South Korea loosens the biotech accounting rules

22 November 2018

GMP News

South Korea’s financial regulator announced it will give biotechnology and pharmaceutical companies leeway on listing rules, after allowing them to voluntarily restate accounting errors.

According to Choi Jong Ku, chairman of the Financial Services Commission (FSC), promising biotechnology and pharmaceutical firms will not be designated by the Korea Exchange as an “administrative issue” even if they post an operating loss for the fourth consecutive year.

The leeway on listing rules is aimed at resolving uncertainties when biotechnology and pharmaceutical firms restate their accounting errors. Amid a lack of clear supervisory rules on the industry’s accounting practices, the FSC allowed biotechnology and pharmaceutical firms to voluntarily restate accounting mishaps in September.

The FSC also decided not to impose penalties against their accounting errors related to research and development (R&D) spending. Instead, the FSC said it will encourage the firms to correct accounting errors and allow them to treat R&D spending as an asset if a new drug is technically viable.

South Korea’s financial regulator announced it will give biotechnology and pharmaceutical companies leeway on listing rules, after allowing them to voluntarily restate accounting errors.

According to Choi Jong Ku, chairman of the Financial Services Commission (FSC), promising biotechnology and pharmaceutical firms will not be designated by the Korea Exchange as an “administrative issue” even if they post an operating loss for the fourth consecutive year.

The leeway on listing rules is aimed at resolving uncertainties when biotechnology and pharmaceutical firms restate their accounting errors. Amid a lack of clear supervisory rules on the industry’s accounting practices, the FSC allowed biotechnology and pharmaceutical firms to voluntarily restate accounting mishaps in September.

The FSC also decided not to impose penalties against their accounting errors related to research and development (R&D) spending. Instead, the FSC said it will encourage the firms to correct accounting errors and allow them to treat R&D spending as an asset if a new drug is technically viable.

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