| Pub. Date | : October, 2021 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP381021 |
| Author Name | : K B S Kumar |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 9 |
Samsung BioLogics, South Korea-based biopharmaceutical company, was established in 2011, as a future growth engine of conglomerate Samsung Group. The company, one of the largest contract manufacturers in the country, operated through three domestic plants. The case is about the accounting of Bioepis, a joint venture between BioLogics and US-based biotechnology company Biogen that was started in 2012 as an 85:15 joint venture.
In November 2018, Kim Yong-beom (Kim), chairman of South Korea's finance regulator,
Securities and Futures Commission (SFC), announced, "We concluded that the company
violated accounting standards intentionally in 2015 to have legitimacy in changing its
controlling power [in its affiliate]."1 The company Kim was referring to was Samsung BioLogics
Co Ltd. (BioLogics), South-Korea-based manufacturer of biopharmaceuticals.
The violation that SFC2 cited referred to the way BioLogics accounted Samsung Bioepis
(Bioepis), its research joint venture with US-based Biogen. Bioepis was accounted at a book
value of KRW 330 mn (1 US$ = KRW or Korean Won 1105 in January 2015) till 2014. In
2015, it was valued at a market value of KRW 4.5 tn, which inflated the earnings of Samsung