification in accordance with |  |  |  | Amount in accordance with |
Account |  |  |  | IAS 39 |  |  |  | IFRS 9 |  |  |  | IAS 39 |  |  |  |  | IFRS 9 |  |  |  |  | Differences |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalent |  |  |  | Loans and receivables |  |  |  | Financial assets measured at amortized cost |  |  |  | ￦ | 1,928,182 |  |  |  |  | ￦ | 1,928,182 |  |  |  |  | ￦ | — |
Trade and other receivables |  |  |  | Loans and receivables |  |  |  | Financial assets measured at amortized cost |  |  |  |  | 6,793,397 |  |  |  |  |  | 5,836,089 |  |  |  |  |  | (1,028 | )
|  |  |  |  |  |  |  | Financial assets at fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |  | 980,766 |  |  |  |  |  | 24,486 |
Other financial assets |  |  |  | Loans and receivables |  |  |  | Financial assets measured at amortized cost |  |  |  |  | 1,333,317 |  |  |  |  |  | 462,075 |  |  |  |  |  | (789) |
| Financial assets at fair value through profit or loss |  |  |  |  |  |  | 870,453 |  |  |  | — |
|  |  | Financial assets at fair value through profit or loss |  |  |  | Financial assets at fair value through profit or loss |  |  |  |  | 5,813 |  |  |  |  |  | 5,813 |  |  |  |  |  | — |
|  |  | Derivative financial assets for hedging purpose |  |  |  | Derivative financial assets for hedging purpose |  |  |  |  | 7,389 |  |  |  |  |  | 7,389 |  |  |  |  |  | — |
|  |  | Financial assets available-for-sale |  |  |  | Financial assets measured at amortized cost |  |  |  |  |  |  |  |  |  |  | 28,603 |  |  |  |  |  | — |
| Financial assets at fair value through profit or loss |  |  | 380,953 |  |  |  | 127,276 |  |  |  | 32,745 |
| Financial assets at fair value through other comprehensive income |  |  |  |  |  |  | 259,904 |  |  |  | 2,085 |
|  |  | Financial assets held-to-maturity |  |  |  | Financial assets measured at amortized cost |  |  |  |  |  |  |  |  |  |  | 51 |  |  |  |  |  | — |
| Financial assets at fair value through profit or loss |  |  | 151 |  |  |  | 100 |  |  |  | — |
| Financial assets at fair value through other comprehensive income |  |  |  |  |  |  | — |  |  |  | — |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade payables and payables |  |  |  | Other financial liabilities measured at amortized cost |  |  |  | Financial assets measured at amortized cost |  |  |  |  | ￦8,427,457 |  |  |  |  |  | ￦8,427,457 |  |  |  |  |  | ￦— |
Borrowing |  |  |  | Other financial liabilities measured at amortized cost |  |  |  | Financial assets measured at amortized cost |  |  |  |  | 6,683,662 |  |  |  |  |  | 6,683,662 |  |  |  |  |  | — |
Other financial liabilities |  |  |  | Financial liabilities at fair value through profit or loss |  |  |  | Financial liabilities at fair value through profit or loss |  |  |  |  | 5,051 |  |  |  |  |  | 5,051 |  |  |  |  |  | — |
Other financial liabilities |  |  |  | Derivative financial liabilities for hedging purpose |  |  |  | Derivative financial liabilities for hedging purpose |  |  |  |  | 93,770 |  |  |  |  |  | 93,770 |  |  |  |  |  | — |
Other financial liabilities (*) |  |  |  | Other financial liabilities measured at amortized cost |  |  |  | Financial assets measured at amortized cost |  |  |  |  | 89,104 |  |  |  |  |  | 89,391 |  |  |  |  |  | 287 |
(*) | The amount includes provisions of which loss allowance is remeasured due to adoption of IFRS 9.
Summary of Impact on Changes in Equity | The impact on these changes on the Group’s equity as at January 1, 2018, is as follows:
(In millions of Korean won) |  | Accumulated other comprehensive income |  |  | Retained earnings |
Reclassification from loans and receivables to financial assets at fair value through other comprehensive income, and fair value assessment |  | ￦ | 24,486 |  |  | ￦ | — |
Reclassification from available-for-sale financial assets to financial assets at fair value through profit or loss, and fair value assessment |  |  | (9 | ) |  |  | 32,754 |
Reclassification from available-for-sale financial assets to financial assets at fair value through other comprehensive income |  |  | (106 | ) |  |  | 2,191 |
Increase in provision for impairment of financial assets at amortized cost |  |  | — |  |  |  | (1,817 | )
Increase in provision with unused limit |  |  | — |  |  |  | (287 | )
Income tax effect |  |  | (6,734 | ) |  |  | (8,395 | )
Adjustments of non-controlled interests |  |  | 104 |  |  |  | (259 | )
Total adjustments from application of IFRS 9 |  | ￦ | 17,741 |  |  | ￦ | 24,187 |

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