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Business Combination (Tables) | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Summary of Business Combination | Details of the business combination are as follows:
(In millions of Korean won) |  | Business line |  | Date |  | Purchase consideration |
SG Safety Corporation |  | Unmanned security business |  | May 31, 2018 |  | ￦ | 27,544 |
KT MOS Bukbu Co., Ltd. |  | Telecommunication facility maintenance |  | September 30, 2018 |  |  | 8,160 |
KT MOS Nambu Co., Ltd. |  | Telecommunication facility maintenance |  | September 30, 2018 |  |  | 6,310 |
CJ Digital Music Co., Ltd. |  | Music distribution |  | October 10, 2018 |  |  | 50,948 |
Fair value of the purchase consideration from the business combination is as follows:
(In millions of Korean won) |  | SG Safety Corporation |  |  | KT MOS Bukbu Co., Ltd |  |  | KT MOS Nambu Co., Ltd. |  |  | CJ Digital Music Co., Ltd. |
Cash and cash equivalents |  | ￦ | 28,000 |  |  | ￦ | 6,283 |  |  | ￦ | 4,765 |  |  | ￦ | — |
Settled receivables1 |  |  | (456 | ) |  |  | — |  |  |  | — |  |  |  | — |
Fair value of equity instruments previously held2 |  |  | — |  |  |  | 1,877 |  |  |  | 1,545 |  |  |  | — |
Fair value of equity instruments newly issued3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 50,948 |
Total |  | ￦ | 27,544 |  |  | ￦ | 8,160 |  |  | ￦ | 6,310 |  |  | ￦ | 50,948 |
1 | Uncollected amount which incurred after the payment of consideration from adjustment of purchase consideration caused by additional retirement benefit.
2 | The shares previously held by KT MOS Bukbu Co., Ltd. (93,994 ordinary shares) and KT MOS Nambu Co., Ltd. (65,831 ordinary shares), non-listed entities, were evaluated by using the profit approach.
3 | The fair value (￦50,948 million) of 8,992,685 ordinary shares of GENIE Music Corporation, the consideration transferred, was based on the share price disclosed at the merger date. The issuance cost amounting to ￦31 million were deducted from deemed issuance price.
Schedule of Fair Value of Assets and Liabilities Recognized as a Result of Acquisition at Acquisition Date | Fair value of the assets and liabilities recognized as a result of the acquisition at the acquisition date are as follows:
(In millions of Korean won) |  | SG Safety Corporation |  |  | KT MOS Bukbu Co., Ltd |  |  | KT MOS Nambu Co., Ltd. |  |  | CJ Digital Music Co., Ltd. |
Recognized amounts of identifiable assets acquired |  | ￦ | 17,763 |  |  | ￦ | 14,924 |  |  | ￦ | 12,242 |  |  | ￦ | 28,117 |
Cash and cash equivalents |  |  | — |  |  |  | 7,864 |  |  |  | 3,340 |  |  |  | 1,556 |
Trade and other receivables |  |  | — |  |  |  | 4,827 |  |  |  | 6,318 |  |  |  | 11,200 |
Other current assets |  |  | 1,367 |  |  |  | 160 |  |  |  | 85 |  |  |  | 484 |
Inventories |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5 |
Current income tax assets |  |  | — |  |  |  | — |  |  |  | 75 |  |  |  | — |
Property and equipment |  |  | 4,047 |  |  |  | 855 |  |  |  | 1,104 |  |  |  | 791 |
Intangible assets |  |  |  |  |  |  | 997 |  |  |  | 478 |  |  |  | 1,860 |
Distribution agency contract (included in intangibles) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,753 |
Contractual customer relationship (included in intangibles) |  |  | 10,467 |  |  |  | — |  |  |  | — |  |  |  | 468 |
Deferred income tax assets |  |  | — |  |  |  | 113 |  |  |  | 576 |  |  |  | — |
Other non-current assets |  |  | 1,882 |  |  |  | 10 |  |  |  | — |  |  |  | — |
Other non-current financial assets |  |  | — |  |  |  | 98 |  |  |  | 266 |  |  |  | — |
Recognized amounts of identifiable liabilities assumed |  |  | 5,637 |  |  |  | 10,050 |  |  |  | 6,433 |  |  |  | 25,559 |
Trade and other payables |  |  | 120 |  |  |  | 6,767 |  |  |  | 3,327 |  |  |  | 18,947 |
Borrowings |  |  | 5,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Other current liabilities |  |  | — |  |  |  | 363 |  |  |  | 703 |  |  |  | 3,481 |
Current income tax liabilities |  |  | — |  |  |  | 103 |  |  |  | — |  |  |  |  |
Post-employment benefit obligations |  |  | 517 |  |  |  | 2,768 |  |  |  | 2,360 |  |  |  | 311 |
Deferred income tax liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,497 |
Other non-current liabilities |  |  | — |  |  |  | 49 |  |  |  | 43 |  |  |  | 323 |
Total |  | ￦ | 12,126 |  |  | ￦ | 4,874 |  |  | ￦ | 5,809 |  |  | ￦ | 2,558 |
Schedule of Recognized Goodwill as a Result of Business Combination | As at December 31, 2018, details of the recognized goodwill as a result of the business combination are as follows:
(In millions of Korean won) |  | SG Safety Corporation |  |  | KT MOS Bukbu Co., Ltd |  |  | KT MOS Nambu Co., Ltd. |  |  | CJ Digital Music Co., Ltd. |
Purchase consideration |  | ￦ | 27,544 |  |  | ￦ | 8,160 |  |  | ￦ | 6,310 |  |  | ￦ | 50,948 |
Add: Non-controlling interests1 |  |  | — |  |  |  | — |  |  |  | 101 |  |  |  | — |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of identifiable net assets |  |  | 12,126 |  |  |  | 4,874 |  |  |  | 5,809 |  |  |  | 2,558 |
Goodwill2 |  | ￦ | 15,418 |  |  | ￦ | 3,286 |  |  | ￦ | 602 |  |  | ￦ | 48,390 |
| 1 | Non-controlling interests for KT MOS Nambu Co., Ltd. acquired during the year ended December 31, 2018 are measured at proportionate shares of acquiree’s identifiable net assets.
| 2 | The goodwill from the business combination is attributable to economies of scale expected and the acquired customer relationships.
Schedule of Cash Outflows as a Result of Acquisition | Details of cash outflows as a result of acquisition are as follows:
(In millions of Korean won) |  | SG Safety Corporation1 |  |  | KT MOS Bukbu Co., Ltd |  |  | KT MOS Nambu Co., Ltd. |  |  | CJ Digital Music Co., Ltd. |
Purchase consideration |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash1 |  | ￦ | 28,000 |  |  | ￦ | 6,283 |  |  | ￦ | 4,765 |  |  | ￦ | — |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recognized amounts of cash and cash equivalents |  |  | — |  |  |  | 7,864 |  |  |  | 3,340 |  |  |  | 1,556 |
Total |  | ￦ | 28,000 |  |  | ￦ | (1,581 | ) |  | ￦ | 1,425 |  |  | ￦ | (1,556 | )

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