Jennifer Jae-Young Kim
Korea University
Jaeyon Chu
Hannam University
Kyongsun Heo
Jinhan Pae



Samsung BioLogics recognized a big valuation gain when it lost control over a biosimilar joint venture. The investment community expressed concerns about the revaluation gain because the loss of control of the joint venture was attributable to potential voting rights held by the joint venture partner and Samsung BioLogics had incentives to present higher profitability prior to IPO. We suggest the following: (1) timely and full disclosure of the potential voting rights; (2) extensive disclosure about the fair value estimate; (3) a conservative recognition of valuation gains; and (4) a periodic assessment of potential impairment of fair value estimates.