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Other Financial Assets and Liabilities | 12 Months Ended
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Dec. 31, 2023
Text block [abstract] |
Other Financial Assets and Liabilities |
7 | Other Financial Assets and Liabilities
(1) Details of other financial assets and liabilities as of December 31, 2022 and 2023, are as follows:
(in millions of Korean won) |  | December 31, 2022 |  |  | December 31, 2023 |
Other financial assets |  |  |  |  |  |  |  |
Financial assets at amortized cost 1 |  | ￦ | 1,060,058 |  |  | ￦ | 1,385,921 |
Financial assets at fair value through profit or loss 1,2 |  |  | 1,064,856 |  |  |  | 939,661 |
Financial assets at fair value through other comprehensive income |  |  | 1,508,192 |  |  |  | 1,680,168 |
Derivatives used for hedging |  |  | 190,830 |  |  |  | 159,211 |
Less: Non-current |  |  | (2,501,484 | ) |  |  | (2,724,761 | )
Current |  | ￦ | 1,322,452 |  |  | ￦ | 1,440,200 |
Other financial liabilities |  |  |  |  |  |  |  |
Financial liabilities at amortized cost 3 |  | ￦ | 246,606 |  |  | ￦ | 915,185 |
Financial liabilities at fair value through profit or loss |  |  | 141,280 |  |  |  | 136,106 |
Derivatives used for hedging |  |  | 33,555 |  |  |  | 24,547 |
Less: Non-current |  |  | (412,650 | ) |  |  | (753,739 | )
Current |  | ￦ | 8,791 |  |  | ￦ | 322,099 |
1 | As of December 31, 2023, the Group’s other financial assets amounting to ￦ 98,309 million (December 31, 2022: ￦ 102,215 million), which consist of checking account deposits, time deposits and others, are subject to withdrawal restrictions.
2 | As of December 31, 2023, the Group provided investments in Korea Software Financial Cooperative amounting to ￦ 9,016 million as a collateral for the payment guarantee provided by the Cooperative.
3 | The amount includes liabilities related to the obligation to acquire additional shares in Epsilon Global Communications Pte. Ltd. and MILLIE Co., Ltd and KT Cloud Co., Ltd. (Note 19).
(2) Financial Assets at fair value through profit or loss
| 1) | Details of financial assets at fair value through profit or loss as of December 31, 2022 and 2023, are as follows:
(in millions of Korean won) |  | December 31, 2022 |  |  | December 31, 2023 |
Equity Instruments (Listed) |  | ￦ | 26,647 |  |  | ￦ | 13,911 |
Equity Instruments (Unlisted) |  |  | 72,517 |  |  |  | 42,185 |
Debt securities |  |  | 942,274 |  |  |  | 880,549 |
Derivatives held for trading 1 |  |  | 23,418 |  |  |  | 3,016 |
Total |  |  | 1,064,856 |  |  |  | 939,661 |
Less: non-current |  |  | (609,887 | ) |  |  | (782,143 | )
Current |  | ￦ | 454,969 |  |  | ￦ | 157,518 |
1 | According to a derivative arrangement with LS Marine Solution Co., Ltd. (formerly KT Submarine Co., Ltd.), derivative assets amounting to ￦ 1,015 million is included as of December 31, 2023. (Note 19).
2) The maximum exposure of debt instruments of financial assets recognized at fair value through profit or loss to credit risk is the carrying amount as of December 31, 2023. (3) Financial Assets at fair value through other comprehensive income 1) Details of financial assets at fair value through other comprehensive income as of December 31, 2022 and 2023, are as follows:
(in millions of Korean won) |  | December 31, 2022 |  |  | December 31, 2023 |
Equity Instruments (Listed) |  | ￦ | 1,006,476 |  |  | ￦ | 1,231,188 |
Equity Instruments (Unlisted) |  |  | 496,284 |  |  |  | 443,067 |
Debt securities |  |  | 5,432 |  |  |  | 5,913 |
Total |  |  | 1,508,192 |  |  |  | 1,680,168 |
Less: non-current |  |  | (1,508,192 | ) |  |  | (1,680,168 | )
Current |  | ￦ | — |  |  | ￦ | — |
2) Upon disposal of these equity investments, any balance within the accumulated other comprehensive income for these equity investments is not classified to profit or loss, but to retained earnings. Upon disposal of these debt investments, the remaining balance of the accumulated other comprehensive income of debt investments is reclassified to profit or loss. (4) Derivatives used for hedging 1) Details of valu a tion of derivatives used for hedging as of December 31, 2022 and 2023, are as follows:
|  | December 31, 2022 |  |  | December 31, 2023 |
(in millions of Korean won) |  | Assets |  |  | Liabilities |  |  | Assets |  |  | Liabilities |
Interest rate swap |  | ￦ | 4,236 |  |  | ￦ | — |  |  | ￦ | 1,530 |  |  | ￦ | 191 |
Currency swap 1 |  |  | 186,594 |  |  |  | 33,555 |  |  |  | 157,681 |  |  |  | 24,356 |
Total |  |  | 190,830 |  |  |  | 33,555 |  |  |  | 159,211 |  |  |  | 24,547 |
Less: non-current |  |  | (147,141 | ) |  |  | (33,555 | ) |  |  | (107,802 | ) |  |  | (23,696 | )
Current |  | ￦ | 43,689 |  |  | ￦ | — |  |  | ￦ | 51,409 |  |  | ￦ | 851 |
1 | The currency swap contract is to hedge the risk of variability in cash flow from the borrowings due to changes in interest rate and foreign exchange rate and the expected maximum period for the Group to be exposed to risks of cash flow fluctuation by hedged items is until September 7, 2034.
The entire fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months. 2) The valuation gains and losses on the derivatives contracts for the years ended December 31, 2021, 2022 and 2023, are as follows:
(in millions of Korean won) |  | 2021 |  |  | 2022 |  |  | 2023 |
Type of Transaction |  | Valuation gain |  |  | Valuation loss |  |  | Other comprehensive income 1 |  |  | Valuation gain |  |  | Valuation loss |  |  | Other comprehensive income 1 |  |  | Valuation gain |  |  | Valuation Loss |  |  | Other comprehensive income 1 |
Interest rate swap |  | ￦ | — |  |  | ￦ | — |  |  | ￦ | 1 |  |  | ￦ | 63 |  |  | ￦ | 490 |  |  | ￦ | 4,666 |  |  | ￦ | 48 |  |  | ￦ | — |  |  | ￦ | (2,945 | )
Currency swap |  |  | 203,961 |  |  |  | 7,206 |  |  |  | 191,569 |  |  |  | 154,611 |  |  |  | 20,723 |  |  |  | 79,781 |  |  |  | 45,709 |  |  |  | 162 |  |  |  | (27,273 | )
Currency forwards |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 754 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | ￦ | 203,961 |  |  | ￦ | 7,206 |  |  | ￦ | 191,570 |  |  | ￦ | 154,674 |  |  | ￦ | 21,213 |  |  | ￦ | 85,201 |  |  | ￦ | 45,757 |  |  | ￦ | 162 |  |  | ￦ | (30,218 | )
1 | The amounts directly reflected in equity are before adjustments of deferred income tax and allocation to the non-controlling interest.
3) The ineffective portion recognized in profit or loss on the cash flow hedges are valuation loss of ￦ 41 million for the year ended December 31, 2023 (2021: valuation gain of ￦ 11,825 million, 2022: valuation gain of ￦ 2,707 million). 4) The unsettled amount of derivative instruments for the years ended December 31, 2022 and 2023, are as follows: (i) Hedging instruments
(in millions of Korean won and thousands of foreign currencies) |  | 2022 |
|  |  |  |  |  |  | Book value of hedging instruments |  |  | Changes in fair value to calculate the ineffective portion of hedges |
Currency |  | Foreign currency |  |  | Contract amount |  |  | Assets |  |  | Liabilities |
USD |  |  | 2,111,509 |  |  | ￦ | 2,527,626 |  |  | ￦ | 160,243 |  |  | ￦ | 32,936 |  |  | ￦ | 170,856 |
JPY |  |  | 400,000 |  |  |  | 4,357 |  |  |  | — |  |  |  | 409 |  |  |  | (308 | )
SGD |  |  | 284,000 |  |  |  | 245,208 |  |  |  | 26,351 |  |  |  | — |  |  |  | 20,511 |
EUR |  |  | 7,700 |  |  |  | 10,283 |  |  |  | — |  |  |  | 210 |  |  |  | 129 |
KRW |  |  | — |  |  |  | 170,000 |  |  |  | 4,236 |  |  |  | — |  |  |  | 4,717 |
Total |  |  |  |  |  | ￦ | 2,957,474 |  |  | ￦ | 190,830 |  |  | ￦ | 33,555 |  |  | ￦ | 195,905 |
(in millions of Korean won and thousands of foreign currencies) |  | 2023 |
|  |  |  | Book value of hedging instruments |  |  | Changes in fair value to calculate the ineffective portion of hedges |
Currency |  | Foreign currency |  |  | Contract amount |  |  | Assets |  |  | Liabilities |
USD |  |  | 2,011,509 |  |  | ￦ | 2,417,473 |  |  | ￦ | 157,681 |  |  | ￦ | 23,465 |  |  | ￦ | 44,413 |
JPY |  |  | 400,000 |  |  |  | 4,357 |  |  |  | — |  |  |  | 660 |  |  |  | (162 | )
EUR |  |  | 7,700 |  |  |  | 10,283 |  |  |  | — |  |  |  | 231 |  |  |  | 381 |
KRW |  |  | — |  |  |  | 240,000 |  |  |  | 1,530 |  |  |  | 191 |  |  |  | 707 |
Total |  |  | — |  |  | ￦ | 2,672,113 |  |  | ￦ | 159,211 |  |  | ￦ | 24,547 |  |  | ￦ | 45,339 |
(ii) Hedged item
(in millions of Korean won) |  |  |  |  |  |
| 2022 |  |  | 2023 |
Currency |  | Book value of hedged items |  |  | Changes in fair value to calculate the ineffective portion of hedges |  |  | Cash flow hedge reserves 1 |  |  | Book value of hedged items |  |  | Changes in fair value to calculate the ineffective portion of hedges |  |  | Cash flow hedge reserves 1 |
USD |  | ￦ | 2,675,885 |  |  | ￦ | (170,010 | ) |  | ￦ | (13,947 | ) |  | ￦ | 2,593,707 |  |  | ￦ | (44,365 | ) |  | ￦ | (30,415 | )
JPY |  |  | 3,813 |  |  |  | 308 |  |  |  | 116 |  |  |  | 3,651 |  |  |  | 162 |  |  |  | 49 |
SGD |  |  | 267,843 |  |  |  | (18,720 | ) |  |  | 3,406 |  |  |  | — |  |  |  | — |  |  |  | — |
EUR |  |  | 10,404 |  |  |  | (121 | ) |  |  | 582 |  |  |  | 10,985 |  |  |  | (581 | ) |  |  | 158 |
KRW |  |  | 101,035 |  |  |  | (4,655 | ) |  |  | 4,385 |  |  |  | 239,944 |  |  |  | (596 | ) |  |  | 1,315 |
Total |  | ￦ | 3,058,980 |  |  | ￦ | (193,198 | ) |  | ￦ | (5,458 | ) |  | ￦ | 2,848,287 |  |  | ￦ | (45,380 | ) |  | ￦ | (28,893 | )
1 | The amount is after the deferred tax directly added or subtracted to the capital is reflected.
(5) Financial Liabilities at fair value through profit or loss 1) Details of financial liabilities at fair value through profit or loss as of December 31, 2022 and 2023, are as follows:
(in millions of Korean won) |  | December 31, 2022 |  |  | December 31, 2023 |
Derivatives held for trading 1,2 |  | ￦ | 141,280 |  |  | ￦ | 136,106 |
1 | In relation to the additional acquisition of shares of the equity method investee K Bank Inc in 2021, the Group has entered into a shareholder agreement with the shareholders of K Bank Inc. According to the shareholder agreement, if K Bank Inc fails to be listed on the terms agreed in the shareholder agreement, the shareholders of K Bank Inc may exercise their Drag-Along right to the Group and require the Group to sell all the shares owned by such shareholders in K Bank to third parties based on the guaranteed return agreed in the shareholder agreement. The shareholder agreement also includes a call option where, if the shareholders exercise their Drag-Along rights, the Group has an option to purchase the shares held by those shareholders. As of December 31, 2023, the derivative financial liability in accordance with IFRS 9 associated with the rights prescribed in the shareholders agreement was ￦ 133,293 million( ￦ 134,881 million as of December 31 2022).
2 | The amount includes derivatives separated from convertible bonds issued by the Group (Note 15).
2) The valuation gain and loss on financial liabilities at fair value through profit or loss for the years ended December 31, 2021, 2022 and 2023, are as follows:
|  | 2021 |  |  | 2022 |  |  | 2023 |
(in millions of Korean won) |  | Valuation gain |  |  | Valuation loss |  |  | Valuation gain |  |  | Valuation loss |  |  | Valuation gain |  |  | Valuation loss |
Derivatives liabilities held for trading |  | ￦ | 51,187 |  |  | ￦ | 8,741 |  |  | ￦ | 24,683 |  |  | ￦ | 1,800 |  |  | ￦ | 3,316 |  |  | ￦ | 10,710 |

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