20-F

As filed with the Securities and Exchange Commission on April 27, 2018

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report             

For the transition period from              to             

Commission file number 1-13368

POSCO

(Exact name of Registrant as specified in its charter)

POSCO	The Republic of Korea
(Translation of Registrant’s name into English)	(Jurisdiction of incorporation or organization)

POSCO Center, 440 Teheran-ro, Gangnam-gu

Seoul, Korea 06194

(Address of principal executive offices)

Lim, Sung-Su

POSCO Center, 440 Teheran-ro, Gangnam-gu

Seoul, Korea 06194

Telephone: +82-2-3457-1098; E-mail: s2blue@posco.com; Facsimile: +82-2-3457-1997

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Name of Each Exchange on Which Registered
American Depositary Shares, each representing one-fourth of one share of common stock	New York Stock Exchange, Inc.
Common Stock, par value Won 5,000 per share *	New York Stock Exchange, Inc. *

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

As of December 31, 2017, there were 79,999,604 shares of common stock, par value Won 5,000 per share, outstanding

(not including 7,187,231 shares of common stock held by the company as treasury shares)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ☒        No   ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐        No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒        No   ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☐        No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒        Accelerated filer ☐        Non-accelerated filer ☐        Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.    U.S. GAAP  ☐        IFRS  ☒        Other   ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ☐         Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐        No   ☒

* Not for trading, but only in connection with the registration of the American Depositary Shares.

TABLE OF CONTENTS

GLOSSARY			1
PART I			2
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGERS AND ADVISERS		2
	Item 1.A.	Directors and Senior Management	2
	Item 1.B.	Advisers	2
	Item 1.C.	Auditor	2
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		2
	Item 2.A.	Offer Statistics	2
	Item 2.B.	Method and Expected Timetable	2
ITEM 3.	KEY INFORMATION		2
	Item 3.A.	Selected Financial Data	2
	Item 3.B.	Capitalization and Indebtedness	4
	Item 3.C.	Reasons for Offer and Use of Proceeds	4
	Item 3.D.	Risk Factors	4
ITEM 4.	INFORMATION ON THE COMPANY		21
	Item 4.A.	History and Development of the Company	21
	Item 4.B.	Business Overview	21
	Item 4.C.	Organizational Structure	35
	Item 4.D.	Property, Plants and Equipment	35
	Item 4.E.	Unresolved Staff Comments	37
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		37
	Item 5.A.	Operating Results	37
	Item 5.B.	Liquidity and Capital Resources	71
	Item 5.C.	Research and Development, Patents and Licenses, Etc.	74
	Item 5.D.	Trend Information	74
	Item 5.E.	Off-balance Sheet Arrangements	75
	Item 5.F.	Tabular Disclosure of Contractual Obligations	75
	Item 5.G.	Safe Harbor	75
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		75
	Item 6.A.	Directors and Senior Management	75
	Item 6.B.	Compensation	78
	Item 6.C.	Board Practices	79
	Item 6.D.	Employees	80
	Item 6.E.	Share Ownership	81
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		83
	Item 7.A.	Major Shareholders	83
	Item 7.B.	Related Party Transactions	83
	Item 7.C.	Interests of Experts and Counsel	83
ITEM 8.	FINANCIAL INFORMATION		83
	Item 8.A.	Consolidated Statements and Other Financial Information	83
	Item 8.B.	Significant Changes	85
ITEM 9.	THE OFFER AND LISTING		85
	Item 9.A.	Offer and Listing Details	85

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	Item 9.B.	Plan of Distribution	87
	Item 9.C.	Markets	87
	Item 9.D.	Selling Shareholders	92
	Item 9.E.	Dilution	92
	Item 9.F.	Expenses of the Issuer	92
ITEM 10.	ADDITIONAL INFORMATION		92
	Item 10.A.	Share Capital	92
	Item 10.B.	Memorandum and Articles of Association	92
	Item 10.C.	Material Contracts	97
	Item 10.D.	Exchange Controls	97
	Item 10.E.	Taxation	102
	Item 10.F.	Dividends and Paying Agents	107
	Item 10.G.	Statements by Experts	107
	Item 10.H.	Documents on Display	107
	Item 10.I.	Subsidiary Information	107
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		107
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		109
	Item 12.A.	Debt Securities	109
	Item 12.B.	Warrants and Rights	110
	Item 12.C.	Other Securities	110
	Item 12.D.	American Depositary Shares	110
PART II			111
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		111
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		111
ITEM 15.	CONTROLS AND PROCEDURES		111
ITEM 16.	[RESERVED]		112
	Item 16.A.	Audit Committee Financial Expert	112
	Item 16.B.	Code of Ethics	112
	Item 16.C.	Principal Accountant Fees and Services	113
	Item 16.D.	Exemptions from the Listing Standards for Audit Committees	113
	Item 16.E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	113
	Item 16.F.	Change in Registrant’s Certifying Accountant	114
	Item 16.G.	Corporate Governance	114
	Item 16.H.	Mine Safety Disclosure	115
PART III			115
ITEM 17.	FINANCIAL STATEMENTS		115
ITEM 18.	FINANCIAL STATEMENTS		115
ITEM 19.	EXHIBITS		116

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GLOSSARY

“ADR”	American Depositary Receipt evidencing ADSs.
“ADR depositary”	Citibank, N.A.
“ADS”	American Depositary Share representing one-fourth of one share of Common Stock.
“Australian Dollar” or “A$”	The currency of the Commonwealth of Australia.
“Commercial Code”	Commercial Code of the Republic of Korea.
“common stock”	Common stock, par value Won 5,000 per share, of POSCO.
“deposit agreement”	Deposit Agreement, dated as of July 19, 2013, among POSCO, the ADR Depositary and all holders and beneficial owners from time to time of ADRs issued thereunder.
“Dollars,” “$” or “US$”	The currency of the United States of America.
“FSCMA”	Financial Investment Services and Capital Markets Act of the Republic of Korea.
“Government”	The government of the Republic of Korea.
“IASB”	International Accounting Standards Board.
“IFRS”	International Financial Reporting Standards.
“Yen” or “JPY”	The currency of Japan.
“Korea”	The Republic of Korea.
“Gwangyang Works”	Gwangyang Steel Works.
“We”	POSCO and its consolidated subsidiaries.
“Pohang Works”	Pohang Steel Works.
“POSCO Group”	POSCO and its consolidated subsidiaries.
“Renminbi”	The currency of the People’s Republic of China.
“Securities Act”	The United States Securities Act of 1933, as amended.
“Securities Exchange Act”	The United States Securities Exchange Act of 1934, as amended.
“SEC”	The United States Securities and Exchange Commission.
“tons”	Metric tons (1,000 kilograms), equal to 2,204.6 pounds.
“U.S. GAAP”	Generally accepted accounting principles in the United States of America.
“Won” or “￦”	The currency of the Republic of Korea.

Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.

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PART I

Item 1.  Identity of Directors, Senior Managers and Advisers

Item 1.A.  Directors and Senior Management

Not applicable

Item 1.B.  Advisers

Not applicable

Item 1.C.  Auditor

Not applicable

Item 2.  Offer Statistics and Expected Timetable

Not applicable

Item 2.A.  Offer Statistics

Not applicable

Item 2.B.  Method and Expected Timetable

Not applicable

Item 3.  Key Information

Item 3.A.  Selected Financial Data

The selected financial data presented below should be read in conjunction with our Consolidated Financial Statements and related notes thereto and “Item 5. Operating and Financial Review and Prospects” included elsewhere in this annual report. The selected financial data in Won as of December 31, 2016 and 2017 and for each of the years in the three-year period ended December 31, 2017 were derived from our Consolidated Financial Statements included elsewhere in this annual report. Our Consolidated Financial Statements are prepared in accordance with IFRS as issued by the IASB.

In addition to preparing financial statements in accordance with IFRS as issued by the IASB included in this annual report, we prepare financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) as adopted by the Korean Accounting Standards Board (the “KASB”), which we are required to file with the Financial Services Commission and the Korea Exchange under the FSCMA. English translations of such financial statements are furnished to the SEC under Form 6-K. K-IFRS differs in certain respects from IFRS as issued by the IASB in the presentation of operating profit. Additionally, under K-IFRS, revenue from the development and sale of certain real estate is recognized using the percentage of completion method. However, under IFRS as issued by the IASB, revenue from the development and sale of real estate is recognized when an individual unit of residential real estate is delivered to the buyer. As a result, our consolidated statements of comprehensive income and our consolidated statements of financial position prepared in accordance with IFRS as issued by the IASB included in this annual report differ from our consolidated statements of comprehensive income and consolidated statements of financial position prepared in accordance with K-IFRS. See “Item 5.A. Operating Results — Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS.”

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The information set forth below is not necessarily indicative of the results of future operations and should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements and related notes included in this annual report.

Selected consolidated statement of comprehensive income data

	For the Year Ended December 31,
	2013			2014			2015			2016			2017
	(In billions of Won, except per share data)
Revenue	￦	61,766		￦	64,759		￦	58,522		￦	52,940		￦	60,187
Cost of sales		54,914			57,465			52,018			46,271			51,916
Gross profit		6,852			7,293			6,504			6,668			8,271
Administrative expenses		2,232			2,310			2,395			2,292			2,177
Selling expenses		1,632			1,760			1,729			1,554			1,557
Other operating income		229			269			549			215			451
Other operating expenses		651			980			1,442			756			792
Operating profit		2,566			2,513			1,486			2,282			4,196
Share of profit (loss) of equity-accounted investees, net		(180	)		(300	)		(506	)		(89	)		11
Finance income		2,381			2,397			2,557			2,232			2,373
Finance costs		2,829			3,222			3,387			3,014			2,484
Profit before income tax		1,938			1,388			150			1,412			4,095
Income tax expense		589			824			267			380			1,186
Profit (loss)		1,349			564			(116	)		1,032			2,909
Total comprehensive income (loss)		1,363			108			(278	)		1,486			2,348
Profit (loss) for the period attributable to:
Owners of the controlling company		1,371			633			171			1,355			2,756
Non-controlling interests		(22	)		(69	)		(288	)		(323	)		153
Total comprehensive income (loss) attributable to:
Owners of the controlling company		1,439			182			24			1,814			2,184
Non-controlling interests		(75	)		(73	)		(302	)		(328	)		164
Basic and diluted earnings per share (1)		17,338			7,514			1,731			16,521			34,040
Dividends per share of common stock		8,000			8,000			8,000			8,000			8,000

Selected consolidated statements of financial position data

	As of December 31,
	2013		2014		2015		2016		2017
	(In billions of Won)
Working capital (2)	￦	11,681	￦	10,833	￦	9,148	￦	10,711	￦	12,354
Total current assets		32,039		33,208		29,502		29,655		31,844
Property, plant and equipment, net		35,760		35,241		34,523		33,770		31,884
Total non-current assets		52,802		52,636		51,246		50,483		47,941
Total assets		84,841		85,844		80,748		80,138		79,786
Short-term borrowings and current installments of long-term borrowings		10,714		12,195		12,371		10,195		11,275
Long-term borrowings, excluding current installments		15,533		15,233		12,849		12,510		9,789
Total liabilities		39,060		40,586		35,735		34,372		32,459
Share capital		482		482		482		482		482
Total equity		45,781		45,257		45,013		45,765		47,327

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Selected consolidated statements of cash flows data

	For the Year Ended December 31,
	2013			2014			2015			2016			2017
	(In billions of Won)
Net cash provided by operating activities	￦	4,858		￦	3,412		￦	7,602		￦	5,269		￦	5,607
Net cash used in investing activities		(8,752	)		(3,745	)		(4,535	)		(3,755	)		(3,818	)
Net cash provided by (used in) financing activities		3,532			135			(2,242	)		(3,951	)		(1,566	)
Net increase (decrease) in cash and cash equivalents		(472	)		(186	)		849			(2,424	)		165
Cash and cash equivalents at beginning of the year		4,681			4,209			4,022			4,871			2,448
Cash and cash equivalents at end of the year		4,209			4,022			4,871			2,448			2,613

(1) See Note 36 of Notes to Consolidated Financial Statements for method of calculation. The weighted average number of common shares outstanding used to calculate basic and diluted earnings per share was 78,009,654 shares as of December 31, 2013, 79,801,539 shares as of December 31, 2014, 79,993,834 shares as of December 31, 2015, 79,996,389 shares as of December 31, 2016 and 79,998,600 shares as of December 31, 2017.

(2) “Working capital” means current assets minus current liabilities.

EXCHANGE RATE INFORMATION

The following table sets out information concerning the market average exchange rate for the periods and dates indicated.

Period	At End of Period		Average Rate (1)		High		Low
2013		1,055.3		1,095.0		1,159.1		1,051.5
2014		1,099.2		1,053.2		1,118.3		1,008.9
2015		1,172.0		1,131.5		1,203.1		1,068.1
2016		1,208.5		1,160.5		1,240.9		1,093.2
2017		1,071.4		1,130.8		1,208.5		1,071.4
October		1,125.0		1,131.6		1,145.7		1,124.7
November		1,082.4		1,105.0		1,121.2		1,082.4
December		1,071.4		1,085.8		1,093.4		1,071.4
2018 (through April 26)		1,078.7		1,071.0		1,094.3		1,057.6
January		1,071.5		1,066.7		1,071.5		1,061.3
February		1,071.0		1,079.6		1,094.3		1,068.0
March		1,066.5		1,071.9		1,081.9		1,064.3
April (through April 26)		1,078.7		1,066.7		1,078.7		1,057.6

Source: Seoul Money Brokerage Services, Ltd.

(1) The average rate for each year is calculated as the average of the market average exchange rates on the last business day of each month during the relevant year (or portion thereof). The average rate for a month is calculated as the average of the market average exchange rates on each business day during the relevant month (or portion thereof).

Item 3.B.   Capitalization and Indebtedness

Not applicable

Item 3.C.  Reasons for Offer and Use of Proceeds

Not applicable

Item 3.D. Risk Factors

You should carefully consider the risks described below.

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The global economic downturn may adversely affect our business and performance. The global economic outlook for the near future remains uncertain.

Our business is affected by highly cyclical market demand for our steel products from a number of industries, including the construction, automotive, shipbuilding and electrical appliances industries as well as downstream steel processors, which are sensitive to general conditions in the global economy. Macroeconomic factors, such as the economic growth rate, employment levels, interest rates, inflation rates, exchange rates, commodity prices, demographic trends and fiscal policies of governments can have a significant effect on such industries. From time to time, these industries have experienced significant and sometimes prolonged downturns, which in turn have negatively impacted our steel business. While global economic conditions have generally stabilized and improved in recent years, the overall prospects for the global economy remain uncertain. Financial markets have experienced significant volatility in recent years as a result of, among other things, the slowdown of economic growth in China and other major emerging market economies, in addition to adverse economic and political conditions in Europe and Latin America and continuing geopolitical and social instability in North Korea and various parts of the Middle East, including Syria, Iraq and Yemen, as well as the United Kingdom’s decision in June 2016 to exit from the European Union (“Brexit”).

An actual or anticipated further deterioration of global economic conditions may result in a decline in demand for our products that could have a negative impact on the prices at which they can be sold. In such a case, we will likely face pressure to reduce prices and we may need to rationalize our production capacity and reduce fixed costs. In the past, we have adjusted our crude steel production levels and sales prices in response to sluggish demand from our customers in industries adversely impacted by the deteriorating economic conditions. We produced 42.0 million tons of crude steel and stainless steel in 2015, 42.2 million tons in 2016 and 42.2 million tons in 2017. The average unit sales prices for our semi-finished and finished steel products were Won 798 thousand per ton in 2015, Won 745 thousand per ton in 2016 and Won 904 thousand per ton in 2017.

We expect fluctuation in demand for our steel products and trading services to continue to prevail at least in the near future. We may decide to further adjust our future crude steel production or our sales prices on an on-going basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. In addition, economic downturns in the Korean and global economies could result in market conditions characterized by weaker demand for steel products from a number of industries as well as falling prices for export and import products and reduced trade levels. Deterioration of market conditions may result in changes in assumptions underlying the carrying value of certain assets, which in turn could result in impairment of such assets, including intangible assets such as goodwill. In addition, our ability to reduce expenditures for production facilities and research and development during an industry downturn is limited because of the need to maintain our competitive position. If we are unable to reduce our expenses sufficiently to offset reductions in price and sales volume, our margins will suffer and our business, financial condition and results of operations may be materially and adversely affected.

Korea is our most important market, and our current business and future growth could be materially and adversely affected if economic conditions in Korea deteriorate.

We are incorporated in Korea, and a substantial portion of our operations and assets are located in Korea. Korea is our most important market, accounting for 39.0% of our total revenue from steel products produced and sold by us in 2017. Domestic demand for our products is affected by the condition of major steel consuming industries, such as construction, shipbuilding, automotive, electrical appliances and downstream steel processors, and the Korean economy in general. In addition, the trading operations of POSCO Daewoo Corporation (“POSCO Daewoo”) are affected by the general level of trade between Korea and other countries, which in turn tends to fluctuate based on general conditions in the Korean and global economies. As a result, we are subject to political, economic, legal and regulatory risks specific to Korea. The economic indicators in Korea in recent years have shown

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mixed signs, and future growth of the Korean economy is subject to many factors beyond our control, including developments in the global economy.

In recent years, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices and the general weakness of the global economy have contributed to the uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean economy. The value of the Won relative to major foreign currencies has fluctuated significantly and, as a result of adverse global and Korean economic conditions, there has been volatility in the stock prices of Korean companies in recent years. Future declines in the Korea Composite Stock Price Index (the “KOSPI”) and large amounts of sales of Korean securities by foreign investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Won, the foreign currency reserves held by financial institutions in Korea and the ability of Korean companies to raise capital. Any future deterioration of the Korean or global economy could adversely affect our business, financial condition and results of operations.

Developments that could have an adverse impact on Korea’s economy include:

• declines in consumer confidence and a slowdown in consumer spending in the Korean or global economy;

• deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy (such as the controversy between Korea and China regarding the deployment of a Terminal High Altitude Area Defense system in Korea by the United States commencing in March 2017 and the economic and other retaliatory measures imposed by China against Korea during the remainder of 2017);

• adverse conditions in the economies of countries and regions that are important export markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies in Asia or elsewhere, as well as increased uncertainties in the wake of Brexit;

• adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices), exchange rates (including fluctuation of the U.S. dollar, Euro, Chinese Renminbi or Japanese Yen exchange rates and the overall impact of Brexit on the value of the Won), interest rates, inflation rates or stock markets;

• increased sovereign default risk in select countries and the resulting adverse effects on the global financial markets;

• investigations of large Korean business groups and their senior management for possible misconduct;

• a continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail and small- and medium-sized enterprise borrowers in Korea;

• social and labor unrest;

• decreases in the market prices of Korean real estate;

• the economic impact of any pending or future free trade agreements or changes in existing free trade agreements;

• a decrease in tax revenue or a substantial increase in the Government’s expenditures for fiscal stimulus measures, unemployment compensation and other economic and social programs that would lead to an increased government budget deficit;

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• financial problems or lack of progress in the restructuring of Korean business groups, other large troubled companies (including those in the shipbuilding and shipping sectors), their suppliers or the financial sector;

• loss of investor confidence arising from corporate accounting irregularities or corporate governance issues at certain Korean companies;

• increases in social expenditures to support an aging population in Korea or decreases in economic productivity due to the declining population size in Korea;

• geo-political uncertainty and the risk of further attacks by terrorist groups around the world;

• the occurrence of severe health epidemics in Korea or other parts of the world (such as the Middle East Respiratory Syndrome outbreak in Korea in 2015);

• natural or man-made disasters that have a significant adverse economic or other impact on Korea or its major trading partners;

• political uncertainty or increasing strife among or within political parties in Korea;

• hostilities or political or social tensions involving oil producing countries in the Middle East and North Africa and any material disruption in the global supply of oil or sudden increase in the price of oil;

• increased reliance on exports to service foreign currency debts, which could cause friction with Korea’s trading partners;

• the continued growth of the Chinese economy, to the extent its benefits (such as increased exports to China) are outweighed by its costs (such as competition in export markets or for foreign investment and the relocation of manufacturing bases from Korea to China);

• political or social tensions involving Russia and any resulting adverse effects on the global supply of oil or the global financial markets; and

• an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the United States.

We rely on export sales for a significant portion of our total sales. Adverse economic and financial developments in Asia in the future may have an adverse effect on demand for our products in Asia and increase our foreign exchange risks.

Our export sales and overseas sales to customers abroad accounted for 61.0% of our total revenue from steel products produced and sold by us in 2017. Our export sales volume to customers in Asia, including China, Japan, Indonesia, Thailand and Malaysia, accounted for 63.1% of our total export sales revenue from steel products produced and exported by us in 2017, and we expect our sales to these countries to remain important in the future. In particular, our export volume to China has increased in recent years and accounted for 28.5% of our total export sales revenue from steel products produced and exported by us in 2017. Accordingly, adverse economic and financial developments in these countries may have an adverse effect on demand for our products. Unfavorable or uncertain economic and market conditions, which can be caused, among others, by difficulties in the financial sector, corporate, political or other scandals that may reduce confidence in the markets, declines in business confidence, increases in inflation, natural disasters or pandemics, outbreaks of hostilities or other geopolitical instability. Deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy (such as the controversy between Korea and China, which is Korea’s largest export market, regarding the deployment of a Terminal High Altitude Area Defense system in Korea by the United States in March 2017 and the economic and other retaliatory actions by

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China during the remainder of 2017), or a combination of these or other factors, have, in the past adversely affected, and may in the future adversely affect, demand for our products.

Economic weakness in Asia may also adversely affect our sales to the Korean companies that export to the region, especially companies in the construction, shipbuilding, automotive, electrical appliances and downstream steel processing industries. Weaker demand in these countries, combined with an increase in global production capacity, may also reduce export prices in Dollar terms of our principal products sold to customers in Asia. For a discussion of production over-capacity in the global steel industry, see “— We operate in the highly competitive steel, trading and construction industries, and our failure to successfully compete would adversely affect our market position and business.” We attempt to maintain and expand our export sales to generate foreign currency receipts to cover our foreign currency purchases and debt service requirements. Consequently, any decrease in our export sales could also increase our foreign exchange risks.

Depreciation of the value of the Won against the Dollar and other major foreign currencies may have a material adverse effect on the results of our operations and on the price of the ADSs.

Our consolidated financial statements are prepared from our local currency denominated financial results, assets and liabilities and our subsidiaries around the world, which are then translated into Won. A substantial proportion of our consolidated financial results is accounted for in currencies other than the Won. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies. In 2017, 61.0% of our total revenue from steel products produced and sold by us was in overseas markets outside of Korea. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies. Since the currency in which sales are recorded may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Depreciation of the Won may materially affect the results of our operations because, among other things, it causes:

• an increase in the amount of Won required for us to make interest and principal payments on our foreign currency-denominated debt;

• an increase in Won terms in the costs of raw materials and equipment that we purchase from overseas sources and a substantial portion of our freight costs, which are denominated primarily in Dollars; and

• foreign exchange translation losses on liabilities, which lower our earnings for accounting purposes.

Appreciation of the Won against major currencies, on the other hand, causes:

• our export products to be less competitive by raising our prices in Dollar, Yen and Renminbi terms; and

• a reduction in net sales and accounts receivables in Won from export sales, which are primarily denominated in Dollars and to a lesser extent in Yen and Renminbi.

The overall net impact from fluctuations of the Won against major currencies is difficult to estimate and varies from year to year. We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO Daewoo’s exposure to fluctuations in exchange rates, including the Won/Dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because

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POSCO Daewoo’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in Dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO Daewoo and POSCO Engineering & Construction Co., Ltd. (“POSCO E&C”), also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks. However, our results of operations have historically been affected by exchange rate fluctuations and there can be no assurance that such strategies will be sufficient to reduce or eliminate the adverse impact of such fluctuations in the future.

Fluctuations in the exchange rate between the Won and the Dollar will also affect the Dollar equivalent of the Won price of the shares of our common stock on the KRX KOSPI Market and, as a result, will likely affect the market price of the ADSs. These fluctuations will also affect the Dollar conversion by the depositary for the ADRs of cash dividends, if any, paid in Won on shares of common stock represented by the ADSs.

We are dependent on imported raw materials, and significant increases in market prices of essential raw materials could adversely affect our margins and profits.

We purchase substantially all of the principal raw materials we use from sources outside Korea, including iron ore and coal. POSCO imported approximately 52.9 million dry metric tons of iron ore and 27.4 million wet metric tons of coal in 2017. Iron ore is imported primarily from Australia, Brazil and Canada. Coal is imported primarily from Australia, Canada and Russia. Although we have not experienced significant unanticipated supply disruptions in the past, supply disruptions, which could be caused by political or other events in the countries from which we import these materials, could adversely affect our operations. In addition, we are particularly exposed to increases in the prices of coal, iron ore and nickel, which represent the largest components of our cost of goods sold. The prices of our key raw materials have fluctuated significantly in recent years. For example, the average market price of coal per wet metric ton (benchmark free on board price of Peak Downs Australian premium hard coking coal) was US$102 in 2015, US$114 in 2016 and US$217 in 2017. The average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China index announced by Platts) was US$51 in 2015, US$54 in 2016 and US$64 in 2017.

Our long-term supply contracts generally have terms of three to ten years and provide for periodic price adjustments to the then-market prices. We typically adjust the prices on a quarterly basis and maintain approximately one month of inventory of raw materials. Such price adjustments are driven by various factors, including the global economic outlook, global market prices of raw materials and steel products, supply and demand outlook of raw materials and production costs of raw materials. In the case of coal, globally influential buyers and sellers of coal determine benchmark prices of coal, based on which other buyers and sellers negotiate their prices after taking into consideration the quality of coal and other factors. In the case of iron ore, the supplier and we typically agree on the purchase price primarily based on the spot market price periodically announced by Platts (Iron Ore 62% Fe, CFR China Index). As of December 31, 2017, 116 million tons of iron ore and 18 million tons of coal remained to be purchased under long-term supply contracts. Future increases in prices of our key raw materials and our inability to pass along such increases to our customers could adversely affect our margins and profits. Increased prices may also cause potential customers to defer purchase of steel products, while rapidly falling prices may increase loss on valuation of raw material inventory purchased when prices were higher, either of which could have an adverse effect on our business, financial condition and results of operations.

We operate in the highly competitive steel, trading and construction industries, and our failure to successfully compete would adversely affect our market position and business.

Steel. The markets for our steel products are highly competitive and we face intense global competition. China is the largest steel producing country in the world by a significant margin, with the

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balance between its domestic production and demand being an important factor in the determination of global steel prices. In recent years, a slowdown in domestic demand for steel products in China resulting from slowed economic growth, combined with an expansion in steel production capacity, has led to production over-capacity in the Chinese steel industry, which in turn has led the Chinese government to pursue aggressive consolidation in the Chinese steel industry. In addition, the global steel industry has experienced consolidation in the past, including through the merger of Mittal and Arcelor in 2006. Competition from global steel manufacturers with expanded production capacity such as ArcelorMittal S.A. as well as larger competitors from emerging markets, especially from China and India, has resulted in significant price competition and may result in declining margins and reductions in revenue in the future. Our larger competitors may use their resources, which may be greater than ours, against us in a variety of ways, including by making additional acquisitions, investing more aggressively in product development and capacity and displacing demand for our export products.

In the past, increased production capacity, combined with decreased demand resulting from a slowdown of the global economy, has from time to time resulted in production over-capacity in the global steel industry. Production over-capacity in the global steel industry may intensify if global economic growth slows or demand from developing countries, particularly from China, continues to lag behind the growth in production capacity. Production over-capacity in the global steel industry is likely to:

• reduce export prices in Dollar terms of our principal products, which in turn may reduce our sales prices in Korea;

• increase competition in the Korean market as foreign producers seek to export steel products to Korea as other markets experience a slowdown;

• negatively affect demand for our products abroad and our ability to expand export sales; and

• affect our ability to increase steel production in general.

Steel also competes with other natural and synthetic materials that may be used as steel substitutes, such as aluminum, cement, composites, glass, plastic and wood. Government regulatory initiatives mandating the use of such materials instead of steel, whether for environmental or other reasons, as well as the development of attractive alternative substitutes for steel products, may reduce demand for steel products and increase competition in the global steel industry.

As part of our strategy to compete in this challenging landscape, we will continue to invest in developing innovative products that offer the greatest potential returns and enhance the overall quality of our products, as well as make additional investments in the development of new manufacturing technologies. However, there is no assurance that we will be able to continue to compete successfully in this economic environment or that a slowdown of the global economy or production over-capacity will not have a material adverse effect on our business, results of operations or financial condition.

Trading. POSCO Daewoo competes principally with six other Korean general trading companies, each of which is affiliated with a major domestic business group, as well as global trading companies based in other countries. In the domestic market, competition for export transactions on behalf of domestic suppliers and import transactions on behalf of domestic purchasers was limited, as most affiliated general trading companies of large Korean business groups generally relied on affiliate transactions for the bulk of their trading business. However, in recent years, many of these Korean general trading companies have reduced their reliance on their affiliated business group and transactions carried out on behalf of their member companies and instead have generally evolved to focus on segments of the import and export markets in which they have a competitive advantage. As a result, competition among Korean general trading companies in the area of traditional trade has become more intense.

The overseas trading markets in which POSCO Daewoo operates are also highly competitive. POSCO Daewoo’s principal competitors in the overseas trading markets include Korean trading

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companies that operate in various international markets, as well as foreign trading companies, particularly those based in Japan. As POSCO Daewoo diversifies into businesses other than traditional trading such as natural resources development, it also increasingly competes with other Korean and international companies involved in these businesses. Some of POSCO Daewoo’s competitors may be more experienced and have greater financial resources and pricing flexibility than POSCO Daewoo, as well as more extensive global networks and wider access to customers. There is no assurance that POSCO Daewoo will be able to continue to compete successfully in this economic environment or that the prolonged slowdown of the global economy will not have a material adverse effect on its business, results of operations or financial condition.

Construction. POSCO E&C, our consolidated subsidiary, operates in the highly competitive construction industry. Competition is based primarily on price, reputation for quality, reliability, punctuality and financial strength of contractors. Intense competition among construction companies may result in, among other things, a decrease in the price POSCO E&C can charge for its services, difficulty in winning bids for construction projects, an increase in construction costs and difficulty in obtaining high-quality contractors and qualified employees.

In Korea, POSCO E&C’s main competition in the construction of residential and non-residential buildings, EPC (or engineering, procurement and construction) projects, urban planning and development projects and civil works projects consists of approximately ten major domestic construction companies, many of which are member companies of other large business groups in Korea and are capable of undertaking larger-scale, higher-value-added projects that offer greater potential returns. A series of measures introduced by the Government over the past few years to regulate housing prices in Korea, as well as increasing popularity of low-bid contracts in civil works project mandates, have contributed to increased competition in the Korean construction industry in recent years.

Competition for new project awards in overseas markets is also intense. In these markets, POSCO E&C faces competition from local construction companies, as well as international construction companies from other countries, including other major Korean construction companies with overseas operations. Construction companies from other developed countries may be more experienced, have greater financial resources and possess more sophisticated technology than POSCO E&C, while construction companies from developing countries often have the advantage of lower wage costs. Some of these competitors have achieved higher market penetration than POSCO E&C has in specific markets in which it competes, and POSCO E&C may need to accept lower margins in order for it to compete successfully against them. POSCO E&C’s failure to successfully compete in the domestic or overseas construction markets could adversely affect its market position and its results of operations and financial condition.

We may not be able to successfully execute our diversification strategy.

In part to prepare for the eventual maturation of the Korean steel market, we have made investments in the past decade to secure new growth engines by diversifying into new businesses related to our steel operations that we believe will offer greater potential returns, such as participation in EPC projects in the steel sector and natural resources development, as well as entering into new businesses not related to our steel operations such as power generation and alternative energy solutions, and production of comprehensive materials such as lithium, magnesium sheet, nickel and cobalt. From time to time, we may selectively acquire or invest in companies to pursue such diversification strategy.

The success of the overall diversification strategy will depend, in part, on our ability to realize the growth opportunities and anticipated synergies. The realization of the anticipated benefits depends on numerous factors, some of which are outside our control, including the availability of qualified personnel, establishment of new relationships and expansion of existing relationships with various

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customers and suppliers, procurement of necessary technology and know-how to engage in such businesses and access to investment capital at reasonable costs. The realization of the anticipated benefits may be impeded, delayed or reduced as a result of numerous factors, some of which are outside our control. These factors include:

• difficulties in integrating the operations of the acquired business, including information and accounting systems, personnel, policies and procedures, and in reorganizing or reducing overlapping operations, marketing networks and administrative functions, which may require significant amounts of time, financial resources and management attention;

• unforeseen contingent risks or latent liabilities relating to the acquisition that may become apparent in the future;

• difficulties in managing a larger business; and

• loss of key management personnel or customers.

In addition, in order to finance these acquisitions, we intend to use cash on hand, funds from operations, issuances of equity and debt securities, and, if necessary, financings from banks and other sources as well as entering into consortiums with financial investors. However, no assurance can be given that we will be able to obtain sufficient financing for such acquisitions or investments on terms commercially acceptable to us or at all. We cannot assure you that our diversification strategy can be completed profitably or that the diversification efforts will not adversely affect our combined business, financial condition and results of operations.

Expansion of our production operations abroad is important to our long-term success, and our limited experience in the operation of our business outside Korea increases the risk that our international expansion efforts will not be successful.

We conduct international trading and construction operations abroad, and our business relies on a global trading network comprised of overseas subsidiaries, branches and representative offices. Although many of our subsidiaries and overseas branches are located in developed countries, we also operate in numerous countries with developing economies. In addition, we intend to continue to expand our steel production operations internationally by carefully seeking out promising investment opportunities, particularly in China, India, Southeast Asia and Latin America, in part to prepare for the eventual maturation of the Korean steel market. We may enter into additional joint ventures with foreign steel producers that would enable us to rely on these businesses to conduct our operations, establish local networks and coordinate our sales and marketing efforts abroad. To the extent that we enter into these arrangements, our success will depend in part on the willingness of our partner companies to dedicate sufficient resources to their partnership with us.

In other situations, we may decide to establish manufacturing facilities by ourselves instead of relying on partners. The demand and market acceptance for our products produced abroad are subject to a high level of uncertainty and are substantially dependent upon the market condition of the global steel industry. We cannot assure you that our international expansion plan will be profitable or that we can recoup the costs related to such investments.

Expansion of our trading, construction and production operations abroad requires management attention and resources. In addition, we face additional risks associated with our expansion outside Korea, including:

• challenges caused by distance, language and cultural differences;

• higher costs associated with doing business internationally;

• legal and regulatory restrictions, including foreign exchange controls that might prevent us from repatriating cash earned in countries outside Korea;

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• longer payment cycles in some countries;

• credit risk and higher levels of payment fraud;

• currency exchange risks;

• potentially adverse tax consequences;

• political and economic instability; and

• seasonal reductions in business activity during the summer months in some countries.

We have limited insurance coverage and may incur significant losses resulting from operating hazards, product liability claims from customers or business interruptions.

The normal operation of our manufacturing facilities may be interrupted by accidents caused by operating hazards, power supply disruptions and equipment failures, as well as natural disasters. As with other industrial companies, our operations involve the use, handling, generation, processing, storage, transportation and disposal of hazardous materials, which may result in fires, explosions, spills and other unexpected or dangerous accidents causing property damage as well as personal injuries or death. We are also exposed to risks associated with product liability claims in the event that the use of the products we sell results in injury. We maintain property insurance for our property, plant and equipment that we believe to be consistent with market practice in Korea. However, we may not have adequate resources to satisfy a judgment in excess of our insurance coverage in the event of a successful claim against us. Any occurrence of accidents or other events affecting our operations could result in potentially significant monetary damages, diversion of resources, production disruption and delay in delivery of our products, which may have a material adverse effect on our business, financial condition and results of operations.

Further increases in, or new impositions of, anti-dumping, safeguard or countervailing duty proceedings may have an adverse impact on our export sales.

As a steel producer with global sales and operations, we are involved in trade remedy proceedings in markets worldwide, including in the United States. We proactively participate in and plan for such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, all such cases have been product and market-specific, and thus have been limited in scope relative to our global sales and operations. We continue to carefully monitor developments with respect to trade remedy policy in all markets in which we participate and, where necessary, vigorously defend our rights through litigation before tribunals such as the U.S. Court of International Trade. Our products that are subject to anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs in the aggregate currently do not account for a material portion of our total sales, and such proceedings have not had a material adverse impact on our business and operations in recent years. However, there can be no assurance that increases in, or new impositions of, anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs on our exports of products abroad may not have a material adverse impact on our exports in the future.

We participate in overseas natural resources exploration, development and production projects abroad, which expose us to various risks.

As part of consortia or through acquisitions of minority interests, we engage in overseas natural resources exploration, development and production projects in various locations, including a gas field exploration project in Myanmar through POSCO Daewoo. We may also selectively acquire or invest in companies or businesses that engage in such activities. As part of our efforts to diversify our operations, we intend to selectively expand our operations by carefully seeking out promising

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exploration, development and production opportunities abroad. To the extent that we enter into these arrangements, our success in these endeavors will depend in part on the willingness of our partner companies to dedicate sufficient resources to their partnership with us, as well as our ability to finance such investments.

The demand and market acceptance for such activities abroad are subject to a substantially higher level of uncertainty than our traditional steel business and are substantially dependent upon the market condition of the global natural resources industry as well as the political and social environment of the target countries. The performance of projects in which we participate may be adversely affected by the occurrence of military hostility, political unrest or acts of terrorism. In addition, some of our current exploration, development and production projects involve drilling exploratory wells on properties with no proven amount of natural resource reserves. Although all drilling, whether developmental or exploratory, involves risks, exploratory drilling involves greater risks of dry holes or failure to find commercial quantities of natural resources. Other risks to which such activities are subject include obtaining required regulatory approvals and licenses, securing and maintaining adequate property rights to land and natural resources, and managing local opposition to project development. A decrease in the market price of raw materials may also adversely impact the value of our investments related to natural resources projects. For example, in connection with our disposition of a minority interest in Nacional Minerios S.A., an iron ore mining company in Brazil in which we had invested in December 2008, we recognized Won 96 billion of impairment loss on assets held for sale in 2015 as well as an additional loss of Won 189 billion from our disposal of such assets in 2015. We have limited experience in this business, and we cannot assure you that our overseas natural resources exploration, development and production projects will be profitable, that we will be able to meet the financing requirements for such projects, or that we can recoup the costs related to such investments, which in turn could materially and adversely affect our business, financial condition and results of operations.

We may encounter problems with joint overseas natural resources exploration, development and production projects and large-scale infrastructure projects, which may materially and adversely affect our business.

We typically pursue our natural resources exploration, development and production projects jointly with consortium partners or through acquisition of minority interests in such projects, and we expect to be involved in other joint projects in the future. We sometimes hold a majority interest in the projects among the consortium partners, but we often lack a controlling interest in the joint projects. Therefore, we may not be able to require that our joint ventures sell assets or return invested capital, make additional capital contributions or take any other action without the vote of at least a majority of our consortium partners. If there are disagreements between our consortium partners and us regarding the business and operations of the joint projects, we cannot assure you that we will be able to resolve them in a manner that will be in our best interests. Certain major decisions, such as selling a stake in the joint project, may require the consent of all other partners. These limitations may adversely affect our ability to obtain the economic and other benefits we seek from participating in these projects.

In addition, our consortium partners may:

• have economic or business interests or goals that are inconsistent with us;

• take actions contrary to our instructions, requests, policies or objectives;

• be unable or unwilling to fulfill their obligations;

• have financial difficulties; or

• have disputes with us as to their rights, responsibilities and obligations.

Any of these and other factors may have a material adverse effect on the performance of our joint projects and expose us to a number of risks, including the risk that the partners may be incapable

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of providing the required financial support to the partnerships and the risk that the partners may not be able to fulfill their other obligations, resulting in disputes not only between our partners and us, but also between the joint ventures and their customers. Such a material adverse effect on the performance of our joint projects may in turn materially and adversely affect our business, results of operations and financial condition.

Cyclical fluctuations based on macroeconomic factors may adversely affect POSCO E&C’s business and performance.

We engage in engineering and construction activities through POSCO E&C. The Construction Segment is highly cyclical and tends to fluctuate based on macroeconomic factors, such as consumer confidence and income, employment levels, interest rates, inflation rates, demographic trends and policies of the Government. From time to time, the construction industry has experienced significant and sometimes prolonged downturns, and our construction revenues have fluctuated in the past depending on the level of public and private sector construction activities in Korea and abroad. In addition, the performance of POSCO E&C’s domestic residential property business is highly dependent on the general condition of the real estate market in Korea. The Government has taken measures to support the Korean construction industry in recent years, including easing of regulations imposed on redevelopment of apartment buildings and resale restrictions in the metropolitan areas, as well as reductions in property taxes. Although the Korean residential real estate market has shown signs of recovery in recent years, the demand for construction activities abroad remains weak and the overall prospects for Korean construction companies in 2018 and beyond remain uncertain. A prolonged general downturn in the construction market resulting in weaker demand may adversely affect our business, results of operations or financial condition.

Many of POSCO E&C’s domestic and overseas construction projects are on a fixed-price basis, which could result in losses for us in the event that unforeseen additional expenses arise with respect to the project.

Many of POSCO E&C’s domestic and overseas construction projects are carried out on a fixed-price basis according to a predetermined timetable, pursuant to the terms of a fixed-price contract. Under such fixed-price contracts, POSCO E&C retains all cost savings on completed contracts but is also liable for the full amount of all cost overruns and may be required to pay damages for late delivery. The pricing of fixed-price contracts is crucial to POSCO E&C’s profitability, as is its ability to quantify risks to be borne by it and to provide for contingencies in the contract accordingly.

POSCO E&C attempts to anticipate costs of labor, raw materials, parts and components in its bids on fixed-price contracts. However, the costs incurred and gross profits realized on a fixed-price contract may vary from its estimates due to factors such as:

• unanticipated variations in labor and equipment productivity over the term of a contract;

• unanticipated increases in labor, raw material, parts and components, subcontracting and overhead costs, including as a result of bad weather;

• delivery delays and corrective measures for poor workmanship; and

• errors in estimates and bidding.

If unforeseen additional expenses arise over the course of a construction project, such expenses are usually borne by POSCO E&C, and its profit from the project will be correspondingly reduced or eliminated. For example, we incurred losses in recent years in connection with a delay in the construction of CSP-Companhia Siderurgia do Pecem steel plant complex in Brazil. If POSCO E&C experiences significant unforeseen additional expenses with respect to its fixed price projects, it may incur losses on such projects, which could have a material adverse effect on its financial condition and results of operations.

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We are subject to environmental regulations, and our operations could expose us to substantial liabilities.

We are subject to national and local environmental laws and regulations, including increasing pressure to reduce emission of carbon dioxide relating to our manufacturing process, and our steel manufacturing and construction operations could expose us to risk of substantial liability relating to environmental or health and safety issues, such as those resulting from discharge of pollutants and carbon dioxide into the environment, the handling, storage and disposal of solid or hazardous materials or wastes and the investigation and remediation of contaminated sites. We may be responsible for the investigation and remediation of environmental conditions at currently and formerly operated manufacturing or construction sites. For example, we incurred expenses in recent years relating to contamination of land near our magnesium smelting plant located in Gangneung, Korea and gas treatment plant located in our Pohang Works. We may also be subject to associated liabilities, including liabilities for natural resource damage, third party property damage or personal injury resulting from lawsuits brought by the Government or private litigants. In the course of our operations, hazardous wastes may be generated at third party-owned or operated sites, and hazardous wastes may be disposed of or treated at third party-owned or operated disposal sites. If those sites become contaminated, we could also be held responsible for the cost of investigation and remediation of such sites, for any associated natural resource damage, and for civil or criminal fines or penalties.

If our cybersecurity measures are breached, we may incur significant legal and financial exposure, damage to our reputation and a loss of confidence of our customers.

Our business involves the storage and transmission of large amounts of confidential information, and cybersecurity breaches expose us to a risk of loss of this information, which may lead to improper use or disclosure of such information, ensuing potential liability and litigation, any of which could harm our reputation and adversely affect our business. Although there has been no material instance where an unauthorized party was able to obtain access to our data or our customers’ data, there can be no assurance that we will not be vulnerable to cyber-attacks in the future. Our cybersecurity measures may also be breached due to employee error, malfeasance or otherwise. Instituting appropriate access controls and safeguards across all our information technology infrastructure is challenging. Furthermore, outside parties may attempt to fraudulently induce employees to disclose sensitive information in order to gain access to our data or our customers’ data or accounts, or may otherwise obtain access to such data or accounts. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our cybersecurity occurs or the market perception of the effectiveness of our cybersecurity measures is harmed, we may incur significant legal and financial exposure, including legal claims and regulatory fines and penalties, damage to our reputation and a loss of confidence of our customers, which could have an adverse effect on our business, financial condition and results of operations.

Failure to protect our intellectual property rights could impair our competitiveness and harm our business and future prospects.

We believe that developing new steel manufacturing technologies that can be differentiated from those of our competitors, such as FINEX, strip casting and silicon steel manufacturing technologies, is critical to the success of our business. We take active measures to obtain protection of our intellectual property by obtaining patents and undertaking monitoring activities in our major markets. However, we cannot assure you that the measures we take will effectively deter competitors from improper use of our proprietary technologies. Our competitors may misappropriate our intellectual property, disputes as to ownership of intellectual property may arise and our intellectual property may otherwise become known or independently developed by our competitors. Any failure to protect our intellectual property could impair our competitiveness and harm our business and future prospects.

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We rely on trade secrets and other unpatented proprietary know-how to maintain our competitive position, and unauthorized disclosure of our trade secrets or other unpatented proprietary know-how could negatively affect our business.

We rely on trade secrets and unpatented proprietary know-how and information. We enter into confidentiality agreements with each of our employees and consultants upon the commencement of an employment or consulting relationship. These agreements generally provide that all inventions, ideas, discoveries, improvements and patentable material made or conceived by the individual arising out of the employment or consulting relationship and all confidential information developed or made known to the individual during the term of the relationship is our exclusive property. We cannot assure the enforceability of these types of agreements, or that they will not be breached. We also cannot be certain that we will have adequate remedies for any breach. The disclosure of our trade secrets or other know-how as a result of such a breach could adversely affect our business.

We face the risk of litigation proceedings relating to infringement of intellectual property rights of third parties, which, if determined adversely to us, could cause us to lose significant rights, pay significant damage awards or suspend the sale of certain products.

Our success depends largely on our ability to develop and use our technology and know-how in a proprietary manner without infringing the intellectual property rights of third parties. The validity and scope of claims relating to technology and patents involve complex scientific, legal and factual questions and analysis and, therefore, may be highly uncertain. In addition, because patent applications in many jurisdictions are kept confidential for an extended period before they are published, we may be unaware of other persons’ pending patent applications that relate to our products or manufacturing processes. Accordingly, we face the risk of litigation proceedings relating to infringement of intellectual property rights of third parties.

The plaintiffs in actions relating to infringement of intellectual property rights typically seek injunctions and substantial damages. Although patent and other intellectual property disputes are often settled through licensing or similar arrangements, there can be no assurance that such licenses can be obtained on acceptable terms or at all. Accordingly, regardless of the scope or validity of disputed patents or the merits of any patent infringement claims by potential or actual litigants, we may have to engage in protracted litigation. The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings could subject us to pay substantial damages to third parties, require us to seek licenses from third parties and pay ongoing royalties or redesign certain products, or subject us to injunctions prohibiting the manufacture and sale of our products or the use of technologies in certain jurisdictions. The occurrence of any of the foregoing could have a material adverse effect on our reputation, business, financial condition and results of operations.

We may be exposed to potential claims for unpaid wages and become subject to additional labor costs arising from the Supreme Court of Korea’s interpretation of ordinary wages.

Under the Labor Standards Act, an employee’s “ordinary wage” is used as the basis for calculating various statutory benefits. Prior to the Supreme Court of Korea’s decision described below, we and other companies in Korea had interpreted the guidelines issued by the Ministry of Employment and Labor as excluding fixed bonuses that are paid other than on a monthly basis, such as bi monthly, quarterly or biannually paid bonuses, from employees’ ordinary wages.

On December 18, 2013, the Supreme Court of Korea ruled that regularly paid bonuses, including those that are paid other than on a monthly basis, are included in the scope of employees’ ordinary wages if these bonuses are paid “regularly” and “uniformly” on a “fixed basis” notwithstanding

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differential amounts based on seniority. Under this decision, any provision of a collective bargaining agreement or other agreements that attempt to exclude such regular bonuses from employees’ ordinary wages will be deemed void for violation of the mandatory provisions of Korean law.

The Supreme Court of Korea’s decision clarified that if payment of a regular bonus is limited only to those working for the employer on a specific date, such bonus is not fixed and thus does not constitute part of an employee’s ordinary wage. The Ministry of Employment and Labor subsequently published guidelines on January 23, 2014 (the “Guidelines”). According to the Guidelines, the Government excludes, from ordinary wages, regular bonuses contingent on employment on a specific date. Based on the Supreme Court of Korea’s decision and the Guidelines, we believe that regular bonuses we have paid to our employees are likely not required to be included in their ordinary wages because we have paid regular bonuses only to those working for us on the date of payment calculation, the 15th day of each month. However, if we are nonetheless determined to have underpaid employees by under-calculating their ordinary wages over the past three years or in the future, we may be liable for additional payments reflecting the expanded scope of employees’ ordinary wages. Any such additional payments may have an adverse effect on our financial condition and results of operations.

Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common shares and ADSs.

Relations between Korea and North Korea have been tense throughout Korea’s modern history. The level of tension between the two Koreas has fluctuated and may increase abruptly as a result of current and future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon and ballistic missile programs as well as its hostile military actions against Korea. Some of the significant incidents in recent years include the following:

• North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and conducted six rounds of nuclear tests since October 2006, including claimed detonations of hydrogen bombs, which are more powerful than plutonium bombs, and warheads that can be mounted on ballistic missiles. Over the years, North Korea has also conducted a series of ballistic missile tests, including missiles launched from submarines and intercontinental ballistic missiles that it claims can reach the United States mainland. In response, the Government has repeatedly condemned the provocations and flagrant violations of relevant United Nations Security Council resolutions. In February 2016, the Government also closed the inter-Korea Gaesong Industrial Complex in response to North Korea’s fourth nuclear test in January 2016. Internationally, the United Nations Security Council has passed a series of resolutions condemning North Korea’s actions and significantly expanding the scope of sanctions applicable to North Korea, most recently in December 2017 in response to North Korea’s intercontinental ballistic missile test in November 2017. Over the years, the United States and the European Union have also expanded their sanctions applicable to North Korea.

• In August 2015, two Korean soldiers were injured in a landmine explosion near the Korean demilitarized zone. Claiming the landmines were set by North Koreans, the Korean army reinitiated its propaganda program toward North Korea utilizing loudspeakers near the demilitarized zone. In retaliation, the North Korean army fired artillery rounds on the loudspeakers, resulting in the highest level of military readiness for both Koreas.

• In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the crewmen on board. The Government formally accused North Korea of causing the sinking, while North Korea denied responsibility. Moreover, in November 2010, North Korea fired more than one hundred artillery shells that hit Korea’s Yeonpyeong Island near the Northern Limit Line, which acts as the de facto maritime boundary between Korea and

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North Korea on the west coast of the Korean peninsula, causing casualties and significant property damage. The Government condemned North Korea for the attack and vowed stern retaliation should there be further provocation.

North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea.

Although a bilateral summit between the two Koreas was held on April 27, 2018 and there has been an announcement in March 2018 of a potential summit between the United States and North Korea, there can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the future. Any further increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis, high-level contacts between Korea and North Korea break down or further military hostilities occur, could have a material adverse effect on the Korean economy and on our business, financial condition and results of operations.

If you surrender your ADRs to withdraw shares of our common stock, you may not be allowed to deposit the shares again to obtain ADRs.

Under the deposit agreement, holders of shares of our common stock may deposit those shares with the ADR depositary’s custodian in Korea and obtain ADRs, and holders of ADRs may surrender ADRs to the ADR depositary and receive shares of our common stock. However, under current Korean laws and regulations, the depositary bank is required to obtain our prior consent for the number of shares to be deposited in any given proposed deposit that exceeds the difference between (i) the aggregate number of shares deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent offerings of ADSs and stock dividends or other distributions related to these ADSs) and (ii) the number of shares on deposit with the depositary bank at the time of such proposed deposit. It is possible that we may not give the consent. As a result, if you surrender ADRs and withdraw shares of common stock, you may not be able to deposit the shares again to obtain ADRs. See “Item 10. Additional Information — Item 10.D. Exchange Controls.”

You may not be able to exercise preemptive rights for additional shares of common stock and may suffer dilution of your equity interest in us.

The Commercial Code and our articles of incorporation require us, with some exceptions, to offer shareholders the right to subscribe for new shares in proportion to their existing ownership percentage whenever new shares are issued. If we issue new shares to persons other than our shareholders (See “Item 10.B. Memorandum and Articles of Association — Preemptive Rights and Issuance of Additional Shares”), a holder of our ADSs will experience dilution of such holding. If none of these exceptions is available, we will be required to grant preemptive rights when issuing additional common shares under Korean law. Under the deposit agreement governing the ADSs, if we offer any rights to subscribe for additional shares of our common stock or any rights of any other nature, the ADR depositary, after consultation with us, may make the rights available to you or use reasonable efforts to dispose of the rights on your behalf and make the net proceeds available to you. The ADR depositary, however, is not required to make available to you any rights to purchase any additional shares unless it deems that doing so is lawful and feasible and:

• a registration statement filed by us under the Securities Act is in effect with respect to those shares; or

• the offering and sale of those shares is exempt from or is not subject to the registration requirements of the Securities Act.

We are under no obligation to file any registration statement under the Securities Act to enable you to exercise preemptive rights in respect of the common shares underlying the ADSs, and we cannot assure you that any registration statement would be filed or that an exemption from the

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registration requirement under the Securities Act would be available. Accordingly, if a registration statement is required for you to exercise preemptive rights but is not filed by us, you will not be able to exercise your preemptive rights for additional shares and may suffer dilution of your equity interest in us.

U.S. investors may have difficulty enforcing civil liabilities against us and our directors and senior management.

We are incorporated in Korea with our principal executive offices located in Seoul. The majority of our directors and senior management are residents of jurisdictions outside the United States, and the majority of our assets and the assets of such persons are located outside the United States. As a result, U.S. investors may find it difficult to effect service of process within the United States upon us or such persons or to enforce outside the United States judgments obtained against us or such persons in U.S. courts, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or such persons in courts in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for a U.S. investor to bring an action in a Korean court predicated upon the civil liability provisions of the U.S. federal securities laws against our directors and senior management and non-U.S. experts named in this annual report.

We expect to continue operations and investments relating to countries targeted by United States and European Union economic sanctions.

The U.S. Department of the Treasury’s Office of Foreign Assets Control, or “OFAC,” enforces certain laws and regulations (“OFAC Sanctions”) that impose restrictions upon U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of OFAC Sanctions (“U.S. Sanctions Targets”). U.S. persons are also generally strictly prohibited from facilitating such activities or transactions. Similarly, the European Union enforces certain laws and regulations (“E.U. Sanctions”) that impose restrictions upon nationals of E.U. member states, persons located within E.U. member states, entities incorporated or constituted under the law of an E.U. member state, or business conducted in whole or in part in E.U. member states with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of E.U. Sanctions (“E.U. Sanctions Targets” and together with U.S. Sanctions Targets, “Sanctions Targets”). E.U. persons are also generally prohibited from activities that promote such activities or transactions.

We engage in limited business activities in countries that are deemed Sanctions Targets, including Iran, Sudan and Cuba. We produce and export, typically through our sales subsidiaries, steel products to such countries, including automotive steel sheets and other steel materials to Iranian entities. Our subsidiaries also engage in limited business activities in countries that are deemed Sanctions Targets. In particular, POSCO Daewoo engages in the trading of steel, raw materials and other items with entities in countries that are deemed Sanctions Targets, including Iran, Sudan and Cuba. We believe that such activities and investments do not involve any U.S. goods or services. Our activities in Iran, Sudan and Cuba accounted for approximately 0.7% of our consolidated revenues in 2015, 0.5% in 2016 and 0.6% in 2017.

We expect to continue to engage in business activities and make investments in countries that are deemed Sanctions Targets over the foreseeable future. Although we believe that OFAC Sanctions under their current terms are not applicable to our current activities, our reputation may be adversely affected, some of our U.S. investors may be required to divest their investments in us under the laws of certain U.S. states or under internal investment policies or may decide for reputational reasons to divest such investments. We are aware of initiatives by U.S. governmental entities and U.S. institutional investors, such as pension funds, to adopt or consider adopting laws, regulations or

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policies prohibiting transactions with or investment in, or requiring divestment from, entities doing business with countries identified as state sponsors of terrorism. We cannot assure you that the foregoing will not occur or that such occurrence will not have a material adverse effect on the value of our securities.

This annual report contains “forward-looking statements” that are subject to various risks and uncertainties.

This annual report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “should,” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. The uncertainties in this regard include, but are not limited to, those identified in the risk factors discussed above. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances.

Item 4.  Information on the Company

Item 4.A.  History and Development of the Company

We were established by the Government on April 1, 1968, under the Commercial Code, to manufacture and distribute steel rolled products and plates in the domestic and overseas markets. The Government owned more than 70% of our equity until 1988, when the Government reduced its ownership of our common stock to 35% through a public offering and listing our shares on the KRX KOSPI Market. In December 1998, the Government sold all of our common stock it owned directly, and The Korea Development Bank completed the sale of our shares that it owned in September 2000. The Government no longer holds any direct interest in us, and our outstanding common stock is currently held by individuals and institutions. See “Item 7. Major Shareholders and Related Party Transactions — Item 7A. Major Stockholders.”

Our legal and commercial name is POSCO. Our principal executive offices are located at POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea 06194, and our telephone number is (822) 3457-0114.

Item 4.B.  Business Overview

The Company

We are the largest fully integrated steel producer in Korea, and one of the largest steel producers in the world, based on annual crude steel production. We produced approximately 42.2 million tons of crude steel and stainless steel in 2017, a substantial portion of which was produced at Pohang Works and Gwangyang Works. As of December 31, 2017, we had approximately 47.6 million tons of annual crude steel and stainless steel production capacity, including 17.6 million tons of production capacity Pohang Works and 24.8 million tons of production capacity of Gwangyang

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Works. We believe Pohang Works and Gwangyang Works are two of the most technologically advanced integrated steel facilities in the world. We manufacture and sell a diversified line of steel products, including cold rolled and hot rolled products, stainless steel products, plates, wire rods and silicon steel sheets, and we are able to meet a broad range of customer needs from manufacturing industries that consume steel, including automotive, shipbuilding, home appliance, engineering and machinery industries.

Korea is our most important market. Domestic sales accounted for 39.0% of our total revenue from steel products produced and sold by us in 2017 and 39.4% in 2016. On a non-consolidated basis, we believe that we had an overall market share of approximately 43% of the total sales volume of steel products sold in Korea in 2017 and approximately 41% in 2016. Our export sales and overseas sales to customers abroad accounted for 61.0% of our total revenue from steel products produced and sold by us in 2017 and 60.6% in 2016. Our major export market is Asia, with China accounting for 28.5%, Asia other than China and Japan accounting for 23.3%, and Japan accounting for 11.3% of our total steel export revenue from steel products produced and exported by us in 2017 and China accounting for 29.0%, Asia other than China and Japan accounting for 23.9%, and Japan accounting for 10.4% of our total steel export revenue from steel products produced and exported by us in 2016.

We also engage in businesses that complement our steel manufacturing operations as well as carefully seek out promising investment opportunities to diversify our businesses both vertically and horizontally, in part to prepare for the eventual maturation of the Korean steel market. POSCO E&C is one of the leading engineering and construction companies in Korea that primarily engages in the planning, design and construction of industrial plants and architectural works and civil engineering. POSCO Daewoo is a global trading company that primarily engages in trading of steel and raw materials as well as investing in energy and mineral development projects throughout the world. POSCO Energy Corporation is the largest private power generation company in Korea.

We generated revenue of Won 52,940 billion and profit of Won 1,032 billion in 2016, compared to revenue of Won 60,187 billion and profit of Won 2,909 billion in 2017. We had total assets of Won 80,138 billion and total equity of Won 45,765 billion as of December 31, 2016, compared to total assets of Won 79,786 billion and total equity of Won 47,327 billion as of December 31, 2017.

Major Products

We manufacture and sell a broad line of steel products, including the following:

• cold rolled products;

• hot rolled products;

• stainless steel products;

• plates;

• wire rods; and

• silicon steel sheets.

The table below sets out our revenue of steel products produced by us and directly sold to external customers (either by us or through POSCO Processing & Service Co., Ltd. (“POSCO P&S”), our former sales subsidiary that primarily engaged in sale of steel products produced by us, prior to its merger into POSCO Daewoo in March 2017), which are recognized as external revenue of the Steel Segment, by major steel product categories for the periods indicated. Such amounts do not include steel products produced by us and sold to our consolidated subsidiaries other than POSCO P&S (including POSCO Daewoo). Although our external revenue of the Steel Segment increased in 2017 compared to 2016, they were negatively impacted in 2017 by the recognition of the external revenue of

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POSCO P&S under the Trading Segment commencing March 2017 following its merger into POSCO Daewoo.

	For the Year Ended December 31,
	2015					2016					2017
Steel Products	Billions of Won		%			Billions of Won		%			Billions of Won		%
Cold rolled products	￦	8,373		29.6	%	￦	8,467		31.5	%	￦	9,441		31.2	%
Hot rolled products		4,685		16.6			4,377		16.3			5,101		16.9
Stainless steel products		6,085		21.5			6,064		22.6			6,624		21.9
Plates		2,809		9.9			2,762		10.3			3,087		10.2
Wire rods		1,932		6.8			1,747		6.5			1,880		6.2
Silicon steel sheets		1,323		4.7			1,100		4.1			1,025		3.4
Sub-total		25,208		89.1			24,517		91.3			27,159		89.8
Others		3,085		10.9			2,327		8.7			3,072		10.2
Total	￦	28,293		100.0	%	￦	26,844		100.0	%	￦	30,230		100.0	%

The table below sets out our sales volume of the principal categories of steel products produced by us and directly sold to external customers (either by us or through POSCO P&S prior to its merger into POSCO Daewoo in March 2017), which are recognized as external sales volume of the Steel Segment, by major steel product categories for the periods indicated. Such amounts do not include steel products produced by us and sold to our consolidated subsidiaries other than POSCO P&S (including POSCO Daewoo). In 2017, our external sales volume of the Steel Segment was negatively impacted by the recognition of the external sales volume of POSCO P&S under the Trading Segment commencing March 2017 following its merger into POSCO Daewoo.

	For the Year Ended December 31,
	2015					2016					2017
Steel Products	Thousands of Tons		%			Thousands of Tons		%			Thousands of Tons		%
Cold rolled products		11,995		38.0	%		12,713		38.7	%		11,279		37.5	%
Hot rolled products		8,541		27.0			8,632		26.2			7,786		25.9
Stainless steel products		2,758		8.7			3,027		9.2			2,874		9.6
Plates		4,588		14.5			4,748		14.4			4,896		16.3
Wire rods		2,667		8.4			2,737		8.3			2,333		7.8
Silicon steel sheets		1,031		3.3			1,032		3.1			877		2.9
Total (1)		31,580		100.0	%		32,888		100.0	%		30,046		100.0	%

(1) Not including sales volume of steel products categorized under “others.”

In addition to steel products produced by us and directly sold to external customers (either by us or through POSCO P&S prior to its merger into POSCO Daewoo in March 2017), we engage our consolidated sales subsidiaries (including POSCO Daewoo) to sell our steel products produced by us. Our revenue from steel products produced by us and sold to our consolidated sales subsidiaries that in turn sold them to their external customers amounted to Won 8,365 billion in 2015, Won 6,403 billion in 2016 and Won 7,385 billion in 2017. Sales of such steel products by our consolidated sales subsidiaries to external customers are recognized as external revenue of the Trading Segment.

Cold Rolled Products

Cold rolled coils and further refined galvanized cold rolled products are used mainly in the automotive industry to produce car body panels. Other users include the household goods, electrical appliances, engineering and metal goods industries.

Our deliveries of cold rolled products produced by us and directly sold to external customers amounted to 11.3 million tons in 2017, representing 37.5% of our total sales volume of principal steel products produced by us and directly sold to external customers.

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Cold rolled products constitute our largest product category in terms of sales volume and revenue from steel products produced by us and directly sold to external customers. In 2017, our sales volume of cold rolled products produced by us and directly sold to external customers decreased by 11.3% compared to our sales volume in 2016 primarily due to the impact of the merger of POSCO P&S into POSCO Daewoo described above as well as rationalization of our production facilities in 2017 that reduced production of cold rolled products.

Including sales of cold rolled products produced by us and sold through our consolidated sales subsidiaries in addition to cold rolled products produced by us and directly sold to external customers, we had a domestic market share for cold rolled products of approximately 40% on a non-consolidated basis in 2017.

Hot Rolled Products

Hot rolled coils and sheets have many different industrial applications. They are used to manufacture structural steel used in the construction of buildings, industrial pipes and tanks, and automobile chassis. Hot rolled coil is also manufactured in a wide range of widths and thicknesses as the feedstock for higher value-added products such as cold rolled products and silicon steel sheets.

Our deliveries of hot rolled products produced by us and directly sold to external customers amounted to 7.8 million tons in 2017, representing 25.9% of our total sales volume of principal steel products produced by us and directly sold to external customers. The largest customers of our hot rolled products are downstream steelmakers in Korea which use the products to manufacture pipes and cold rolled products.

Hot rolled products constitute our second largest product category in terms of sales volume and third largest product category in terms of revenue from steel products produced by us and directly sold to external customers. In 2017, our sales volume of hot rolled products produced by us and directly sold to external customers decreased by 9.8% compared to our sales volume in 2016 primarily due to the impact of the merger of POSCO P&S into POSCO Daewoo described above as well as rationalization of our production facilities in 2017 that reduced production of hot rolled products.

Including sales of hot rolled products produced by us and sold through our consolidated sales subsidiaries in addition to hot rolled products produced by us and directly sold to external customers, we had a domestic market share for hot rolled products of approximately 39% on a non-consolidated basis in 2017.

Stainless Steel Products

Stainless steel products are used to manufacture household goods and are also used by the chemical industry, paper mills, the aviation industry, the automotive industry, the construction industry and the food processing industry.

Our deliveries of stainless steel products produced by us and directly sold to external customers amounted to 2.9 million tons in 2017, representing 9.6% of our total sales volume of principal steel products produced by us and directly sold to external customers.

Stainless steel products constitute our second largest product category in terms of revenue from steel products produced by us and directly sold to external customers. Although sales of stainless steel products accounted for only 9.6% of total sales volume of the principal steel products produced by us and directly sold to external customers in 2017, they represented 21.9% of our total revenue from steel products in 2017. In 2017, our sales volume of stainless steel products produced by us and directly sold to external customers decreased by 5.1% compared to our sales volume in 2016.

Including sales of stainless steel products produced by us and sold through our consolidated sales subsidiaries in addition to stainless steel products produced by us and directly sold to external

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customers, we had a domestic market share for stainless steel products of approximately 43% on a non-consolidated basis in 2017.

Plates

Plates are used in shipbuilding, structural steelwork, offshore oil and gas production, power generation, mining, and the manufacture of earth-moving and mechanical handling equipment, boiler and pressure vessels and other industrial machinery.

Our deliveries of plates produced by us and directly sold to external customers amounted to 4.9 million tons in 2017, representing 16.3% of our total sales volume of principal steel products produced by us and directly sold to external customers. The Korean shipbuilding industry, which uses plates to manufacture chemical tankers, rigs, bulk carriers and containers, and the construction industry are our largest customers of plates.

In 2017, our sales volume of plates produced by us and directly sold to external customers increased by 3.1% compared to our sales volume in 2016 primarily due to an increase in sales of plates from PT. Krakatau POSCO.

Including sales of plates produced by us and sold through our consolidated sales subsidiaries in addition to plates produced by us and directly sold to external customers, we had a domestic market share for plates of approximately 48% on a non-consolidated basis in 2017.

Wire Rods

Wire rods are used mainly by manufacturers of wire, fasteners, nails, bolts, nuts and welding rods. Wire rods are also used in the manufacture of coil springs, tension bars and tire cords in the automotive industry.

Our deliveries of wire rods produced by us and directly sold to external customers amounted to 2.3 million tons in 2017, representing 7.8% of our total sales volume of principal steel products produced by us and directly sold to external customers. The largest customers for our wire rods are manufacturers of wire ropes and fasteners.

In 2017, our sales volume of wire rods produced by us and directly sold to external customers decreased by 14.7% compared to 2016 primarily due to the impact of the merger of POSCO P&S into POSCO Daewoo described above.

Including sales of wire rods produced by us and sold through our consolidated sales subsidiaries in addition to wire rods produced by us and directly sold to external customers, we had a domestic market share for wire rods of approximately 57% on a non-consolidated basis in 2017.

Silicon Steel Sheets

Silicon steel sheets are used mainly in the manufacture of power transformers and generators and rotating machines.

Our deliveries of silicon steel sheets produced by us and directly sold to external customers amounted to 0.9 million tons in 2017, representing 2.9% of our total sales volume of principal steel products produced by us and directly sold to external customers.

In 2017, our sales volume of silicon steel sheets produced by us and directly sold to external customers decreased by 15.1% compared to 2016 primarily due to a decrease in sales of silicon steel sheets in China.

Including sales of silicon steel sheets produced by us and sold through our consolidated sales subsidiaries in addition to silicon steel sheets produced by us and directly sold to external customers,

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we had a domestic market share for silicon steel sheets of approximately 81% on a non-consolidated basis in 2017.

Others

Other products include lower value-added semi-finished products such as pig iron, billets, blooms and slab.

Markets

Korea is our most important market. Domestic sales represented 39.0% of our total revenue from steel products produced and sold by us in 2017. Our export sales and overseas sales to customers abroad represented 61.0% of our total revenue from steel products in 2017. Our sales strategy has been to devote our production primarily to satisfy domestic demand, while seeking export sales to utilize capacity to the fullest extent and to expand our international market presence.

Domestic Market

We primarily sell in Korea higher value-added and other finished products to end-users and semi-finished products to other steel manufacturers for further processing. Local distribution companies and sales affiliates sell finished steel products to low-volume customers. We provide service technicians for large customers and distributors in each important product area.

The table below sets out our estimate of the market share of steel products sold in Korea for the periods indicated based on sales volume.

	For the Year Ended December 31,
Source	2015			2016			2017
POSCO’s sales (1)		40.8	%		40.6	%		43.4	%
Other domestic steel companies’ sales		27.7			27.6			28.2
Imports		31.5			31.8			28.4
Total		100.0	%		100.0	%		100.0	%

(1) POSCO’s sales volume includes steel products produced by us (but not by our subsidiaries) and sold through our consolidated sales subsidiaries in addition to steel products produced by us (but not by our subsidiaries) and directly sold to external customers.

Exports

Our export sales and overseas sales to customers abroad represented 61.0% of our total revenue from steel products produced and sold by us in 2017, 63.1% of which was generated from exports sales and overseas sales to customers in Asian countries. Our export sales and overseas sales to customers abroad in terms of revenue from such products increased by 13.9% from Won 20,163 billion in 2016 to Won 22,963 billion in 2017.

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The tables below set out our export sales and overseas sales to customers abroad in terms of revenue from steel products produced and sold by us (including our consolidated sales subsidiaries), by geographical market and by product for the periods indicated.

	For the Year Ended December 31,
	2015				2016				2017
Region	Billions of Won		%		Billions of Won		%		Billions of Won		%
China	￦	5,541		25.3%	￦	5,840		29.0%	￦	6,542		28.5%
Asia (other than China and Japan)		6,174		28.2		4,821		23.9		5,354		23.3
Japan		2,075		9.5		2,089		10.4		2,601		11.3
Europe		1,751		8.0		1,914		9.5		2,181		9.5
Middle East		372		1.7		187		0.9		163		0.7
North America		2,162		9.9		2,019		10.0		1,947		8.5
Others		3,826		17.5		3,292		16.3		4,176		18.2
Total	￦	21,901		100.0%	￦	20,163		100.0%	￦	22,963		100.0%

	For the Year Ended December 31,
	2015				2016				2017
Steel Products	Billions of Won		%		Billions of Won		%		Billions of Won		%
Cold rolled products	￦	6,373		29.1%	￦	6,852		34.0%	￦	9,224		40.2%
Hot rolled products		4,032		18.4		2,999		14.9		2,604		11.3
Stainless steel products		5,265		24.0		5,227		25.9		5,345		23.3
Plates		1,465		6.7		1,486		7.4		2,000		8.7
Wire rods		674		3.1		585		2.9		606		2.6
Silicon steel sheets		807		3.7		821		4.1		950		4.1
Others		3,284		15.0		2,194		10.9		2,235		9.7
Total	￦	21,901		100.0%	￦	20,163		100.0%	￦	22,963		100.0%

We distribute our export products mostly through Korean trading companies, including POSCO Daewoo, and our overseas sales subsidiaries. Our largest export market in 2017 was China, which accounted for 28.5% of our export revenue from steel products produced and sold by us. The principal products exported to China were cold rolled products, including continuous galvanized products. Our exports to China amounted to Won 5,840 billion in 2016 and Won 6,542 billion in 2017. Our exports to China increased by 12.0% in 2017 primarily due to an increase in sales of automotive steel sheets.

Our second largest export market in 2017 was Asia (other than China and Japan), which accounted for 23.3% of our export revenue from steel products produced and sold by us. The principal products exported to Asia (other than China and Japan) were cold rolled products, including continuous galvanized products. Our exports to Asia (other than China and Japan) increased by 11.1% from Won 4,821 billion in 2016 to Won 5,354 billion in 2017 primarily due to an increase in sales of automotive steel sheets in Southeast Asia.

Anti-Dumping, Safeguard and Countervailing Duty Proceedings

From time to time, our exporting activities have become subject to anti-dumping, safeguard and countervailing proceedings. As a steel producer with global sales and operations, we are involved in trade remedy proceedings in markets worldwide, including in the United States. We proactively participate in and plan for such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, all such cases have been product and market-specific, and thus have been limited in scope relative to our global sales and operations. We continue to carefully monitor developments with respect to trade remedy policy in all markets in which we participate and,

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where necessary, vigorously defend our rights through litigation before tribunals such as the U.S. Court of International Trade. Our products that are subject to anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs in the aggregate currently do not account for a material portion of our total sales, and such proceedings have not had a material adverse impact on our business and operations in recent years.

Pricing Policy

We determine the sales price of our products based on market conditions. In setting prices, we take into account our costs, including those of raw materials, supply and demand in the Korean market, exchange rates, and conditions in the international steel market. Our prices can fluctuate considerably over time, depending on market conditions and other factors. The prices of our higher value-added steel products in the largest markets are determined considering the prices of similar products charged by our competitors.

Both our export prices and domestic sales prices decreased from 2014 to 2016, reflecting production over-capacity in the global steel industry. In 2017, our export prices and domestic sales prices increased, as consolidation of the steel industry in China led to a decrease in export volume from China, which in turn had a positive impact on global steel prices. We may decide to adjust our sales prices in the future subject to market demand for our products, prices of raw materials, the production outlook of the global steel industry and global economic conditions in general.

Raw Materials

Steel Production

The principal raw materials used in producing steel through the basic oxygen steelmaking method are iron ore and coal. We require approximately 1.7 tons of iron ore and 0.8 tons of coal to produce one ton of steel. We import all of the coal and virtually all of the iron ore that we use. In 2017, POSCO imported approximately 52.9 million dry metric tons of iron ore and 27.4 million wet metric tons of coal. Iron ore is imported primarily from Australia, Brazil and Canada. Coal is imported primarily from Australia, Canada and Russia.

We purchase a substantial portion of our iron ore and coal imports pursuant to long-term contracts. Our long-term supply contracts generally have terms of three to ten years and provide for periodic price adjustments to the then-market prices. We typically adjust the prices on a quarterly basis and maintain approximately one month of inventory of raw materials. Such price adjustments are driven by various factors, including the global economic outlook, global market prices of raw materials and steel products, supply and demand outlook of raw materials and production costs of raw materials. In the case of coal, globally influential buyers and sellers of coal determine benchmark prices of coal, based on which other buyers and sellers negotiate their prices after taking into consideration the quality of coal and other factors. In the case of iron ore, the supplier and we typically agree on the purchase price primarily based on the spot market price periodically announced by Platts (Iron Ore 62% Fe, CFR China Index). We or the suppliers may cancel the long-term contracts only if performance under the contracts is prevented by causes beyond our or their control and these causes continue for a specified period.

We also make investments in exploration and production projects abroad to enhance our ability to meet the requirements for high-quality raw materials, either as part of a consortium or through an acquisition of a minority interest. In 2017, we purchased approximately 37% of our iron ore imports and 21% of our coal imports from foreign mines in which we have made investments. Our major investments to procure supplies of coal, iron ore and nickel are primarily located in Australia, Brazil, New Caledonia and Canada. We will continue to selectively seek opportunities to enter into additional strategic relationships that would enhance our ability to meet the requirements for principal raw materials.

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The average market price of coal per wet metric ton (benchmark free on board price of Peak Downs Australian premium hard coking coal) was US$102 in 2015, US$114 in 2016 and US$217 in 2017. The average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China index announced by Platts) was US$51 in 2015, US$54 in 2016 and US$64 in 2017. We currently do not depend on any single country or supplier for our coal or iron ore.

Stainless Steel Production

The principal raw materials for the production of stainless steel are ferronickel, ferrochrome and stainless steel scrap. We purchase a majority of our ferronickel primarily from suppliers in Korea that procure nickel ore from New Caledonia, and the remainder primarily from leading suppliers in Indonesia, Japan and Ukraine. Our primary suppliers of ferrochrome are located in South Africa, India and Kazakhstan. Our stainless steel scraps are primarily supplied by domestic and overseas suppliers in Japan and Southeast Asia. Revert scraps from the Pohang Steelworks are also used for our stainless steel production. The average market price of nickel per ton on the London Metal Exchange was US$11,836 in 2015, US$9,599 in 2016 and US$10,402 in 2017.

Transportation

In order to meet our transportation needs for iron ore and coal, we have entered into long-term contracts with shipping companies in Korea to retain a fleet of dedicated vessels. These dedicated vessels transported approximately 82% of the total requirements in 2017, and the remaining approximately 18% was transported by vessels retained through short to medium term contracts, depending on market conditions. We plan to continue to optimize the fleet of dedicated vessels that we use by 2020 in order to cope with changes in the global shipping environment, as well as upgrade some of the existing vessels with others that utilize more energy-efficient technologies.

The Steelmaking Process

Our major production facilities, Pohang Works and Gwangyang Works, produce steel by the basic oxygen steelmaking method. The stainless steel plant at Pohang Works produces stainless steel by the electric arc furnace method. Continuous casting improves product quality by imparting a homogenous structure to the steel. Pohang Works and Gwangyang Works produce all of their products through the continuous casting.

Steel — Basic Oxygen Steelmaking Method

First, molten pig iron is produced in a blast furnace from iron ore, which is the basic raw material used in steelmaking. Molten pig iron is then refined into molten steel in converters by blowing pure oxygen at high pressure to remove impurities. Different desired steel properties may also be obtained by regulating the chemical contents.

At this point, molten steel is made into semi-finished products such as slabs, blooms or billets at the continuous casting machine. Slabs, blooms and billets are produced at different standardized sizes and shapes. Slabs, blooms and billets are semi-finished lower margin products that we either use to produce our further processed products or sell to other steelmakers that produce further processed steel products.

Slabs are processed to produce hot rolled coil products at hot strip mills or to produce plates at plate mills. Hot rolled coils are an intermediate stage product that may either be sold to our customers as various finished products or be further processed by us or our customers into higher value-added products, such as cold rolled sheets and silicon steel sheets. Blooms and billets are processed into wire rods at wire rod mills.

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Stainless Steel — Electric Arc Furnace Method

Stainless steel is produced from stainless steel scrap, chrome, nickel and steel scrap using an electric arc furnace. Stainless steel is then processed into higher value-added products by methods similar to those used for steel production. Stainless steel slabs are produced at a continuous casting mill. The slabs are processed at hot rolling mills into stainless steel hot coil, which can be further processed at cold strip mills to produce stainless cold rolled steel products.

Competition

Domestic Market

We are the largest fully integrated steel producer in Korea. In hot rolled products, where we had a market share of approximately 39% on a non-consolidated basis in 2017, we face competition from a Korean steel producer that operates mini-mills and produces hot rolled coil products from slabs and from various foreign producers, primarily from China and Japan. In cold rolled products and stainless steel products, where we had a market share of approximately 40% and 43%, respectively, on a non-consolidated basis in 2017, we compete with smaller specialized domestic manufacturers and various foreign producers, primarily from China and Japan. For a discussion of domestic market shares, see “— Markets — Domestic Market.”

We may face increased competition in the future from new specialized or integrated domestic manufacturers of steel products in the Korean market. Our biggest competitor in Korea is Hyundai Steel Co., Ltd. with an annual crude steel production of approximately 21 million tons.

The Korean Government does not impose quotas on or provide subsidies to local steel producers. As a World Trade Organization signatory, Korea has also removed all steel tariffs.

Export Markets

The competitors in our export markets include all the leading steel manufacturers of the world. In the past decade, there has been a trend toward industry consolidation among our competitors, and smaller competitors in the global steel market today may become larger competitors in the future. In recent years, a slowdown in domestic demand for steel products in China resulting from slowed economic growth, combined with an expansion in steel production capacity, has led to production over-capacity in the Chinese steel industry, which in turn has led the Chinese government to pursue aggressive consolidation in the Chinese steel industry. Competition from global steel manufacturers with significant production capacity such as ArcelorMittal S.A., as well as larger competitors from emerging markets, especially from China and India, could result in a significant increase in competition. Major competitive factors include range of products offered, quality, price, delivery performance and customer service. Our larger competitors may use their resources, which may be greater than ours, against us in a variety of ways, including by making additional acquisitions, investing more aggressively in product development and capacity and displacing demand for our export products.

Various export markets currently impose tariffs on different types of steel products. However, we do not believe that tariffs significantly affect our ability to compete in these markets.

Subsidiaries and Global Joint Ventures

Steel Production

In order to effectively implement our strategic initiatives and to solidify our leadership position in the global steel industry, we have established various subsidiaries and joint ventures in Korea and elsewhere around the world that engage in steel production activities.

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China. We entered into an agreement with Sagang Group Co. to establish Zhangjiagang Pohang Stainless Steel Co., Ltd., a joint venture company in China for the manufacture and sale of stainless cold rolled steel products. We have an 82.5% interest in the joint venture (including 23.9% interest held by POSCO China Holding Corporation), which commenced production of stainless cold rolled steel products in December 1998. Zhangjiagang Pohang Stainless Steel produced 1,159 thousand tons of stainless steel products in 2017. See “— Production Facilities Abroad — Zhangjiagang Pohang Stainless Steel.”

Indonesia. We entered into an agreement with PT. Krakatau Steel (Persero) Tbk. to establish PT. Krakatau POSCO Co., Ltd. (“PT. Krakatau POSCO”), a joint venture company in Indonesia for the manufacture and sale of plates and slabs. We hold a 70.0% interest in the joint venture. We completed the construction of a steel manufacturing plant in December 2013 with an annual production capacity of 3.0 million tons of plates and slabs. PT. Krakatau POSCO produced 2.9 million tons of plates and slabs in 2017. See “— Production Facilities Abroad — PT. Krakatau POSCO.”

Vietnam. We established POSCO SS VINA Co., Ltd., a wholly owned subsidiary engaged in the manufacture and sale of shape steel and steel reinforcement products. The plant became operational in June 2015, with an annual production capacity of 1.1 million tons of shape steel and steel reinforcement products. POSCO SS VINA Co., Ltd. produced 905 thousand tons of shape steel and steel reinforcement products in 2017. See “Production Facilities Abroad — POSCO SS VINA.”

Trading

Our trading activities consist primarily of trading activities of POSCO Daewoo. Our consolidated subsidiaries that also engage in trading activities include POSCO Asia Company Limited located in Hong Kong, POSCO Japan Co., Ltd. located in Tokyo, Japan, POSCO America Corporation located in Georgia, U.S.A. and POSCO South Asia Co., Ltd. located in Bangkok, Thailand. In March 2017, POSCO P&S, which primarily engaged in sale of steel products produced by us, merged into POSCO Daewoo.

POSCO Daewoo is a global trading company that primarily engages in trading of steel and raw materials as well as investing in energy and mineral development projects. It also manufactures and sells textiles. POSCO Daewoo was established in December 2000 when the international trading and construction businesses of Daewoo Corporation were spun off into three separate companies as part of a debt workout program of Daewoo Corporation.

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The following table sets forth a breakdown of POSCO Daewoo’s total consolidated sales by export sales, domestic sales and third-country trades as well as product category for the periods indicated:

	For the Year Ended December 31,
Product Category	2015					2016					2017
	(in billions of Won, except percentages)
Export trading sales:
Steel and metal	￦	4,648		26.5	%	￦	4,185		25.4	%	￦	5,059		22.4	%
Chemical and commodities		1,445		8.2			1,277		7.7			1,429		6.3
Automobile and machinery parts		2,003		11.4			1,986		12.0			2,224		9.9
Electronics and miscellaneous items		42		0.2			3		0.0			—		—
Natural resources items		—		—			2		0.0			—		—
Sub-total		8,138		46.4			7,453		45.2			8,712		38.6
Domestic trading sales:
Steel and metal	￦	506		2.9	%	￦	473		2.9	%	￦	2,322		10.3	%
Chemical and commodities		92		0.5			90		0.5			23		0.1
Automobile and machinery parts		62		0.4			40		0.2			59		0.2
Electronics and miscellaneous items		—		—			—		—			—		—
Other goods		23		0.1			—		—			17		0.1
Sub-total		683		3.9			603		3.7			2,421		10.7
Manufactured product sales	￦	6		0.0		￦	13		0.1		￦	502		2.2
Third-Country Trades:
Trading (1)	￦	11,569		66.0	%	￦	10,376		62.9	%	￦	14,969		66.3	%
Natural resources development (1)		714		4.1			1,504		9.1			573		2.5
Manufactured product trading		242		1.4			192		1.2			221		1.0
Total third-country trades		12,525		71.5			12,072		73.2			15,763		69.8
Consolidation adjustments		(3,910	)	(22.3	)		(3,649	)	(22.1	)		(4,826	)	(21.4	)
Total sales	￦	17,527		100.0	%	￦	16,492		100.0	%	￦	22,572		100.0	%

(1) In 2015 and 2017, revenues from trading of raw materials were included as trading revenues. However, in 2016, revenues from trading of raw materials were included as natural resources development revenues.

Trading Activities. POSCO Daewoo’s trading activities consist of exporting and importing a wide variety of products and commodities, including iron and steel, raw materials for steel production, non-ferrous metals, chemicals, automotive parts, machinery and plant equipment, electronics products, agricultural commodities and textiles. POSCO Daewoo is also engaged in third-country trade that does not involve exports from or imports to Korea. The products are obtained from and supplied to numerous suppliers and purchasers in Korea and overseas, which are procured through a global trading network comprised of overseas trading subsidiaries, branches and representative offices. Such subsidiaries and offices support POSCO Daewoo’s trading activities by locating suitable local suppliers and purchasers on behalf of customers, identifying business opportunities and providing information regarding local market conditions.

In most cases, POSCO Daewoo enters into trading transactions after the underlying sale and purchase contracts have been matched, which mitigates inventory and price risks to POSCO Daewoo. POSCO Daewoo typically enters into trading transactions as a principal, and in limited cases as an import or export agent. When acting as a principal or an agent, POSCO Daewoo derives its gross trading profit from the margin between the selling price of the products and the purchase price it pays for such products. In the case of principal transactions, the selling price is recorded as sales and the purchase price is recorded as cost of sales, while only the margin is recorded as sales in the case of agency transactions in which POSCO Daewoo does not assume the risks and rewards of ownership of the goods. In the instances in which it acts as an arranger for a third country transaction, POSCO Daewoo derives its gross trading profit from, and records as sales, the commission paid to it by the customer. The sizes of margins and commissions for POSCO Daewoo’s trading activities vary

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depending on a number of factors, including prevailing supply and demand conditions for the product involved, the cost of financing, insurance, storage and transport and the creditworthiness of the customer, and tends to decline as the product or market matures.

In connection with its export and import transactions, POSCO Daewoo has accounts receivable and payable in a number of currencies, but principally in Dollars. POSCO Daewoo’s exposure to fluctuations in exchange rates, including the Won/Dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO Daewoo’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in Dollars. Although the impact of exchange rate fluctuations is substantially mitigated by such strategies, POSCO Daewoo also periodically enters into derivative contracts, primarily currency forward contracts, to further hedge its foreign exchange risks.

In connection with its trading activities, POSCO Daewoo arranges insurance and product transport at the request of customers, the costs of which generally become reflected in the sales price of the relevant products, and also provides financing services to its purchasers and suppliers as necessary. In the case of trading transactions involving large-scale industrial or construction projects, POSCO Daewoo also provides necessary project planning and organizing services to its customers.

Natural Resources Development Activities. POSCO Daewoo also invests in energy and mineral development projects throughout the world. In particular, POSCO Daewoo holds interests in several gas field projects in Myanmar, where production of gas commenced in July 2013. POSCO Daewoo recognized revenues of approximately Won 652 billion in 2015, Won 530 billion in 2016 and Won 498 billion in 2017 from the Myanmar gas field projects. Such natural resources development projects, while entailing higher risks than the traditional trading business, offer higher potential returns. POSCO Daewoo intends to continue to expand its operations by carefully seeking out promising energy development projects abroad.

Competition. POSCO Daewoo competes principally with six other Korean general trading companies, each of which is affiliated with a major domestic business group, as well as global trading companies based in other countries. In the domestic market, competition for export transactions on behalf of domestic suppliers and import transactions on behalf of domestic purchasers was limited, as most affiliated general trading companies of large Korean business groups generally relied on affiliate transactions for the bulk of their trading business. However, in recent years, many of these Korean general trading companies have reduced their reliance on their affiliated business group and transactions carried out on behalf of their member companies and instead have generally evolved to focus on segments of the import and export markets in which they have a competitive advantage. As a result, competition among Korean general trading companies in the area of traditional trade has become more intense. POSCO Daewoo’s principal competitors in the overseas trading markets include Korean trading companies that operate in various international markets, as well as foreign trading companies, particularly those based in Japan. As POSCO Daewoo diversifies into businesses other than traditional trading such as natural resources development, it also increasingly competes with other Korean and international companies involved in these businesses.

Construction

POSCO E&C is one of the leading engineering and construction companies in Korea, primarily engaged in the planning, design and construction of industrial plants and architectural works and civil engineering projects. In particular, POSCO E&C has established itself as one of the premier engineering and construction companies in Korea through:

• its strong and stable customer base; and

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• its cutting-edge technological expertise obtained from construction of advanced integrated steel plants, as well as participation in numerous modernization and rationalization projects at our Pohang Works and Gwangyang Works.

Leveraging its technical know-how and track record of building some of the leading industrial complexes in Korea, POSCO E&C has also focused on diversifying its operations into construction of high-end apartment complexes and participating in a wider range of architectural works and civil engineering projects, as well as engaging in urban planning and development projects and expanding its operations abroad. One of its landmark urban planning and development projects includes the development of a 5.7 million-square meter area of Songdo International City in Incheon, which POSCO E&C is co-developing with Gale International, a respected real estate developer based in the United States. In September 2015, we completed the sale of our 38.0% interest in POSCO E&C to PIF, the sovereign wealth fund of Saudi Arabia, for US$1.05 billion. In connection with the sale, POSCO E&C and PIF agreed to jointly explore additional business opportunities in Saudi Arabia, including participating in various infrastructure projects sponsored by the Saudi Arabian government.

POSCO E&C also has substantial experience in the energy field obtained from the construction of various power plants for member companies of the POSCO Group, specializing primarily in engineering and construction of liquefied natural gas (“LNG”) and coal-fired thermal power plants. In recent years, POSCO E&C has obtained various orders for such power plants, including LNG-fired power plants in Incheon, Korea and coal-fired thermal power plants in Ventanas and Angamos, Chile. In response to increasing demand from the energy industry, POSCO E&C plans to continue to target opportunities in power plant construction, which it believes offers significant growth potential. In order to further promote efficiency among the member companies of the POSCO Group as well as to enhance the engineering expertise of POSCO E&C, POSCO Engineering Co., Ltd. merged into POSCO E&C in February 2017.

Competition. Competition in the construction industry is based primarily on price, reputation for quality, reliability, punctuality and financial strength of contractors. In Korea, POSCO E&C’s main competition in the construction of residential and non-residential buildings, EPC projects, urban planning and development projects and civil works projects consists of approximately ten major domestic construction companies, all of which are member companies of other large business groups in Korea and are capable of undertaking larger-scale, higher-value-added projects that offer greater potential returns. A series of measures introduced by the Government over the past few years to regulate housing prices in Korea, as well as an increasing popularity of low-bid contracts in civil works project mandates, have contributed to increased competition in the Korean construction industry in recent years. In the overseas markets, POSCO E&C faces competition from local construction companies, as well as international construction companies from other countries, including other major Korean construction companies with overseas operations. Construction companies from developed countries may be more experienced, have greater financial resources and possess more sophisticated technology than POSCO E&C, while construction companies from developing countries often have the advantage of lower wage costs.

Others

As part of our diversification efforts, we strive to identify business opportunities that supplement our steel, trading and construction segments, including power generation, LNG logistics and network and system integration.

POSCO Energy Corporation. In 2006, we acquired the largest domestic private power utility company that operates LNG combined cycle power generation facilities with total power generation capacity of 1,800 megawatts and renamed it POSCO Energy Corporation. Since our acquisition, POSCO Energy Corporation has expanded its power generation capacity by constructing additional power plants in Korea and Southeast Asia. POSCO Energy Corporation’s total power generation

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capacity was approximately 4,526 megawatts as of December 31, 2017. POSCO Energy Corporation is also selectively seeking opportunities to expand into solar, wind and other renewable energy businesses in order to become an integrated provider of energy solutions.

LNG Logistics. We operate an LNG receiving terminal with an aggregate capacity to process up to 2.4 million tons of LNG annually in Gwangyang. In order to achieve maximum operational efficiency of our LNG terminal, we participate in the LNG trading and LNG ship gas trial businesses. We also operate a synthetic natural gas production plant with an annual capacity of 500,000 tons in Gwangyang.

Others. We acquired or established several subsidiaries that address specific services to support the operations of Pohang Works and Gwangyang Works. POSCO ICT Co., Ltd. provides information and technology consulting and system network integration and outsourcing services. POSCO Chemtech Company Ltd. specializes in the manufacturing of refractories and lime used in steel manufacturing processes as well as a wide range of chemical products.

Insurance

We maintain property insurance for our property, plant and equipment that we believe to be consistent with market practice in Korea.

Item 4.C.  Organizational Structure

The following table sets out the jurisdiction of incorporation and our ownership interests of our significant subsidiaries:

Name	Jurisdiction of Incorporation		Percentage of Ownership
POSCO Daewoo Corporation		Korea		62.9	%
POSCO Engineering & Construction Co., Ltd		Korea		52.8	%
POSCO Energy Corporation		Korea		89.0	%
Zhangjiagang Pohang Stainless Steel Co., Ltd.		China		82.5	% (1)
POSCO ICT Co., Ltd.		Korea		65.4	%

(1) POSCO holds a 58.6% interest and POSCO-China holds a 23.9% interest.

Item 4.D.  Property, Plants and Equipment

Our principal properties are Pohang Works, which is located at Youngil Bay on the southeastern coast of Korea, and Gwangyang Works, which is located in Gwangyang City in the southwestern region of Korea. We also maintain and operate production properties abroad, including plants operated by Zhangjiagang Pohang Stainless Steel in China, PT. Krakatau POSCO in Indonesia and POSCO SS Vina in Vietnam. We may increase our production capacity in the future when we increase our capacity as part of our facilities expansion or as a result of continued modernization and rationalization of our existing facilities. For a discussion of major items of our capital expenditures currently in progress, see “Item 5. Operating and Financial Review and Prospects — Item 5.B. Liquidity and Capital Resources — Liquidity — Capital Expenditures and Capital Expansion.”

We are vigorous in our efforts to engage in environmentally responsible management of, and to protect the environment from damage resulting from, our operations. Our levels of pollution control are higher than those mandated by Government standards. We established an on-line environmental monitoring system with real-time feedback on pollutant levels and a forecast system of pollutant concentration in surrounding areas. We also undergo periodic environmental inspection by both internal and external inspectors in accordance with ISO 14001 standards to monitor execution and maintenance of our environmental management plan. We also operate a certification program targeting our suppliers and outsourcing partners, pursuant to which they are encouraged to establish environmental management systems of their own.

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Production Facilities in Korea

Pohang Works

Construction of Pohang Works began in 1970 and ended in 1983. Pohang Works currently has an annual crude steel and stainless steel production capacity of 17.6 million tons. Pohang Works produces a wide variety of steel products. Products produced at Pohang Works include hot rolled sheets, plates, wire rods and cold rolled sheets, as well as specialty steel products such as stainless steel sheets and silicon steel sheets. These products can also be customized to meet the specifications of our customers.

Situated on a site of 8.9 million square meters at Youngil Bay on the southeastern coast of Korea, Pohang Works consists of iron-making, crude steelmaking and continuous casting and other rolling facilities. Pohang Works also has docking facilities capable of accommodating large ships for unloading raw materials, storage areas for raw materials and separate docking facilities for ships carrying products for export. Pohang Works is equipped with a highly advanced computerized production-management system allowing constant monitoring and control of the production process.

Gwangyang Works

Construction of Gwangyang Works began in 1985 on a site of 13.7 million square meters reclaimed from the sea in Gwangyang City in the southwestern region of Korea. Gwangyang Works currently has an annual crude steel production capacity of 24.8 million tons. Gwangyang Works specializes in high volume production of a limited number of steel products. Products manufactured at Gwangyang Works include both hot and cold rolled types.

Gwangyang Works is comprised of iron-making plants, steelmaking plants, continuous casting plants, hot strip mills and thin-slab hot rolling plants. The site also features docking and unloading facilities for raw materials capable of accommodating large ships for unloading raw materials, storage areas for raw materials and separate docking facilities for ships carrying products for export.

We believe Gwangyang Works is one of the most technologically advanced integrated steel facilities in the world. Gwangyang Works has a completely automated, linear production system that enables the whole production process, from iron-making to finished products, to take place without interruption. This advanced system reduces the production time for hot rolled products to only four hours. Like Pohang Works, Gwangyang Works is equipped with a highly advanced computerized production-management system allowing constant monitoring and control of the production process.

Capacity Utilization Rates

The following table sets out the capacity utilization rates of our production facilities in Korea for the periods indicated.

	As of or for the Year Ended December 31,
	2015			2016			2017
Crude steel and stainless steel production capacity as of end of the year (million tons per year)		42.41			42.39			42.39
Actual crude steel and stainless steel output (million tons)		37.97			37.50			37.21
Capacity utilization rate (%) (1)		89.5	%		88.5	%		87.8	%

(1) Calculated by dividing actual crude steel and stainless steel output by the actual crude steel and stainless steel production capacity for the relevant period as determined by us.

Production Facilities Abroad

Our various subsidiaries and joint ventures around the world, including Zhangjiagang Pohang Stainless Steel Co., Ltd. in China, PT. Krakatau POSCO in Indonesia and POSCO SS Vina Co., Ltd. in

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Vietnam, engage in steel production activities. For a discussion of such operations, see “Item 4. Information on the Company — Item 4.B. Business Overview — Subsidiaries and Joint Ventures.”

Zhangjiagang Pohang Stainless Steel

The following table sets out Zhangjiagang’s capacity utilization rates for the periods indicated.

	As of or for the Year Ended December 31,
	2015			2016			2017
Crude steel and stainless steel production capacity as of end of the year (million tons per year)		1.10			1.10			1.10
Actual crude steel and stainless steel output (million tons)		1.17			1.16			1.16
Capacity utilization rate (%) (1)		106.1	%		105.2	%		105.4	%

(1) Calculated by dividing actual crude steel and stainless steel output by the actual crude steel and stainless steel production capacity for the relevant period as determined by us.

PT. Krakatau POSCO

The following table sets out PT. Krakatau POSCO’s capacity utilization rates for the periods indicated.

	As of or for the Year Ended December 31,
	2015			2016			2017
Crude steel production capacity as of end of the year (million tons per year)		3.00			3.00			3.00
Actual crude steel output (million tons)		2.72			2.91			2.92
Capacity utilization rate (%) (1)		90.7	%		97.0	%		97.4	%

(1) Calculated by dividing actual crude steel output by the actual crude steel capacity for the relevant period as determined by us.

POSCO SS VINA Co., Ltd.

The following table sets out POSCO SS VINA’s capacity utilization rates for the periods indicated.

	As of or for the Year Ended December 31,
	2016			2017
Crude steel production capacity as of end of the year (million tons per year)		1.10			1.10
Actual crude steel output (million tons)		0.64			0.91
Capacity utilization rate (%) (1)		58.0	%		82.3	%

(1) Calculated by dividing actual crude steel output by the actual crude steel production capacity for the relevant period as determined by us.

Item 4.E.  Unresolved Staff Comments

We do not have any unresolved comments from the Securities and Exchange Commission staff regarding our periodic reports under the Exchange Act of 1934.

Item 5.  Operating and Financial Review and Prospects

Item 5.A.  Operating Results

The following discussion and analysis is based on our consolidated financial statements, which have been prepared in accordance with IFRS, as issued by the IASB. Unless otherwise noted, the amounts included in Item 5.A. are presented on a consolidated basis.

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Overview

We are the largest fully integrated steel producer in Korea. We have four reportable operating segments — a steel segment, a trading segment, an engineering and construction segment and a segment that contains operations of all other entities which fall below the reporting thresholds. The steel segment includes production of steel products and sale of such products. The trading segment consists primarily of global trading activities and natural resources development activities of POSCO Daewoo. POSCO Daewoo exports and imports a wide range of steel products that are both obtained from and supplied to POSCO, as well as between other suppliers and purchasers in Korea and overseas. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas. The “others” segment includes power generation, LNG logistics, and network and system integration. See Note 40 of Notes to Consolidated Financial Statements.

One of the major factors contributing to our historical performance has been the growth of the Korean economy, and our future performance will depend at least in part on Korea’s general economic growth and prospects. For a description of recent developments that have had and may continue to have an adverse effect on our results of operations and financial condition, see “Item 3. Key Information — Item 3.D. Risk Factors — Korea is our most important market, and our current business and future growth could be materially and adversely affected if economic conditions in Korea deteriorate.” A number of other factors have had or are expected to have a material impact on our results of operations, financial condition and capital expenditures. These factors include:

• our sales volume, unit prices and product mix;

• costs and production efficiency; and

• exchange rate fluctuations.

As a result of these factors, our financial results in the past may not be indicative of future results or trends in those results.

Sales Volume, Prices and Product Mix

In recent years, our net sales have been affected by the following factors:

• the demand for our products in the Korean market and our capacity to meet that demand;

• our ability to compete for sales in the export market;

• price levels; and

• our ability to improve our product mix.

Domestic demand for our products is affected by the condition of major steel consuming industries, such as construction, shipbuilding, automotive, electrical appliances and downstream steel processors, and the Korean economy in general.

In 2016, unit sales prices in Won for each of our principal product lines of steel products produced by us and directly sold to external customers decreased. The weighted average unit price for such products decreased by 6.6% from 2015 to 2016, despite a depreciation in the average value of the Won against the Dollar in 2016 that increased our export prices in Won terms. The average exchange rate of the Won against the Dollar depreciated from Won 1,131.5 to US$1.00 in 2015 to Won 1,160.5 to US$1.00 in 2016.

The unit sales price of silicon steel products, which accounted for 3.1% of total sales volume of the principal steel products produced by us and directly sold to external customers, decreased by 17.0% in 2016. The unit sales price of wire rods, which accounted for 8.3% of total sales volume of such products, decreased by 11.9% in 2016. The unit sales price of stainless steel products, which

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accounted for 9.2% of total sales volume of such products, decreased by 9.2% in 2016. The unit sales price of hot rolled products, which accounted for 26.2% of total sales volume of such products, decreased by 7.6% in 2016. The unit sales price of plates, which accounted for 14.4% of total sales volume of such products, decreased by 5.0% in 2016. The unit sales price of cold rolled products, which accounted for 38.7% of total sales volume of such products, decreased by 4.6% in 2016.

In 2017, unit sales prices in Won for each of our principal product lines of steel products produced by us and directly sold to external customers increased. The weighted average unit price for such products increased by 21.3% from 2016 to 2017, despite an appreciation in the average value of the Won against the Dollar in 2017 that decreased our export prices in Won terms. The average exchange rate of the Won against the Dollar appreciated from Won 1,160.5 to US$1.00 in 2016 to Won 1,130.8 to US$1.00 in 2017.

The unit sales price of hot rolled products, which accounted for 25.9% of total sales volume of the principal steel products produced by us and directly sold to external customers, increased by 29.2% in 2017. The unit sales price of wire rods, which accounted for 7.8% of total sales volume of such products, increased by 26.2% in 2017. The unit sales price of cold rolled products, which accounted for 37.5% of total sales volume of such products, increased by 25.7% in 2017. The unit sales price of stainless steel products, which accounted for 9.6% of total sales volume of such products, increased by 15.0% in 2017. The unit sales price of silicon steel products, which accounted for 2.9% of total sales volume of such products, increased by 9.7% in 2017. The unit sales price of plates, which accounted for 16.3% of total sales volume of such products, increased by 8.4% in 2017.

The table below sets out the average unit sales prices for our semi-finished and finished steel products for the periods indicated.

	For the Year Ended December 31,
Products	2015		2016		2017
	(In thousands of Won per ton)
Cold rolled products	￦	698	￦	666	￦	837
Hot rolled products		549		507		655
Stainless steel products		2,207		2,003		2,304
Plates		612		582		631
Wire rods		724		638		806
Silicon steel sheets		1,284		1,065		1,169
Average (1)	￦	798	￦	745	￦	904

(1) “Average” prices are based on the weighted average, by sales volume, of our sales for the listed principal products produced by us and directly sold to external customers. See “Item 4. Information on the Company — Item 4.B. Business Overview — Major Products.” The average unit sales price calculation does not include sales results of steel products categorized as “others.”

Costs and Production Efficiency

Our major costs and operating expenses are raw material purchases, depreciation, labor and other purchases. The table below sets out our cost of sales and selling and administrative expenses as a percentage of our revenue as well as gross profit margin and operating profit margin for the periods indicated.

	For the Year Ended December 31,
	2015			2016			2017
	(Percentage of net sales)
Cost of sales		88.9	%		87.4	%		86.3	%
Selling and administrative expenses		7.0			7.3			6.2
Gross margin		11.1			12.6			13.7
Operating profit margin		2.5			4.3			7.0

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Our operating profit margin increased from 2.5% in 2015 to 4.3% in 2016 and increased further to 7.0% in 2017, as discussed below.

We are closely monitoring changes in market conditions and we implemented the following measures in recent years to improve our profit margins:

• pursuing cost reduction through enhancing product designs, improving productivity and reducing fixed costs;

• focusing on marketing activities to increase the sales of higher margin, higher value-added products and to strengthen our domestic market position;

• pursuing synergies among member companies of the POSCO Group through corporate restructurings; and

• establishing a special sales committee to more effectively respond to changes in market trends and preparing responses to various scenarios of future sales.

Production capacity represents our maximum production capacity that can be achieved with an optimal level of operations of our facilities. The table below sets out certain information regarding our production capacity and efficiency in the production of steel products for the periods indicated.

	For the Year Ended December 31,
	2015			2016			2017
Crude steel and stainless steel production capacity (million tons per year)		47.6			47.6			47.6
POSCO		42.4			42.4			42.4
Zhangjiagang Pohang Stainless Steel Co., Ltd.		1.1			1.1			1.1
PT. Krakatau POSCO		3.0			3.0			3.0
POSCO SS VINA Co., Ltd.		1.1			1.1			1.1
Actual crude steel and stainless steel output (million tons)		42.0			42.2			42.2
POSCO		38.0			37.5			37.2
Zhangjiagang Pohang Stainless Steel Co., Ltd.		1.2			1.2			1.2
PT. Krakatau POSCO		2.7			2.9			2.9
POSCO SS VINA Co., Ltd.		0.2			0.6			0.9
Capacity utilization rate (%)		88.3	%		88.7	%		88.7	%
POSCO		89.5	%		88.5	%		87.8	%
Zhangjiagang Pohang Stainless Steel Co., Ltd.		106.1	%		105.2	%		105.4	%
PT. Krakatau POSCO		90.7	%		97.0	%		97.4	%
POSCO SS VINA Co., Ltd.		15.8	%		58.0	%		82.3	%

Exchange Rate Fluctuations

Our consolidated financial statements are prepared from our local currency denominated financial results, assets and liabilities and our subsidiaries around the world, which are then translated into Won. A substantial proportion of our consolidated financial results is accounted for in currencies other than the Won. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies. In 2017, 61.0% of our total revenue from steel products produced and sold by us was in overseas markets outside of Korea. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies. Since the currency in which sales are recorded may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Depreciation of the Won may materially affect the results of our operations because, among other things, it causes:

• an increase in the amount of Won required for us to make interest and principal payments on our foreign currency-denominated debt;

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• an increase in Won terms in the costs of raw materials and equipment that we purchase from overseas sources and a substantial portion of our freight costs, which are denominated primarily in Dollars; and

• foreign exchange translation losses on liabilities, which lower our earnings for accounting purposes.

Appreciation of the Won against major currencies, on the other hand, causes:

• our export products to be less competitive by raising our prices in Dollar terms; and

• a reduction in net sales and accounts receivables in Won from export sales, which are primarily denominated in Dollars.

We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO Daewoo’s exposure to fluctuations in exchange rates, including the Won/Dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO Daewoo’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in Dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO Daewoo and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge our foreign exchange risks. However, our results of operations have historically been affected by exchange rate fluctuations and there can be no assurance that such strategies will be sufficient to reduce or eliminate the adverse impact of such fluctuations in the future. Because of the larger positive effects of the appreciation of the Won (i.e., the reverse of the negative effects caused by the depreciation of the Won, as discussed above), depreciation of the Won generally has a negative impact on our results of operations.

Inflation

Inflation in Korea, which was 0.7% in 2015, 1.0% in 2016 and 1.9% in 2017, has not had a material impact on our results of operations in recent years.

Critical Accounting Estimates

We have prepared our consolidated financial statements in accordance with IFRS as issued by the IASB. These accounting principles require us to make certain estimates and judgments that affect the reported amounts in our consolidated financial statements. Our estimates and judgments are based on historical experience, forecasted future events and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may differ under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. We believe the critical accounting policies discussed below are the most important to the portrayal of our financial condition and results of operations. Each of them is dependent on projections of future market conditions, and they require us to make the most difficult, subjective or complex judgments.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for exposures in our receivable balances that represent our estimate of probable losses in our short-term and long-term receivable balances from the inability of our customers to make required payments. If the financial condition of our customers were to deteriorate and negatively impact their ability to make payments, additional allowances may be

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required. Determining the allowance for doubtful accounts requires significant management judgment and estimates including, among others, the credit worthiness of our customers, experience of historical collection patterns, potential events and circumstances affecting future collections and the ongoing risk assessment of our customer’s ability to pay.

Trade account receivables are analyzed on a regular basis and, upon our becoming aware of a customer’s inability to meet its financial commitments to us, the value of the receivable is reduced through a charge to the allowance for doubtful accounts. In addition, we record a charge to the allowance for doubtful accounts upon receipt of customer claims in connection with sales that management estimates are unlikely to be collected in full. As of December 31, 2017, the percentage of allowance for doubtful accounts to trade accounts and notes receivable and other receivables was 8.23%. Our allowance for doubtful accounts increased by 11.9%, or Won 117 billion, from Won 978 billion as of December 31, 2016 to Won 1,094 billion as of December 31, 2017. See Note 23 of Notes to Consolidated Financial Statements. Assumptions and judgments related to the allowance for doubtful accounts did not change in 2017.

Specifically, allowances for doubtful accounts are recorded when any of the following loss events occur: (i) there is objective evidence as to the uncollectability of the account observed through bankruptcy, default or involuntary dissolution of the customer; (ii) we lose a lawsuit against the customer or our right of claim gets extinguished; (iii) our costs to collect the account exceed the payments to be received; or (iv) a dispute with the customer over the collection of the account persists for more than three years.

The actual average annual uncollected percentage rate of accounts receivables resulting in write-offs for the three years in the period ended December 31, 2017 was 1.02%. These historical results, as well as current known conditions impacting the collectability of our accounts receivable balances, are significant factors for us when we estimate the amount of the necessary allowance for doubtful accounts. Historically, losses from uncollectible accounts receivables have been within expectations and in line with the allowances established. However, unforeseen circumstances such as adverse market conditions that deviate significantly from our estimates may require us to change the timing of, and make additional allowances to, our receivable balances. In this case, our results of operations, financial condition and net worth could be materially and adversely affected.

Valuation of Financial Instruments including Debt and Equity Securities and Derivatives

We invest in various financial instruments including debt and equity securities and derivatives. Depending on the accounting treatment specific to each type of financial instrument, an estimate of fair value is required to determine the instrument’s effect on our consolidated financial statements.

If available, quoted market prices provide the best indication of fair value. We determine the fair value of our financial instruments using quoted market prices when available, including quotes from dealers trading those securities. If quoted market prices are not available, we determine the fair value based on pricing or valuation models, quoted prices of instruments with similar characteristics, or discounted cash flows. Determining the fair value of unlisted financial instruments involves a significant degree of management resources and judgment as no quoted prices exist and such securities are generally very thinly traded. Derivatives for which quoted market prices are not available are valued using valuation models such as the discounted cash flow method. The key inputs used in the valuation of such derivatives depend upon the type of derivative and the nature of the underlying instrument and include interest rate yield curves, foreign exchange rates, the spot price of the underlying instrument, volatility and correlation. The fair values based on pricing and valuation models and discounted cash flow analysis are subject to various assumptions used that, if changed, could significantly affect the fair value of the investments.

We assess at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as

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available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the asset is impaired. As part of this impairment review, the investee’s operating results, net asset value and future performance forecasts as well as general market conditions are taken into consideration in order to assess whether there is any objective evidence such as significant financial difficulty of the issuer.

We have estimated fair values of material non-marketable securities. We estimated these fair values based on pricing or valuation models, quoted prices of instruments with similar characteristics, or discounted cash flow models. The discounted cash flow model valuation technique is based on the estimated cash flow projections of the underlying investee. Key assumptions and estimates include market conditions, revenue growth rates, operating margin rates, income tax rates, depreciation and amortization rates, the level of capital expenditures, working capital amounts and the discount rates. These estimates are based on historical results of the investee and other market data. In these cash flows projections, the two most significant estimates are the discount rates and revenue growth rates. If the discount rates used in these valuations were increased by 1%, then the estimated fair values would have decreased by 12% in total. In addition, if the revenue growth rate assumptions were decreased by 1% in the cash flow models, then the estimated fair values would have decreased by 13% in total.

We recognized impairment losses on available-for-sale financial assets of Won 143 billion in 2015, Won 248 billion in 2016 and Won 123 billion in 2017. See Note 8 of Notes to Consolidated Financial Statements.

Our estimates and assumptions used to evaluate impairment of investments are made taking into consideration our assessment of the latest information available. However, unforeseen circumstances such as adverse market conditions that deviate significantly from our estimates may require us to recognize additional losses on impairment of investments. We base our fair value estimates on assumptions we believe to be reasonable, but which are unpredictable and inherently uncertain. The use of alternative estimates and assumptions could increase or decrease the estimated fair values of our investments and potentially result in different impacts on our results of operations.

Long-lived Assets

At each reporting date, we review the carrying amounts of our tangible and intangible assets (excluding goodwill) to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset (or cash generating unit) is reviewed in order to determine the amount of the impairment, if any. The recoverable amount is the higher of the asset’s net selling price (fair value less costs to sell) and its value in use. When the book value of long-lived asset exceeds the recoverable amount of the asset due to obsolescence, physical damage or a decline in market value and such amount is material, the impairment of the asset is recognized and the asset’s carrying value is reduced to its recoverable amount and the resulting impairment loss is charged to current operations. Such recoverable amount is based on our estimates of the future use of assets and is subject to changes in market conditions. Based on an impairment test as of December 31, 2017, we recognized impairment loss on property, plant and equipment amounting to Won 117 billion in 2017, which related primarily to impairment of long-lived assets of Suncheon Eco Trans Co., Ltd.

The depreciable lives and salvage values of our long-lived assets are estimated and reviewed each year based on industry practices and prior experience to reflect economic lives of long-lived assets. Our estimates of the useful lives and recoverable amount of long-lived assets are based on historical trends adjusted to reflect our best estimate of future market and operating conditions. Also, our estimates include the expected future period in which the future cash flows are expected to be generated from continuing use of the assets that we review for impairment and cash outflows to prepare the assets for use that can be directly attributed or allocated on a reasonable and consistent basis. If applicable, estimates also include net cash flows to be received or paid for the disposal of the

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assets at the end of their useful lives. As a result of the impairment review, when the sum of the discounted future cash flows expected to be generated by the assets is less than the book value of the assets, we recognize impairment losses based on the recoverable amount of those assets. We make a number of significant assumptions and estimates in the application of the discounted cash flow model to forecast cash flows, including business prospects, market conditions, selling prices and sales volume of products, costs of production and funding sources. The estimated cash flow forecast amounts are derived from the most recent financial budgets for the next three to five years. Beyond the specifically forecasted period, we extrapolate the cash flows for the remaining years based on an estimated growth rate. This estimated growth rate does not exceed the long-term average growth rate of our industry. As of December 31, 2017, for the applicable cash generating units, we estimated a discount rate of 7.6% to 14.0% and a revenue growth rate of 1.0%. Further impairment charges may be required if triggering events occur, such as adverse market conditions, that suggest deterioration in an asset’s recoverability or fair value. Results in actual transactions could differ from those estimates used to evaluate the impairment of such long-lived assets. If our future cash flow projections are not realized, either because of an extended recessionary period or other unforeseen events, impairment charges may be required in future periods.

If the estimated discount rates used in these valuations were increased by 1%, then the estimated recoverable amount would have decreased by 5.0% to 6.1% in total. If the estimated revenue growth rate were decreased by 1%, then the estimated recoverable amount would have decreased by 0.6% to 2.5% in total. We believe that any reasonably possible negative change in the key assumptions on which the recoverable amount is based would result in impairment loss of long-lived assets.

Goodwill

Goodwill is tested for impairment annually at the level of the groups of cash generating units or whenever changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amounts of the groups of cash-generating units are determined from the higher of their fair value less cost to sell or their value-in-use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period.

Our management estimates discount rates using post-tax rates that reflect current market rates for investments of similar risk. Growth rates are based on industry growth forecasts, and changes in selling prices and direct costs are based on historical experience and expectations of future changes in the market. Cash flow forecasts are derived from the most recent financial budgets for the next five years. Beyond the specifically forecasted period, we extrapolate cash flows for the remaining years based on an estimated growth rate. This rate does not exceed the average long-term growth rate for the relevant markets. Once recognized, impairment losses recognized for goodwill are not reversed.

In validating the value in use determined for the cash generating units, the sensitivity of key assumptions used in the discounted cash-flow model such as discount rates and the terminal growth rate was evaluated. If the estimated average discount rates used in these valuations were increased by 0.25%, the estimated value-in-use for the respective cash generating units would have decreased by 3.02% to 3.45% in total. If the estimated terminal growth rates were decreased by 0.25%, the estimated value-in-use for the respective cash generating units would have decreased by 1.78% to 2.06% in total. Based on an impairment test as of December 31, 2017, we recognized impairment loss on goodwill of Won 21 billion in 2017, which related primarily to impairment of goodwill of POSCO E&C. We believe that determining the existence and impairment of goodwill is a critical accounting estimate because significant management judgment is involved in the evaluation of the value of the cash-generating groups, and any reasonably possible changes in the key assumptions on which the recoverable amount is based would cause a change in impairment loss on goodwill. See Note 15 of Notes to Consolidated Financial Statements.

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Inventories

Inventories are stated at the lower of cost or net realizable value. Costs of inventories are determined using the moving-weighted average or weighted average method. Materials-in-transit are determined using the specific identification method. Amounts of inventory are written down to net realizable value due to losses occurring in the normal course of business and the allowance is reported as a contra inventory account, while the related charge is recognized in cost of goods sold.

The net realizable value is determined based on the latest selling price available at the end of each quarter taking into account the directly attributable selling costs. The latest selling price is the base price which is the negotiated selling price based upon the recent transactions entered into with major customers. Considering that our inventory turnover is approximately two months and inventories at the balance sheet date would be sold during the following two months, we perform valuation of inventories using the base price as of the balance sheet date and adjust for significant changes in selling price occurring subsequent to the reporting date. The selling price range used for determining the net realizable value of our inventories ranged from 94.2% to 116.0% of the inventory cost amount. For inventories in which expected selling prices are less than the cost amount, the necessary adjustment to write-down the inventories to net realizable value is made. There was no recovery in 2015, 2016 and 2017. The valuation losses of inventories recognized within cost of goods sold were Won 153 billion in 2015, Won 152 billion in 2016 and Won 79 billion in 2017.

Investments in Associates and Joint Ventures

We hold a significant amount of investments in associates and joint ventures, which interests are accounted for using the equity method. As of December 31, 2017, the book value of our investments in associates and joint ventures was Won 3,558 billion. The carrying amounts of our investments in associates and joint ventures are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

We estimate the recoverable amount of an individual asset. If it is impossible to measure the individual recoverable amount of an asset, then we estimate the recoverable amount of cash-generating unit (“CGU”), which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. The value in use is estimated by applying a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU. We treat individual operating entities as CGUs, and an impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

As part of our impairment review, the operating results, net asset value and future performance forecasts of our associates and joint ventures as well as general market conditions are taken into consideration in order to assess whether there is any objective evidence of impairment, such as significant financial difficulty of the associate or joint venture. Unforeseen circumstances such as adverse market conditions that deviate significantly from our estimates may require us to recognize additional losses on impairment of our interest in our associates and joint ventures. We base our value in use estimates on assumptions we believe to be reasonable, but which are unpredictable and inherently uncertain. The use of alternative estimates and assumptions could increase or decrease the estimated fair values used to evaluate impairment of our interest in our associates and joint ventures and potentially have different impacts on our results of operations.

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Revenue Recognition for Construction Contracts

POSCO E&C, our consolidated subsidiary, engages in various construction activities, including construction of industrial plants and commercial and residential buildings, and revenue recognition are different based on types of contracts. When the outcome of a construction contract can be estimated reliably, contract revenue is recognized in profit or loss in proportion to the stage of completion of the project. Contract revenue includes the initial amount agreed in the contract plus any variation in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. The stage of completion of a contract is determined based on the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. On the other hand, when the outcome of a construction contract cannot be estimated reliably, the revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on the construction contract is recognized as an expense immediately.

Our contract revenue recognition policy requires our management to exercise judgment in estimating the outcome of our contracts and measuring the percentage of completion and actual costs incurred in respect of our projects, which affects the amount and timing of recognition of revenues and cost of sales, provisions for estimated losses, charges against current earnings, trade account receivables and advances. For example, due to factors causing variation in costs for 2017, the estimated total contract costs were changed. Details of changes in estimated total contract costs and the impact on profit before income taxes for 2017 and future periods are as follows:

	Amount
	(In millions of Won)
Changes in estimated total contract costs	￦	164,812
Changes in profit before income taxes of construction contracts:
Current period		(69,656	)
Future periods		(6,041	)

The effect on current and future profit is estimated based on circumstances that have occurred from the commencement date of the contract to the end of 2017. The estimation is evaluated for total contract costs and expected total contract revenue as of the end of the period. Such estimate may change in future periods.

Our ability to measure reliably the estimated total cost of a project has a significant effect on the amount and timing of recognizing our sales and cost of sales. The timing of recognition of sales we report may differ materially from the timing of actual contract payments received. In addition, to the extent that sales recognized by us exceed the amount of payments to be received by us, such amount is reflected as trade account receivables on our balance sheet. To the extent payments received by us exceed the sales recognized, such amount is reflected under advances from customers on our balance sheet. Thus our ability to measure reliably the estimated total costs and the percentage of completion also affects the amount of our trade account receivables and advances from customers. For a discussion of uncertainty of estimates related to contract revenues and costs, see Note 29(d) of Notes to Consolidated Financial Statements.

Deferred Income Taxes

Our deferred income tax assets and liabilities reflect the tax consequences that would follow from the manner in which we expect, at the end of the reporting period, to recover or settle the carrying mount of our assets and liabilities. We recognize deferred income tax liability for all taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except to the extent that we are able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. We recognize deferred income tax asset for deductible temporary differences to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against

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which they can be utilized. However, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income. The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

We believe that recognition of deferred tax assets and liabilities is a significant accounting policy that requires our management’s estimates and assumptions regarding, among other things, the level of future taxable income, interpretation of the tax laws and tax planning. Changes in tax laws, projected levels of taxable income and tax planning could affect the effective tax rate and tax balances recorded by us in the future.

Employee Benefits

Our accounting of employee benefits for defined benefit plans involves judgments about uncertain events including, but not limited to, discount rates, life expectancy, future pay inflation and expected rate of return on plan assets. The discount rates are determined by reference to the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of our benefits obligations and that are denominated in the same currency in which the benefits are expected to be paid. We determine the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments, net interest expense, and other expenses related to defined benefit plans that are recognized in profit or loss. Due to changing market and economic conditions, the underlying key assumptions may differ from actual developments and may lead to significant changes in our defined benefit plan. We immediately recognize all actuarial gains and losses arising from defined benefit plans in retained earnings. If the estimated average discount rates by actuarial assumptions used in these valuations were increased by 1%, then the estimated provision for severance benefits would have decreased by Won 124 billion, or 6.7% in total. If the estimated future pay inflation rates were decreased by 1%, then the estimated provision for severance benefits would have decreased by Won 124 billion, or 6.7% in total.

Recent Accounting Changes

For a discussion of new standards, interpretations and amendments to existing standards that have been published, see Note 3 of Notes to Consolidated Financial Statements.

IFRS No. 9 “Financial Instruments”

IFRS No. 9 “Financial Instruments” regulates requirements for measurement and recognition of certain contracts in relation to trading financial assets and liabilities or non-financial items. It replaces existing guidance in IAS No. 39 “Financial Instruments: Recognition and Measurement.” We will apply IFRS No. 9 “Financial Instruments” for the year beginning on January 1, 2018.

The standard will generally be applied retrospectively with some exemptions allowing an entity not to restate the comparative information for prior periods in relation to classification and measurement (including impairment) changes. We will apply such exemptions. We will recognize the accumulated effect resulting from initial application of IFRS No. 9 as reserves, retained earnings and non-controlling interests of the company at the date of initial application.

IFRS No. 15 “Revenue from Contracts with Customers”

IFRS No. 15 “Revenue from Contracts with Customers” provides a unified five-step model for determining the timing, measurement and recognition of revenue. It replaces existing revenue

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recognition guidance, including IAS No. 18 “Revenue,” IAS No. 11 “Construction Contracts,” SIC No. 31 “Revenue-Barter transactions involving advertising services,” IFRIC No. 13 “Customer Loyalty Programs,” IFRIC No. 15 “Agreements for the construction of real estate,” and IFRIC No. 18 “Transfers of assets from customers.” We will apply IFRS No. 15 “Revenue from Contracts with Customers” for the year beginning on January 1, 2018.

We intend to apply the modified retrospective approach by recognizing the cumulative impact of applying the revenue standard as of January 1, 2018, the date of initial application. We also decided to apply the practical expedients as allowed by IFRS No. 15 by applying the new standard only to those contracts that are not considered as completed contracts at the date of initial application. Accordingly, we will not restate the financial statements for comparative periods.

Existing IFRS standards and interpretations including IAS No. 18 provide revenue recognition guidance by transaction types such as sales of goods, rendering of services, interest income, royalty income, dividend income and construction revenue. However, under the new standard of IFRS No. 15, the five-step approach (step 1: identify the contract(s) with a customer; step 2: identify the performance obligations in the contract; step 3: determine the transaction price; step 4: allocate the transaction price to the performance obligations under the contract; step 5: recognize revenue when the entity satisfies a performance obligation) is applied for all types of contracts or agreements.

IFRS No. 16 “Leases”

IFRS No. 16 “Leases” will replace IAS No. 17 “Leases” and IFRIC No. 4 “Determining whether an Arrangement contains a Lease.” It is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for companies that have adopted IFRS No. 15.

As a lessee, we plan to adopt IFRS No. 16 using one of the two following methods: (a) retrospectively to each prior reporting period presented in accordance with IAS No. 8 “Accounting Policies, Changes in Accounting Estimates and Errors” but using the practical expedients for completed contracts (i.e. completed contracts as of the beginning of the earliest prior period presented are not restated); or (b) retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application.

We have not yet initiated the preparation for the application of IFRS No. 16 and have not performed an assessment of the impact resulting from the application of IFRS No. 16. We will complete the analysis of financial impacts arising from applying this standard in 2018.

Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS

In addition to preparing financial statements in accordance with IFRS as issued by the IASB included in this annual report, we also prepare financial statements in accordance with K-IFRS as adopted by the KASB, which we are required to file with the Financial Services Commission and the Korea Exchange under the FSCMA.

K-IFRS differs in certain respects from IFRS as issued by the IASB in the presentation of operating profit. Additionally, under K-IFRS, revenue from the development and sale of real estate is recognized using the percentage of completion method. However, under IFRS as issued by the IASB, revenue from the development and sale of certain real estate is recognized when an individual unit of residential real estate is delivered to the buyer. As a result, our consolidated statements of comprehensive income and our consolidated statements of financial position prepared in accordance with IFRS as issued by the IASB included in this annual report differ from our consolidated statements of comprehensive income and consolidated statements of financial position prepared in accordance with K-IFRS. The table below sets forth a reconciliation of our operating profit and net income or loss as presented in our consolidated statements of comprehensive income prepared in accordance with IFRS as issued by the IASB for each of the years ended December 31, 2015, 2016 and 2017 to our

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operating profit and net income or loss in our consolidated statements of comprehensive income prepared in accordance with K-IFRS, for each of the corresponding years, taking into account such differences:

	For the Year Ended December 31,
	2015			2016			2017
	(In millions of Won)
Operating profit under IFRS as issued by the IASB	￦	1,486,380		￦	2,282,496		￦	4,196,121
Additions:
Impairment losses on assets held for sale		133,547			24,890			—
Loss on disposal of assets held for sale		190,357			254			608
Loss on disposal of investments in subsidiaries, associates and joint ventures		18,996			22,499			19,985
Loss on disposal of property, plant and equipment		101,732			86,622			151,343
Impairment losses on property, plant and equipment		136,269			196,882			117,231
Impairment losses on goodwill and intangible assets		161,412			127,875			167,995
Other bad debt expenses		158,071			50,225			100,920
Loss on valuation of firm commitment		—			—			43,164
Idle tangible assets expenses		12,773			6,437			10,490
Increase to provisions		18,396			53,058			33,964
Donations		62,957			43,810			51,424
Others		447,788			143,168			95,172
		1,442,298			755,720			792,296
Deductions:
Gain on disposal of assets held for sale		(227,956	)		(23,112	)		(1,180	)
Gain on disposal of investments in subsidiaries, associates and joint ventures		(88,718	)		(23,305	)		(81,794	)
Gain on disposal of property, plant and equipment		(22,730	)		(23,826	)		(32,145	)
Gain on disposal of intangible assets		(1,432	)		(671	)		(23,391	)
Recovery of allowance for other doubtful accounts		(10,452	)		(12,658	)		(2,743	)
Gain on valuation of firm commitment		—			—			(56,301	)
Rental revenues		(1,019	)		(1,771	)		(1,498	)
Gain on insurance proceeds		(14,976	)		(22,400	)		(5,878	)
Others		(181,765	)		(107,393	)		(246,294	)
		(549,048	)		(215,136	)		(451,224	)
Revenue recognition related to development and sale of real estate		(329,923	)		143,742			468,233
Cost of sales recognition related to development and sale of real estate		360,336			(122,497	)		(383,592	)
Operating profit under K-IFRS	￦	2,410,043		￦	2,844,325		￦	4,621,834
Net income (loss) under IFRS as issued by the IASB	￦	(116,215	)	￦	1,032,065		￦	2,909,311
Adjustments related to development and sale of real estate:
Revenue		(329,923	)		143,742			468,233
Cost of sales		360,336			(122,497	)		(383,592	)
Income tax		(10,379	)		(5,141	)		(20,483	)
Net income (loss) under K-IFRS	￦	(96,181	)	￦	1,048,169		￦	2,973,469

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Operating Results — 2016 Compared to 2017

The following table presents our income statement information and changes therein for 2016 and 2017.

						Changes
	For the Year Ended December 31,					2016 versus 2017
	2016			2017		Amount			%
	(In billions of Won)
Revenue	￦	52,940		￦	60,187		￦    7,247			13.7	%
Cost of sales		46,271			51,916		5,645			12.2
Gross profit		6,668			8,271		1,603			24.0
Administrative expenses		2,292			2,177		(115	)		(5.0	)
Selling expenses		1,554			1,557		3			0.2
Other operating income		215			451		236			109.7
Other operating expenses		756			792		36			4.8
Operating profit		2,282			4,196		1,914			83.8
Share of gain (loss) of equity-accounted investees		(89	)		11		100			N.A.	(1)
Finance income		2,232			2,373		141			6.3
Finance costs		3,014			2,484		(530	)		(17.6	)
Profit before income tax		1,412			4,096		2,683			190.1
Income tax expense		380			1,186		806			212.4
Profit (loss)		1,032			2,909		1,877			181.9
Profit for the period attributable to owners of the controlling company		1,355			2,756		1,401			103.4
Loss for the period attributable to non-controlling interests		(323	)		153		476			N.A.	(1)

(1) N.A. means not applicable.

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Revenue

The following table presents our revenue by segment and changes therein for 2016 and 2017.

							Changes
	For the Year Ended December 31,						2016 versus 2017
	2016			2017			Amount			%
	(In billions of Won)
Steel Segment:
External revenue	￦	26,844		￦	30,230		￦	3,386			12.6	%
Internal revenue		16,062			17,381			1,319			8.2
Total revenue from Steel Segment		42,906			47,611			4,705			11.0
Trading Segment:
External revenue		16,774			20,802			4,028			24.0
Internal revenue		9,646			14,076			4,430			45.9
Total revenue from Trading Segment		26,420			34,878			8,458			32.0
Construction Segment:
External revenue		6,768			6,887			119			1.7
Internal revenue		714			399			(315	)		(44.1	)
Total revenue from Construction Segment		7,482			7,286			(196	)		(2.6	)
Others Segment:
External revenue		2,697			2,736			39			1.4
Internal revenue		2,380			2,549			169			7.1
Total revenue from Others Segment		5,077			5,285			208			4.1
Total revenue prior to consolidation adjustments and basis difference		81,885			95,060			13,175			16.1
Consolidation adjustments		(28,802	)		(34,405	)		(5,603	)		19.5
Basis difference (1)		(144	)		(468	)		(324	)		225.7
Revenue	￦	52,940		￦	60,187			7,247			13.7	%

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

Our revenue increased by 13.7%, or Won 7,247 billion, from Won 52,940 billion in 2016 to Won 60,187 billion in 2017 due to increases in external revenues from each of our four segments. Specifically:

Steel Segment. External revenue from the Steel Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, increased by 12.6%, or Won 3,386 billion, from Won 26,844 billion in 2016 to Won 30,230 billion in 2017 due to an increase in the average unit sales price per ton of the principal steel products produced by us and directly sold to external customers, which was offset in part by a decrease in our sales volume of the steel products produced by us and directly sold to external customers (including miscellaneous steel products not included in any of our major product categories). The weighted average unit sales price per ton of the principal steel products produced by us and directly sold to external customers increased by 21.3% from Won 745,476 per ton in 2016 to Won 903,897 per ton in 2017, while the overall sales volume of the principal steel products produced by us and directly sold to external customers decreased by 8.6% from 32.9 million tons in 2016 to 30.0 million tons in 2017. Such factors were principally attributable to the following:

• The unit sales prices in Won of each of our major product categories increased from 2016 to 2017. Hot rolled products, wire rods, cold rolled products, stainless steel products, silicon steel sheets and plates produced by us and directly sold to external customers increased by 29.2%, 26.2%, 25.7%, 15.0%, 9.7% and 8.4%, respectively, from 2016 to 2017. For a

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discussion of changes in the unit sales prices of each of our principal product lines, see “— Overview — Sales Volume, Prices and Product Mix” above.

• The sales volume of each of our major product categories, other than plates, decreased from 2016 to 2017, primarily due to the recognition of the sales volume of POSCO P&S, our former sales subsidiary that primarily engaged in sales of steel products produced by us, under the Trading Segment commencing March 2017 following its merger into POSCO Daewoo and, to a lesser extent, a reduction in our production due to facility revamping and rationalization of certain production facilities of Pohang Works and Gwangyang Works. The sales volume of silicon steel sheets, wire rods, cold rolled products, hot rolled products and stainless steel products produced by us and directly sold to external customers decreased by 15.1%, 14.7%, 11.3%, 9.8% and 5.1%, respectively, from 2016 to 2017. On the other hand, the sales volume of plates increased by 3.1% from 2016 to 2017. For a discussion of changes in sales volume of each of our principal product lines, see “Item 4.B. Business Overview — Major Products.”

Total revenue from the Steel Segment, which includes internal revenue from inter-company transactions, increased by 11.0%, or Won 4,705 billion, from Won 42,906 billion in 2016 to Won 47,611 billion in 2017 as internal revenue from inter-company transactions increased by 8.2%, or Won 1,319 billion, from Won 16,062 billion in 2016 to Won 17,381 billion in 2017. Such increase primarily reflected, in addition to factors discussed above, an increase in the average unit sales price of the steel products sold to POSCO Daewoo.

Trading Segment. External revenue from the Trading Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, increased by 24.0%, or Won 4,028 billion, from Won 16,774 billion in 2016 to Won 20,802 billion in 2017 primarily due to the recognition of the sales of POSCO P&S under the Trading Segment commencing from March 2017 following its merger into POSCO Daewoo, as well as an increase in third-country trades by POSCO Daewoo and our other trading subsidiaries from 2016 to 2017, reflecting an increase in sales of slabs produced by CSP (Compania Siderurgica do Pecem) and PT. Krakatau POSCO as well as an increase in trading of petrochemical products.

Total revenue from the Trading Segment, which includes internal revenue from inter-company transactions, increased by 32.0%, or Won 8,458 billion, from Won 26,420 billion in 2016 to Won 34,878 billion in 2017 as internal revenue from inter-company transactions increased by 45.9%, or Won 4,430 billion, from Won 9,646 billion in 2016 to Won 14,076 billion in 2017 primarily due to an increase in our steel sales activities through trading subsidiaries.

Construction Segment. External revenue from the Construction Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, increased by 1.7%, or Won 119 billion, from Won 6,768 billion in 2016 to Won 6,887 billion in 2017 primarily due to a general increase in POSCO E&C’s construction activities reflecting favorable market conditions in the domestic construction industry as well as an increase in demand for EPC projects in Korea and abroad.

Total revenue from the Construction Segment, which includes internal revenue from inter-company transactions, decreased by 2.6%, or Won 196 billion, from Won 7,482 billion in 2016 to Won 7,286 billion in 2017 as internal revenue from inter-company transactions decreased by 44.1%, or Won 315 billion, from Won 714 billion in 2016 to Won 399 billion in 2017. Such decrease in internal revenue reflected a decrease in the amount of construction activities for member companies of the POSCO Group in 2017 compared to 2016.

Others Segment. The Others Segment primarily includes power generation, coal chemistry and carbon materials production and information technology service. External revenue from the Others Segment, which does not include internal revenue from inter-company transactions that are eliminated

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during consolidation, increased by 1.4%, or Won 39 billion, from Won 2,697 billion in 2016 to Won 2,736 billion in 2017 primarily due to an increase in the unit price and sales volume of coal chemistry products of POSCO Chemtech Co., Ltd.

Total revenue from the Others Segment, which includes internal revenue from inter-company transactions, increased by 4.1%, or Won 208 billion, from Won 5,077 billion in 2016 to Won 5,285 billion in 2017 as internal revenue from inter-company transactions increased by 7.1% or Won 169 billion, from Won 2,380 billion in 2016 to Won 2,549 billion in 2017. Such increase primarily reflected an increase in inter-company sales related to replacement of control systems at Pohang Works by POSCO ICT Co., Ltd.

Cost of Sales

Our cost of sales increased by 12.2%, or Won 5,644 billion, from Won 46,271 billion in 2016 to Won 51,916 billion in 2017. The increase in cost of sales was primarily due to increases in the average price in Won terms of key raw materials that were used to manufacture our finished goods sold, which were partially offset by a decrease in our sales volume of steel products.

The following table presents a breakdown of our cost of sales by segment, prior to adjusting for inter-company transactions that are eliminated during consolidation and basis difference, and changes therein for 2016 and 2017.

							Changes
	For the Year Ended December 31,						2016 versus 2017
	2016			2017			Amount			%
	(In billions of Won)
Steel Segment	￦	37,437		￦	41,479		￦	4,042			10.8	%
Trading Segment		25,090			33,388			8,298			33.1
Construction Segment		7,564			6,598			(966	)		(12.8	)
Others Segment		4,507			4,636			129			2.9
Consolidation adjustments		(28,204	)		(33,802	)		(5,598	)		19.8
Basis difference (1)		(123	)		(383	)		(261	)		211.4
Cost of sales	￦	46,271		￦	51,916		￦	5,644			12.2	%

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

Steel Segment. The cost of sales of our Steel Segment, prior to consolidation adjustments, increased by 10.8%, or Won 4,042 billion, from Won 37,437 billion in 2016 to Won 41,479 billion in 2017 primarily due to increases in the average price in Won terms of key raw materials that were used to manufacture our finished goods sold, the impact of which was partially offset by a decrease in our sales volume of the principal steel products produced by us and sold to external and internal customers.

Trading Segment. The cost of sales of our Trading Segment, prior to consolidation adjustments, increased by 33.1%, or Won 8,298 billion, from Won 25,090 billion in 2016 to Won 33,388 billion in 2017 primarily due to the recognition of the cost of sales of POSCO P&S under the Trading Segment commencing March 2017 following its merger into POSCO Daewoo as well as an increase in cost of export and import products sold.

Construction Segment. The cost of sales of our Construction Segment, prior to consolidation adjustments, decreased by 12.8%, or Won 966 billion, from Won 7,564 billion in 2016 to Won 6,598 billion in 2017, reflecting the recognition of additional costs related to certain EPC projects abroad in 2016 compared to no such costs in 2017.

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Others Segment. The cost of sales of our Others Segment, prior to consolidation adjustments, increased by 2.9%, or Won 129 billion, from Won 4,507 billion in 2016 to Won 4,636 billion in 2017 primarily due to increases in the average price in Won terms of key raw materials used by POSCO Chemtech Co., Ltd. to produce coal chemistry products.

Gross Profit

Our gross profit increased by 24.0%, or Won 1,603 billion, from Won 6,668 billion in 2016 to Won 8,271 billion in 2017 primarily due to increases in gross profit of each of our four segments. Our gross margin increased from 12.6% in 2016 to 13.7% in 2017.

The following table presents our gross profit by segment, prior to adjusting for inter-company transactions that are eliminated during consolidation and basis difference, and changes therein for 2016 and 2017.

							Changes
	For the Year Ended December 31,						2016 versus 2017
	2016			2017			Amount			%
	(In billions of Won)
Steel Segment	￦	5,469		￦	6,132		￦	663			12.1	%
Trading Segment		1,330			1,490			160			12.0
Construction Segment		(82	)		688			770			N.A.	(2)
Others Segment		570			649			79			13.9
Consolidation adjustments		(598	)		(603	)		(5	)		0.9
Basis difference (1)		(21	)		(85	)		(64	)		298.4
Gross profit	￦	6,668		￦	8,271		￦	1,603			24.0	%

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

(2) N.A. means not applicable.

Steel Segment. The gross profit of our Steel Segment, prior to consolidation adjustments, increased by 12.1%, or Won 663 billion, from Won 5,469 billion in 2016 to Won 6,132 billion in 2017 primarily due to an increase in the average unit sales price per ton of the principal steel products produced by us and sold to external and internal customers, which were partially offset by an increase in the average price in Won terms of coal and other key raw materials that were used to manufacture our finished steel products sold as well as a decrease in the overall sales volume of our principal steel products, as discussed above. The gross margin of our Steel Segment, which is gross profit as a percentage of total revenue prior to consolidation adjustments, increased from 12.7% in 2016 to 12.9% in 2017, as we focused our production and marketing efforts on selling higher margin, higher value added premium products in 2017.

Trading Segment. The gross profit of our Trading Segment, prior to consolidation adjustments, increased by 12.0%, or Won 160 billion, from Won 1,330 billion in 2016 to Won 1,490 billion in 2017, primarily due to the recognition of the cost of sales of POSCO P&S under the Trading Segment commencing March 2017 following its merger into POSCO Daewoo as well as an increase in gross profit of the Myanmar gas fields, which were partially offset by a decrease in trading margins resulting from weaker demand and falling prices for export and import products. The gross margin of our Trading Segment, prior to consolidation adjustments, decreased from 5.0% in 2016 to 4.3% in 2017.

Construction Segment. Our Construction Segment recorded gross loss of Won 82 billion in 2016 compared to gross profit of Won 688 billion in 2017, and the gross margin, prior to consolidation adjustments, improved from (1.1)% in 2016 to 9.4% in 2017, primarily due to our engagement in higher-margin construction activities in 2017 reflecting more favorable market conditions in the

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domestic residential construction industry as well as an increase in demand for EPC projects in Korea and abroad. In comparison, we recognized losses incurred in connection with overseas construction projects in 2016, in particular a loss of Won 157 billion related to delay in construction of the CSP-Companhia Siderurgia do Pecem steel plant complex in Brazil, as well as a decrease in the amount of relatively high-margin construction projects for member companies of the POSCO Group.

Others Segment. The gross profit of our Others Segment, prior to consolidation adjustments, increased by 13.9%, or Won 79 billion, from Won 570 billion in 2016 to Won 649 billion in 2017 primarily due to an increase in gross profits of POSCO Chemtech Co., Ltd. and POSCO Energy Corporation. The gross margin of our Others Segment increased from 11.2% in 2016 to 12.3% in 2017.

Selling and Administrative Expenses

The following table presents a breakdown of our selling and administrative expenses and changes therein for 2016 and 2017.

					Changes
	For the Year Ended December 31,				2016 versus 2017
	2016		2017		Amount			%
	(In billions of Won)
Freight and custody expenses	￦	1,342	￦	1,337	￦	(5	)		(0.4	)%
Sales commissions		94		116		22			22.8
Sales promotion		11		12		1			16.3
Sales insurance premium		31		37		6			16.5
Contract cost		49		23		(26	)		(53.4	)
Others		26		32		6			25.6
Total selling expenses	￦	1,554	￦	1,557		3			0.2
Wages and salaries	￦	770	￦	775	￦	5			0.7	%
Expenses related to post-employment benefits		201		79		(122	)		(60.9	)
Other employee benefits		177		160		(17	)		(9.5	)
Depreciation		103		97		(6	)		(6.0	)
Amortization		140		146		6			4.8
Taxes and public dues		79		73		(6	)		(7.7	)
Rental		82		70		(12	)		(14.7	)
Advertising		86		120		34			39.0
Research and development		121		126		5			4.3
Service fees		201		193		(8	)		(3.8	)
Bad debt expenses		165		174		9			5.2
Others		167		164		(3	)		(1.7	)
Total administrative expenses	￦	2,292	￦	2,177		(115	)		(5.0	)
Total selling and administrative expenses	￦	3,845	￦	3,734		(111	)		(2.9	)

Our selling and administrative expenses decreased by 2.9%, or Won 111 billion, from Won 3,845 billion in 2016 to Won 3,734 billion in 2017 primarily due to decreases in expenses related to post-employment benefits, contract cost, other employment benefits and rental expenses, which were partially offset by increases in advertising expenses and sales commissions. Such factors were principally attributable to the following:

• Our expenses related to post-employment benefits decreased by 60.9%, or Won 122 billion, from Won 201 billion in 2016 to Won 79 billion in 2017 primarily due to expenses related to the early retirement programs of POSCO E&C and POSCO Engineering Co., Ltd. in 2016 compared to no such programs in 2017.

• Our contract cost decreased by 53.4%, or Won 26 billion, from Won 49 billion in 2016 to Won 23 billion in 2017 primarily due to a decrease in cost related to unsuccessful project bids.

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• Our other employment benefits decreased by 9.5%, or Won 17 billion, from Won 177 billion in 2016 to Won 160 billion in 2017 primarily due to a decrease in employee incentive bonuses in 2017.

• Our rental expenses decreased by 14.7%, or Won 12 billion, from Won 82 billion in 2016 to Won 70 billion in 2017 primarily due to decreases in costs related to vehicle leases and leases related to information technology infrastructure.

• Our advertising expenses increased by 39.0%, or Won 34 billion, from Won 86 billion in 2016 to Won 120 billion in 2017 primarily due to an increase in our general advertising activities related to our sponsorship of the 2018 PyeongChang Olympic Games.

• Our sales commissions increased by 22.8%, or Won 22 billion, from Won 94 billion in 2016 to Won 116 billion in 2017 primarily reflecting a general increase in commissions related to increased sales revenue.

Other Operating Income and Expenses

The following table presents a breakdown of our other operating income and changes therein for 2016 and 2017.

					Changes
	For the Year Ended December 31,				2016 versus 2017
	2016		2017		Amount			%
	(In billions of Won)
Gain on disposal of assets held for sale	￦	23	￦	1	￦	(22	)		(94.9	)%
Gain on disposal of investments in subsidiaries, associates and joint ventures		23		82		59			251.0
Gain on disposal of property, plant and equipment		24		32		8			34.9
Gain on disposal of intangible assets		1		23		22			3,386.0
Recovery of allowance for other doubtful accounts		13		3		(10	)		(78.3	)
Gain on valuation of firm commitment		—		56		56			N.A.	(1)
Gain on insurance proceeds		22		6		(16	)		(73.8	)
Others		109		248		138			127.0
Total other operating income	￦	215	￦	451		236			109.7

(1) N.A. means not applicable.

Our other operating income increased by 109.7%, or Won 236 billion, from Won 215 billion in 2016 to Won 451 billion in 2017 primarily due to our recognition of a tax refund of Won 133 billion in 2017 as well as increases in gain on disposal of investments in subsidiaries, associates and joint ventures and gain on valuation of firm commitment, which were partially offset by a decrease in gain on disposal of assets held for sale. Such factors were principally attributable to the following:

• In 2017, we recognized a tax refund of Won 133 billion, which we categorized in “others,” related to a successful appeal of a tax audit, compared to no such refund in 2016.

• Our gain on disposal of investments in subsidiaries, associates and joint ventures increased by 251.0%, or Won 59 billion, from Won 23 billion in 2016 to Won 82 billion in 2017 primarily due to an increase in disposition of our interests in some of our subsidiaries and associates as part of our reorganization efforts.

• We recognized gain on valuation of firm commitment of Won 56 billion in 2017 compared to no such gain in 2016, reflecting our decision to adopt hedge accounting starting in 2017, pursuant to which gain on valuation of firm commitment contracts is recognized.

• Our gain on disposal of assets held for sale decreased by 94.9%, or Won 22 billion, from Won 23 billion in 2016 to Won 1 billion in 2017. We recognized a gain of Won 23 billion on

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disposal of assets held for sale in 2016 primarily from the disposal of our 80.0% interest in POSCO LED Co., Ltd., compared to no gain of such magnitude from our disposal of assets held for sale in 2017.

The following table presents a breakdown of our other operating expenses and changes therein for 2016 and 2017.

					Changes
	For the Year Ended December 31,				2016 versus 2017
	2016		2017		Amount			%
	(In billions of Won)
Impairment losses on assets held for sale	￦	25	￦	—		(25	)		(100.0	)%
Loss on disposal of investments in subsidiaries, associates and joint ventures		22		20		2			(11.2	)
Loss on disposal of property, plant and equipment		87		151		64			74.7
Impairment losses on property, plant and equipment		197		117		(80	)		(40.5	)
Impairment losses on goodwill and intangible assets		128		168		40			31.4
Other bad debt expenses		50		101		51			100.9
Loss on valuation of firm commitment		—		43		43			N.A.	(1)
Idle tangible assets expenses		6		10		4			63.0
Increase to provisions		53		34		(19	)		(36.0	)
Donations		44		51		7			17.4
Others		144		97		(48	)		(33.2	)
Total other operating expenses	￦	756	￦	792		36			4.8

(1) N.A. means not applicable.

Our other operating expenses increased by 4.8%, or Won 36 billion, from Won 756 billion in 2016 to Won 792 billion in 2017, primarily due to increases in our loss on disposal of property, plant and equipment, other bad debt expenses, loss on valuation of firm commitment and impairment losses on goodwill and intangible assets, which were partially offset by a decrease in impairment losses on property, plant and equipment and impairment losses on assets held for sale. Such factors were principally attributable to the following:

• Our loss on disposal of property, plant and equipment increased by 74.7%, or Won 64 billion, from Won 87 billion in 2016 to Won 151 billion in 2017 primarily due to our blast furnace upgrading project at Pohang Works.

• Our other bad debt expenses increased by 100.9%, or Won 51 billion, from Won 50 billion in 2016 to Won 101 billion in 2017. In 2016, our other bad debt expenses related primarily to financing of the Dongtan Metapolis project of POSCO E&C. In 2017, our bad debt expenses related primarily to joint venture projects of POSCO E&C.

• We recognized loss on valuation of firm commitment of Won 43 billion in 2017 compared to no such loss in 2016, reflecting our decision to adopt hedge accounting starting in 2017, pursuant to which loss on valuation of firm commitment contracts is recognized.

• Our impairment losses on goodwill and intangible assets increased by 31.4%, or Won 40 billion, from Won 128 billion in 2016 to Won 168 billion in 2017. In 2016, our impairment losses on goodwill and intangible assets related primarily to impairment losses on goodwill of Won 83 billion relating to POSCO Engineering Co., Ltd. In addition, we recognized full impairment losses of Won 12 billion relating to SANTOS CMI S.A. In 2017, our impairment losses on goodwill and intangible assets related primarily to losses of POSCO Engineering, which merged into POSCO E&C.

• Our impairment losses on property, plant and equipment decreased by 40.5%, or Won 80 billion, from Won 197 billion in 2016 to Won 117 billion in 2017. In 2016, we recognized impairment losses on property, plant and equipment of Won 62 billion related to

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continuing operating loss of the fuel cell business of POSCO Energy. In addition, we recorded Won 58 billion of impairment losses in 2016 related to disposal plans of certain assets. In 2017, our impairment losses on property, plant and equipment related primarily to SkyCube operated by Suncheon Eco Trans Co., Ltd. as well as disposal plans regarding certain assets.

• We recognized impairment losses on assets held for sale of Won 25 billion in 2016 related primarily to a decrease in value of a building in Songdo, compared to no impairment losses on assets held for sale in 2017.

Operating Profit

Due to the factors described above, our operating profit increased by 83.8%, or Won 1,914 billion, from Won 2,282 billion in 2016 to Won 4,196 billion in 2017. Our operating margin increased from 4.3% in 2016 to 7.0% in 2017.

Share of Profit (Loss) of Equity-Accounted Investees

We recorded a net loss for our proportionate share of equity-accounted investees of Won 89 billion in 2016 compared to a net gain for our proportionate share of equity-accounted investees of Won 11 billion in 2017. In 2016, we recognized a net loss for our proportionate share of equity-accounted investees of Won 89 billion primarily due to our share of losses of POSCO Plantec Co., Ltd. (Won 172 billion) and DMSA/AMSA (Won 60 billion), which were partially offset by our share of profits of CSP-Compania Siderurgica do Pecem (Won 117 billion) and South-East Asia Gas Pipeline Company Ltd. (Won 47 billion). In 2017, we recognized a net gain for our proportionate share of equity-accounted investees of Won 11 billion primarily due to our share of gains of KOBRASCO (Won 56 billion), Roy Hill Holdings Pty Ltd. (Won 46 billion), South-East Asia Gas Pipeline Company Ltd. (Won 43 billion) and POSCO Mitsubishi Carbon Technology Ltd. (Won 28 billion), which were partially offset by our share of loss of CSP-Compania Siderurgica do Pecem (Won 148 billion). See Note 11 of Notes to Consolidated Financial Statements.

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Finance Income and Finance Costs

The following table presents a breakdown of our finance income and costs and changes therein for 2016 and 2017.

					Changes
	For the Year Ended December 31,				2016 versus 2017
	2016		2017		Amount			%
	(In billions of Won)
Interest income	￦	182	￦	212	￦	30			16.4	%
Dividend income		41		93		52			126.7
Gain on foreign currency transactions		1,033		786		(247	)		(23.9	)
Gain on foreign currency translations		378		564		186			49.3
Gain on derivatives transactions		317		211		(106	)		(33.4	)
Gain on valuation of derivatives		147		65		(82	)		(56.0	)
Gain on disposals of available-for-sale financial assets		131		426		295			225.4
Others		4		16		13			337.6
Total finance income	￦	2,232	￦	2,373		141			6.3
Interest expenses	￦	659	￦	653		(6	)		(0.9	)%
Loss on foreign currency transactions		1,147		757		(391	)		(34.0	)
Loss on foreign currency translations		405		423		17			4.3
Loss on derivatives transactions		338		236		(102	)		(30.2	)
Loss on valuation of derivatives		163		226		64			39.2
Impairment losses on available-for-sale financial assets		248		123		(125	)		(50.4	)
Others		53		66		12			22.7
Total finance costs	￦	3,014	￦	2,484		(530	)		(17.6	)

We recognized a net loss on foreign currency translations of Won 28 billion in 2016 compared to a net gain on foreign currency translations of Won 141 billion in 2017, and we recorded a net loss on foreign currency transactions of Won 115 billion in 2016 compared to a net gain on foreign currency transactions of Won 29 billion in 2017, as the Won depreciated against the Dollar in 2016 but appreciated in 2017. In terms of the market average exchange rates announced by Seoul Money Brokerage Services, Ltd., the Won depreciated from Won 1,172.0 to US$1.00 as of December 31, 2015 to Won 1,208.5 to US$1.00 as of December 31, 2016 but appreciated to Won 1,071.4 to US$1.00 as of December 31, 2017. Against such fluctuations, our net loss on valuation of derivatives increased by 939.2%, or Won 146 billion, from Won 16 billion in 2016 to Won 162 billion in 2017, and our net loss on transactions of derivatives increased by 17.2%, or Won 4 billion, from Won 22 billion in 2016 to Won 26 billion in 2017.

Our gain on disposal of available-for-sale financial assets increased by 225.4%, or Won 295 billion, from Won 131 billion in 2016 to Won 426 billion in 2017. In 2016, our gain on disposals of available-for-sale financial assets related primarily to disposals of our interests in Hana Financial Group Inc. and Shinhan Financial Group Co., Ltd. In 2017, our gain on disposal of available-for-sale financial assets related primarily to disposals of our interests in Hyundai Heavy Industries Co., Ltd. and KB Financial Group Inc.

Our impairment losses on available-for-sale financial assets decreased by 50.4%, or Won 125 billion, from Won 248 billion in 2016 to Won 123 billion in 2017. In 2016, our impairment loss related primarily to a significant and prolonged decline in the fair value of shares of Nippon Steel & Sumitomo Metal Corporation below cost. In 2017, our impairment loss related primarily to a significant and prolonged decline in the fair value of shares of Congonhas Minèrios S.A. below cost.

Our dividend income increased by 126.7%, or Won 52 billion, from Won 41 billion in 2016 to Won 93 billion in 2017 primarily due to increases in dividends from Nippon Steel & Sumitomo Metal Corporation and KB Financial Group Inc.

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Our interest income increased by 16.4%, or Won 30 billion, from Won 182 billion in 2016 to Won 212 billion in 2017 primarily due to a general increase in interest rates in Korea in 2017.

Profit before Income Taxes

Due to the factors described above, our profit before income taxes increased by 190.1%, or Won 2,683 billion, from Won 1,412 billion in 2016 to Won 4,095 billion in 2017.

The following table presents our profit and loss by segment, prior to adjusting for goodwill and corporate fair-value adjustments, elimination of inter-segment profits, income tax expense and basis difference, and changes therein for 2016 and 2017.

							Changes
	For the Year Ended December 31,						2016 versus 2017
	2016			2017			Amount			%
	(In billions of Won)
Steel Segment	￦	1,511		￦	2,791		￦	1,279			84.7	%
Trading Segment		53			113			59			111.6
Construction Segment		(1,404	)		25			1,428			N.A.	(1)
Others Segment		(26	)		233			259			N.A.	(1)
Goodwill and corporate fair value adjustments		(123	)		(84	)		39			N.A.	(1)
Elimination of inter-segment profits		1,036			(103	)		(1,139	)		N.A.	(1)
Income tax expense		385			1,206			822			213.6
Basis difference (2)		(21	)		(85	)		(63	)		298.4
Profit before income taxes	￦	1,412		￦	4,095			2,683			190.1

(1) N.A. means not applicable.

(2) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

Income Tax Expense

Our income tax expense increased by 212.4%, or Won 806 billion, from Won 380 billion in 2016 to Won 1,186 billion in 2017. Our effective tax rate increased from 26.9% in 2016 to 29.0% in 2017 primarily due to the effect of tax rate change of Won 176 billion in 2017 (that resulted in an increase in effective tax rate of 4.3%). In 2017, the Government announced a revision of tax law which includes new highest corporate income tax rate of 25% for taxable income in excess of Won 300 billion from fiscal year 2018 compared to 22% prior to such change. Such impact was offset in part by a decrease in tax related to investments in subsidiaries, associates and joint ventures from Won 77 billion in 2016 to Won 55 billion in 2017 (that resulted in a decrease in effective tax rate of 4.1%). See Note 35 of Notes to Consolidated Financial Statements.

Profit

Due to the factors described above, our profit increased by 181.9%, or Won 1,877 billion, from Won 1,032 billion in 2016 to Won 2,909 billion in 2017.

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Operating Results – 2015 Compared to 2016

The following table presents our income statement information and changes therein for 2015 and 2016.

							Changes
	For the Year Ended December 31,						2015 versus 2016
	2015			2016			Amount			%
	(In billions of Won)
Revenue	￦	58,522		￦	52,940		￦	(5,582	)		(9.5	)%
Cost of sales		52,018			46,271			(5,747	)		(11.0	)
Gross profit		6,504			6,668			164			2.5
Administrative expenses		2,395			2,292			(104	)		(4.3	)
Selling expenses		1,729			1,554			(175	)		(10.1	)
Other operating income		549			215			(334	)		(60.8	)
Other operating expenses		1,442			756			(687	)		(47.6	)
Operating profit		1,486			2,282			796			53.6
Share of loss of equity-accounted investees		506			89			(417	)		(82.5	)
Finance income		2,557			2,232			(325	)		(12.7	)
Finance costs		3,387			3,014			(373	)		(11.0	)
Profit before income tax		150			1,412			1,261			838.9
Income tax expense		267			380			113			42.4
Profit (loss)		(116	)		1,032			1,148			N.A.	(1)
Profit for the period attributable to owners of the controlling company		171			1,355			1,183			690.0
Loss for the period attributable to non-controlling interests		(288	)		(323	)		(35	)		12.2

(1) N.A. means not applicable.

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Revenue

The following table presents our revenue by segment and changes therein for 2015 and 2016.

							Changes
	For the Year Ended December 31,						2015 versus 2016
	2015			2016			Amount			%
	(In billions of Won)
Steel Segment:
External revenue	￦	28,293		￦	26,844		￦	(1,449	)		(5.1	)%
Internal revenue		16,544			16,062			(482	)		(2.9	)
Total revenue from Steel Segment		44,837			42,906			(1,931	)		(4.3	)
Trading Segment:
External revenue		18,315			16,774			(1,541	)		(8.4	)
Internal revenue		8,692			9,646			954			11.0
Total revenue from Trading Segment		27,008			26,420			(587	)		(2.2	)
Construction Segment:
External revenue		8,516			6,768			(1,747	)		(20.5	)
Internal revenue		1,352			714			(638	)		(47.2	)
Total revenue from Construction Segment		9,868			7,482			(2,386	)		(24.2	)
Others Segment:
External revenue		3,068			2,697			(371	)		(12.1	)
Internal revenue		2,691			2,380			(311	)		(11.6	)
Total revenue from Others Segment		5,760			5,077			(683	)		(11.9	)
Total revenue prior to consolidation adjustments and basis difference		87,472			81,885			(5,589	)		(6.4	)
Consolidation adjustments		(29,279	)		(28,802	)		478			(1.6	)
Basis difference (1)		330			(144	)		(474	)		N.A.	(2)
Revenue	￦	58,522		￦	52,940			(5,582	)		(9.5	)

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

(2) N.A. means not applicable.

Our revenue decreased by 9.5%, or Won 5,582 billion, from Won 58,522 billion in 2015 to Won 52,940 billion in 2016 due to decreases in external revenues from each of our four segments. Specifically:

Steel Segment. External revenue from the Steel Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 5.1%, or Won 1,449 billion, from Won 28,293 billion in 2015 to Won 26,844 billion primarily due to a decrease in the average unit sales price per ton of the principal steel products produced by us and directly sold to external customers, which was offset in part by an increase in our sales volume of the steel products produced by us and directly sold to external customers (including miscellaneous steel products not included in any of our major product categories). The weighted average unit sales price per ton of the principal steel products produced by us and directly sold to external customers decreased by 6.6% from Won 798,217 per ton in 2015 to Won 745,476 per ton in 2016, while the overall sales volume of the steel products produced by us and directly sold to external customers (including miscellaneous steel products) increased by 4.1% from 31.6 million tons in 2015 to 32.9 million tons in 2016. Such factors were principally attributable to the following:

• The unit sales prices in Won of each of our major product categories decreased from 2015 to 2016. Silicon steel sheets, wire rods, stainless steel products, hot rolled products, plates and

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cold rolled products produced by us and directly sold to external customers decreased by 17.0%, 11.9%, 9.2%, 7.6%, 5.0% and 4.6%, respectively, from 2015 to 2016. For a discussion of changes in the unit sales prices of each of our principal product lines, see “— Overview — Sales Volume, Prices and Product Mix” above.

• The sales volume of each of our major product categories increased from 2015 to 2016. The sales volume of stainless steel products, cold rolled products, plates, wire rods, hot rolled products and silicon steel products produced by us and directly sold to external customers increased by 9.8%, 6.0%, 3.5%, 2.6%, 1.1% and 0.2%, respectively, from 2015 to 2016. For a discussion of changes in sales volume of each of our principal product lines, see “Item 4.B. Business Overview — Major Products.”

Total revenue from the Steel Segment, which includes internal revenue from inter-company transactions, decreased by 4.3%, or Won 1,931 billion, from Won 44,837 billion in 2015 to Won 42,906 billion in 2016 as internal revenue from inter-company transactions decreased by 2.9%, or Won 482 billion, from Won 16,544 billion in 2015 to Won 16,062 billion in 2016. Such decrease primarily reflected, in addition to factors discussed above, a decrease in the average unit sales price of the steel products sold to our sales subsidiaries.

Trading Segment. External revenue from the Trading Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 8.4%, or Won 1,541 billion, from Won 18,315 billion in 2015 to Won 16,774 billion in 2016 primarily due to a decrease in third-country trades by POSCO Daewoo and our other trading subsidiaries from 2015 to 2016, reflecting market conditions related to the deterioration of the global economy that has been characterized by weaker demand and falling prices for export and import products, reduced trading volume and intense competition among trading companies.

Total revenue from the Trading Segment, which includes internal revenue from inter-company transactions, decreased by 2.2%, or Won 587 billion, from Won 27,008 billion in 2015 to Won 26,420 billion in 2016 as internal revenue from inter-company transactions increased by 11.0%, or Won 954 billion, from Won 8,692 billion in 2015 to Won 9,646 billion in 2016 primarily due to an increase in our steel sales activities through trading subsidiaries.

Construction Segment. External revenue from the Construction Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 20.5%, or Won 1,747 billion, from Won 8,516 billion in 2015 to Won 6,768 billion in 2016 primarily due to a general decrease in POSCO E&C’s construction activities reflecting weakening of market conditions in the domestic construction industry as well as a decrease in demand for EPC projects in Korea and abroad.

Total revenue from the Construction Segment, which includes internal revenue from inter-company transactions, decreased by 24.2%, or Won 2,386 billion, from Won 9,868 billion in 2015 to Won 7,482 billion in 2016 as internal revenue from inter-company transactions decreased by 47.2%, or Won 638 billion, from Won 1,352 billion in 2015 to Won 714 billion in 2016. Such decrease in internal revenue reflected a decrease in the amount of construction activities for member companies of the POSCO Group in 2016 compared to 2015.

Others Segment. The Others Segment primarily includes power generation, LNG production, network and system integration, logistics and magnesium coil and sheet production. External revenue from the Others Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 12.1%, or Won 371 billion, from Won 3,068 billion in 2015 to Won 2,697 billion in 2016 primarily due to a decrease in revenue of POSCO Energy Corporation reflecting decreases in the unit price as well as volume of electric power sold.

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Total revenue from the Others Segment, which includes internal revenue from inter-company transactions, decreased by 11.9%, or Won 683 billion, from Won 5,760 billion in 2015 to Won 5,077 billion in 2016 as internal revenue from inter-company transactions decreased by 11.6% or Won 311 billion, from Won 2,691 billion in 2015 to Won 2,380 billion in 2016. Such decrease primarily reflected a decrease in inter-company sales related to a general reduction in investments made by the POSCO Group in 2016.

Cost of Sales

Our cost of sales decreased by 11.0%, or Won 5,747 billion, from Won 52,018 billion in 2015 to Won 46,271 billion in 2016. The decrease in cost of sales was primarily due to decreases in the average price in Won terms of key raw materials that were used to manufacture our finished goods sold, as well as a decrease in construction activities as discussed above, which were partially offset by an increase in our sales volume of steel products.

The following table presents a breakdown of our cost of sales by segment, prior to adjusting for inter-company transactions that are eliminated during consolidation and basis difference, and changes therein for 2015 and 2016.

							Changes
	For the Year Ended December 31,						2015 versus 2016
	2015			2016			Amount			%
	(In billions of Won)
Steel Segment	￦	40,381		￦	37,437		￦	(2,944	)		(7.3	)%
Trading Segment		25,563			25,090			(473	)		(1.8	)
Construction Segment		9,248			7,564			(1,685	)		(18.2	)
Others Segment		5,158			4,507			(651	)		(12.6	)
Consolidation adjustments		(28,692	)		(28,204	)		488			(1.7	)
Basis difference (1)		360			(123	)		(483	)		N.A.	(2)
Cost of sales	￦	52,018		￦	46,271		￦	(5,747	)		(11.0	)%

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

(2) N.A. means not applicable.

Steel Segment. The cost of sales of our Steel Segment, prior to consolidation adjustments, decreased by 7.3%, or Won 2,944 billion, from Won 40,381 billion in 2015 to Won 37,437 billion in 2016 primarily due to decreases in the average price in Won terms of key raw materials that were used to manufacture our finished goods sold, the impact of which was partially offset by an increase in our sales volume of the principal steel products produced by us and sold to external and internal customers.

Trading Segment. The cost of sales of our Trading Segment, prior to consolidation adjustments, decreased by 1.8%, or Won 473 billion, from Won 25,563 billion in 2015 to Won 25,090 billion in 2016 primarily due to decreases in cost of export and import products sold as well as our trading volumes, the impact of which was partially offset by an increase in the production costs related to gas produced at the Myanmar gas fields and sold to customers.

Construction Segment. The cost of sales of our Construction Segment, prior to consolidation adjustments, decreased by 18.2%, or Won 1,685 billion, from Won 9,248 billion in 2015 to Won 7,564 billion in 2016 in line with the decrease in the level of construction activities described above.

Others Segment. The cost of sales of our Others Segment, prior to consolidation adjustments, decreased by 12.6%, or Won 651 billion, from Won 5,158 billion in 2015 to Won 4,507 billion in 2016

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primarily due to decreases in the average price in Won terms of key raw materials used to produce electricity as well as the volume of electricity produced and sold by POSCO Energy Corporation.

Gross Profit

Our gross profit increased by 2.5%, or Won 164 billion, from Won 6,504 billion in 2015 to Won 6,668 billion in 2016 primarily due to an increase in gross profit of our Steel Segment, which was partially offset by decreases in gross profit of our Construction Segment, Trading Segment and Others Segment. Our gross margin increased from 11.1% in 2015 to 12.6% in 2016.

The following table presents our gross profit by segment, prior to adjusting for inter-company transactions that are eliminated during consolidation and basis difference, and changes therein for 2015 and 2016.

							Changes
	For the Year Ended December 31,						2015 versus 2016
	2015			2016			Amount			%
	(In billions of Won)
Steel Segment	￦	4,456		￦	5,469		￦	1,013			22.7	%
Trading Segment		1,445			1,330			(115	)		(7.9	)
Construction Segment		619			(82	)		(701	)		N.A.	(2)
Others Segment		601			570			(32	)		(5.3	)
Consolidation adjustments		(587	)		(598	)		(11	)		1.9
Basis difference (1)		(30)			(21	)		9			(30.0	)
Gross profit	￦	6,504		￦	6,668		￦	164			2.5	%

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

(2) N.A. means not applicable.

Steel Segment. The gross profit of our Steel Segment, prior to consolidation adjustments, increased by 22.7%, or Won 1,013 billion, from Won 4,456 billion in 2015 to Won 5,469 billion in 2016 primarily due to a decrease in the average price in Won terms of coal and other key raw materials that were used to manufacture our finished steel products sold as well as an increase in the overall sales volume of our principal steel products, which were partially offset by a decrease in the average unit sales price per ton of the principal steel products produced by us and sold to external and internal customers, as discussed above. The gross margin of our Steel Segment, which is gross profit as a percentage of total revenue prior to consolidation adjustments, increased from 9.9% in 2015 to 12.7% in 2016, as we focused our production and marketing efforts on selling higher margin, higher value added premium products in 2016.

Trading Segment. The gross profit of our Trading Segment, prior to consolidation adjustments, decreased by 7.9%, or Won 115 billion, from Won 1,445 billion in 2015 to Won 1,330 billion in 2016, reflecting a decrease in trading margins from weaker demand and falling prices for export and import products, which was partially offset by an increase in gross profit of the Myanmar gas fields. The gross margin of our Trading Segment, prior to consolidation adjustments, decreased from 5.3% in 2015 to 5.0% in 2016.

Construction Segment. Our Construction Segment recorded gross profit of Won 619 billion in 2015 compared to gross loss of Won 82 billion in 2016, and the gross margin decreased from 6.3% in 2015 to (1.1)% in 2016, primarily due to losses incurred in connection with overseas construction projects, in particular a loss of Won 157 billion in 2016 related to delay in construction of the CSP-Companhia Siderurgia do Pecem steel plant complex in Brazil, as well as a decrease in the amount of relatively high-margin construction projects for member companies of the POSCO Group.

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Weakening of market conditions in the domestic construction industry in recent years, particularly relating to the public sector, resulted in an increase in competition.

Others Segment. The gross profit of our Others Segment, prior to consolidation adjustments, decreased by 5.3%, or Won 32 billion, from Won 601 billion in 2015 to Won 570 billion in 2016 primarily due to decreases in gross profit of POSCO Energy Corporation. Despite such decreases, gross margin increased from 10.4% in 2015 to 11.2% in 2016 due to the larger decrease in revenue as discussed above.

Selling and Administrative Expenses

The following table presents a breakdown of our selling and administrative expenses and changes therein for 2015 and 2016.

					Changes
	For the Year Ended December 31,				2015 versus 2016
	2015		2016		Amount			%
	(In billions of Won)
Freight and custody expenses	￦	1,532	￦	1,342	￦	(190	)		(12.4	)%
Sales commissions		80		94		14			17.7
Sales promotion		22		11		(12	)		(52.5	)
Sales insurance premium		31		31		1			2.3
Contract cost		38		49		11			28.8
Others		25		26		0			1.7
Total selling expenses	￦	1,729	￦	1,554		(175	)		(10.1	)
Wages and salaries	￦	811	￦	770	￦	(41	)		(5.1	)%
Expenses related to post-employment benefits		87		201		114			130.2
Other employee benefits		194		177		(17	)		(8.9	)
Depreciation and amortization		274		243		(31	)		(11.3	)
Taxes and public dues		74		79		5			6.2
Rental		120		82		(38	)		(31.6	)
Advertising		91		86		(5	)		(5.0	)
Research and development		136		121		(15	)		(11.0	)
Service fees		219		201		(18	)		(8.1	)
Bad debt expenses		190		165		(24	)		(12.9	)
Others		200		167		(33	)		(16.5	)
Total administrative expenses	￦	2,395	￦	2,292		(104	)		(4.3	)
Total selling and administrative expenses	￦	4,124	￦	3,845		(279	)		(6.8	)

Our selling and administrative expenses decreased by 6.8%, or Won 279 billion, from Won 4,124 billion in 2015 to Won 3,845 billion in 2016 primarily due to decreases in freight and custody expenses, wages and salaries and rental expenses, which were partially offset by an increase in expenses related to post-employment benefits. Such factors were principally attributable to the following:

• Our freight and custody expenses decreased by 12.4%, or Won 190 billion, from Won 1,532 billion in 2015 to Won 1,342 billion in 2016 primarily due to a decrease in freight rates, which was offset in part by an increase in our export volume.

• Our wages and salaries decreased by 5.1%, or Won 41 billion, from Won 811 billion in 2015 to Won 770 billion in 2016 primarily due to a decrease in the number of administrative personnel, including decrease related to the early retirement programs of POSCO E&C and POSCO Engineering in 2016.

• Our rental expenses decreased by 31.6%, or Won 38 billion, from Won 120 billion in 2015 to Won 82 billion in 2016 primarily due to decreases in payments for data communications lease lines and lease cars.

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• Our expenses related to post-employment benefits increased by 130.2%, or Won 114 billion, from Won 87 billion in 2015 to Won 201 billion in 2016 primarily due to expenses related to the early retirement programs of POSCO E&C and POSCO Engineering Co., Ltd.

Other Operating Income and Expenses

The following table presents a breakdown of our other operating income and changes therein for 2015 and 2016.

					Changes
	For the Year Ended December 31,				2015 versus 2016
	2015		2016		Amount			%
	(In billions of Won)
Gain on disposal of assets held for sale	￦	228	￦	23	￦	(205	)		(89.9	)%
Gain on disposal of investments in subsidiaries, associates and joint ventures		89		23		(65	)		(73.7	)
Gain on disposal of property, plant and equipment		23		24		1			4.8
Recovery of allowance for other doubtful accounts		10		13		2			21.1
Gain on insurance proceeds		15		22		7			49.6
Others		184		110		(74	)		(40.4	)
Total other operating income	￦	549	￦	215		(334	)		(60.8	)

Our other operating income decreased by 60.8%, or Won 334 billion, from Won 549 billion in 2015 to Won 215 billion in 2016 primarily due to decreases in gain on disposal of assets held for sale and gain on disposal of investments in subsidiaries, associates and joint ventures. Our gain on disposal of assets held for sale decreased by 89.9%, or Won 205 billion, from Won 228 billion in 2015 to Won 23 billion in 2016. In 2015, we recognized a gain of Won 228 billion on disposal of assets held for sale primarily from the disposal of our 52.2% interest in SeAH Changwon Integrated Special Steel (formerly POSCO Specialty Steel Co., Ltd.) and our shares in POSFINE Co., Ltd. In 2016, we recognized a gain of Won 23 billion on disposal of assets held for sale primarily from the disposal of our 80.0% interest in POSCO LED Co., Ltd. Our gain on disposal of investments in subsidiaries, associates and joint ventures decreased by 73.7%, or Won 65 billion, from Won 89 billion in 2015 to Won 23 billion in 2016 primarily due to a decrease in disposition of our interests in some of our subsidiaries and associates as part of our reorganization efforts.

The following table presents a breakdown of our other operating expenses and changes therein for 2015 and 2016.

					Changes
	For the Year Ended December 31,				2015 versus 2016
	2015		2016		Amount			%
	(In billions of Won)
Impairment losses on assets held for sale	￦	134	￦	25		(109	)		(81.4	)%
Loss on disposal of assets held for sale		190		0		(190	)		(99.9	)
Loss on disposal of investments in subsidiaries, associates and joint ventures		19		22		4			18.4
Loss on disposal of property, plant and equipment		102		87		(15	)		(14.9	)
Impairment losses on property, plant and equipment		136		197		61			44.5
Impairment losses on goodwill and intangible assets		161		128		(34	)		(20.8	)
Other bad debt expenses		158		50		(108	)		(68.2	)
Idle tangible assets expenses		13		6		(6	)		(49.6	)
Impairment losses on other non-current assets		12		10		(2	)		(19.3	)
Increase to provisions		18		53		35			188.4
Donations		63		44		(19	)		(30.4	)
Others (1)		436		133		(302	)		(69.4	)
Total other operating expenses	￦	1,442	￦	756		(687	)		(47.6	)

(1) Includes lawsuit settlement expenses of Won 299 billion in 2015.

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Our other operating expenses decreased by 47.6%, or Won 687 billion, from Won 1,442 billion in 2015 to Won 756 billion in 2016, primarily due to our recognition of lawsuit settlement expenses related to the litigation with Nippon Steel & Sumitomo Metal Corporation in 2015 as well as decreases in our loss on disposal of assets held for sale, impairment losses on assets held for sale, other bad debt expenses and impairment losses on goodwill and intangible assets, which were partially offset by an increase in impairment losses on property, plant and equipment. Such factors were principally attributable to the following:

• We recognized lawsuit settlement expenses of Won 299 billion in 2015 related to the litigation with Nippon Steel & Sumitomo Metal Corporation, compared to no such expenses in 2016.

• Our loss on disposal of assets held for sale decreased by 99.9%, or Won 190 billion, from Won 190 billion in 2015 to Won 0.3 billion in 2016 primarily due to the loss related to disposal of our investment in Nacional Minerios S.A. in 2015.

• Our impairment losses on assets held for sale decreased by 81.4%, or Won 109 billion, from Won 134 billion in 2015 to Won 25 billion in 2016. In 2015, our impairment losses related primarily to classification of our investment in Nacional Minerios S.A. as assets held for sale and impairment losses from the fair value of such investment less cost to sell being below the carrying amount. In 2016, our impairment losses related primarily to a decrease in value of a building in Songdo.

• Our other bad debt expenses decreased by 68.2%, or Won 108 billion, from Won 158 billion in 2015 to Won 50 billion in 2016. In 2015, our other bad debt expenses primarily related to POSCO Plantec’s receivables in Iran and POSCO Daewoo’s receivables in Kazakhstan. In 2016, our other bad debt expenses related primarily to financing of the Dongtan Metapolis project of POSCO E&C.

• Our impairment losses on goodwill and intangible assets decreased by 20.8%, or Won 34 billion, from Won 161 billion in 2015 to Won 128 billion in 2016. In 2015, we recognized impairment losses on goodwill relating to EPC Equities LLP of Won 46 billion, POSCO Plantec Co., Ltd. of Won 38 billion and POSCO Thainox Public Company Limited of Won 16 billion. In 2016, our impairment losses on goodwill and intangible assets related primarily to impairment losses on goodwill of Won 83 billion relating to POSCO Engineering Co., Ltd. In addition, we recognized full impairment losses of Won 12 billion relating to SANTOS CMI S.A.

• Our impairment losses on property, plant and equipment increased by 44.5%, or Won 61 billion, from Won 136 billion in 2015 to Won 197 billion in 2016 primarily due to Won 62 billion of impairment losses in 2016 related to continuing operating loss of the fuel cell business of POSCO Energy. In addition, we recorded Won 58 billion of impairment losses in 2016 related to disposal plans of certain assets.

Operating Profit

Due to the factors described above, our operating profit increased by 53.6%, or Won 796 billion, from Won 1,486 billion in 2015 to Won 2,282 billion in 2016. Our operating margin increased from 2.5% in 2015 to 4.3% in 2016.

Share of Loss of Equity-Accounted Investees

Our share of loss of equity-accounted investees decreased by 82.5%, or by Won 417 billion, from Won 506 billion in 2015 to Won 89 billion in 2016. In 2015, we recognized a net loss for our proportionate share of equity-accounted investees of Won 506 billion primarily due to our share of losses of Eureka Moly LLC (Won 147 billion), CSP-Compania Siderurgica do Pecem (Won 145 billion)

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and DMSA/AMSA (Won 138 billion), which were partially offset by our share of profits of South-East Asia Gas Pipeline Company Ltd. (Won 54 billion), KOBRASCO (Won 31 billion) and AES-VCM Mong Duong Power Company Limited (Won 30 billion). In 2016, we recognized a net loss for our proportionate share of equity-accounted investees of Won 89 billion primarily due to our share of losses of POSCO Plantec Co., Ltd. (Won 172 billion) and DMSA/AMSA (Won 60 billion), which were partially offset by our share of profits of CSP-Compania Siderurgica do Pecem (Won 117 billion) and South-East Asia Gas Pipeline Company Ltd. (Won 47 billion). See Note 11 of Notes to Consolidated Financial Statements.

Finance Income and Finance Costs

The following table presents a breakdown of our finance income and costs and changes therein for 2015 and 2016.

					Changes
	For the Year Ended December 31,				2015 versus 2016
	2015		2016		Amount			%
	(In billions of Won)
Interest income	￦	210	￦	182	￦	(28	)		(13.2	)%
Dividend income		184		41		(143	)		(77.7	)
Gain on foreign currency transactions		1,025		1,033		7			0.7
Gain on foreign currency translations		466		378		(88	)		(19.0	)
Gain on derivatives transactions		366		317		(50	)		(13.6	)
Gain on valuation of derivatives		155		147		(8	)		(5.3	)
Gain on disposals of available-for-sale financial assets		139		131		(8	)		(6.0	)
Others		11		4		(7	)		(65.4	)
Total finance income	￦	2,557	￦	2,232		(325	)		(12.7	)
Interest expenses	￦	789	￦	659		(130	)		(16.5	)%
Loss on foreign currency transactions		1,157		1,147		(10	)		(0.9	)
Loss on foreign currency translations		717		405		(311	)		(43.4	)
Loss on derivatives transactions		343		338		(5	)		(1.4	)
Loss on valuation of derivatives		72		163		91			125.5
Impairment loss on available-for-sale financial assets		143		248		106			74.0
Others		166		53		(113	)		(67.8	)
Total finance costs	￦	3,387	￦	3,014		(373	)		(11.0	)

Our net loss on foreign currency translations decreased by 89.0%, or Won 223 billion, from Won 251 billion in 2015 to Won 28 billion in 2016, and our net loss on foreign currency transactions decreased by 13.1%, or Won 17 billion, from Won 132 billion in 2015 to Won 115 billion in 2016, as the Won depreciated against the Dollar in both 2015 and 2016. Such net losses were also impacted by depreciation of the Won against the Brazilian real and the Australian dollar in 2015 compared to appreciation of the Won against the Brazilian real and the Australian dollar in 2016. In terms of the market average exchange rates announced by Seoul Money Brokerage Services, Ltd., the Won depreciated from Won 1,099.2 to US$1.00 as of December 31, 2014 to Won 1,172.0 to US$1.00 as of December 31, 2015 and further depreciated, but to a lesser extent, to Won 1,208.5 to US$1.00 as of December 31, 2016. Against such fluctuations, we recognized a net gain on valuation of derivatives of Won 83 billion in 2015 compared to a net loss on valuations of derivatives of Won 16 billion in 2016, as well as a net gain on transactions of derivatives of Won 23 billion in 2015 compared to a net loss on transactions of derivatives of Won 22 billion in 2016.

Our interest expenses decreased by 16.5%, or Won 130 billion, from Won 789 billion in 2015 to Won 659 billion in 2016 primarily due to a general decrease in interest rates in Korea as well as a decrease in the level of short-term borrowings.

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Our impairment loss on available-for-sale financial assets increased by 74.0%, or Won 106 billion, from Won 143 billion in 2015 to Won 248 billion in 2016 primarily due to an increase in our impairment related primarily to a significant and prolonged decline in the fair value of shares of Nippon Steel & Sumitomo Metal Corporation below cost.

Our dividend income decreased by 77.7%, or Won 143 billion, from Won 184 billion in 2015 to Won 41 billion in 2016 primarily due to dividends of Won 146 billion in 2015 related to our interest in Nacional Minerios S.A. compared to no such dividends in 2016.

Profit before Income Taxes

Due to the factors described above, our profit before income taxes increased by 838.9%, or Won 1,261 billion, from Won 150 billion in 2015 to Won 1,412 billion in 2016.

The following table presents our profit and loss by segment, prior to adjusting for goodwill and corporate fair-value adjustments, elimination of inter-segment profits, income tax expense and basis difference, and changes therein for 2015 and 2016.

							Changes
	For the Year Ended December 31,						2015 versus 2016
	2015			2016			Amount			%
	(In billions of Won)
Steel Segment	￦	181		￦	1,511		￦	1,330			732.7	%
Trading Segment		39			53			14			37.1
Construction Segment		(276	)		(1,404	)		(1,128	)		409.2
Others Segment		(66	)		(26	)		40			(60.5	)
Goodwill and corporate fair value adjustments		(95	)		(123	)		(28	)		29.4
Elimination of inter-segment profits		120			1,036			916			764.6
Income tax expense		277			385			108			38.9
Basis difference (1)		(30	)		(21	)		9			(30.1	)
Profit before income taxes	￦	150		￦	1,412		￦	1,261			838.9	%

(1) Basis difference is related to the difference in recognizing revenue and expenses of the Construction Segment in connection with development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 of Notes to Consolidated Financial Statements.

Income Tax Expense

Our income tax expense increased by 42.4%, or Won 113 billion, from Won 267 billion in 2015 to Won 380 billion in 2016. Our effective tax rate decreased from 177.3% in 2015 to 26.9% in 2016 primarily due to the following:

• a decrease in tax related to investments in subsidiaries, associates and joint ventures from Won 440 billion in 2015 to Won 77 billion in 2016 (that resulted in a decrease in effective tax rate of 286.9%). In 2015, some of our consolidated subsidiaries incurred losses, which caused Won 212 billion of decrease in unrecognized deferred tax assets for subsidiaries and associates during such year;

• a decrease in tax credits from Won 152 billion in 2015 to Won 30 billion in 2016 (that resulted in an increase in effective tax rate of 99.1%). In 2015, there was a large amount of tax credit primarily due to claim for rectification; and

• a decrease in over provision from prior years from Won 47 billion in 2015 to Won 12 billion in 2016 (that resulted in an increase in effective tax rate of 30.5%). In 2015, there was an increase in over provision from prior years related to a favorable ruling in a tax audit appeal.

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See Note 35 of Notes to Consolidated Financial Statements.

Profit (Loss)

Due to the factors described above, we recorded loss of Won 116 billion in 2015 compared to profit of Won 1,032  billion in 2016.

Item 5.B.  Liquidity and Capital Resources

The following table sets forth the summary of our cash flows for the periods indicated.

	For the Year Ended December 31,
	2015			2016			2017
	(In billions of Won)
Net cash provided by operating activities	￦	7,602		￦	5,269		￦	5,607
Net cash used in investing activities		(4,535	)		(3,755	)		(3,818	)
Net cash used in financing activities		(2,242	)		(3,951	)		(1,566	)
Effect of exchange rate fluctuations on cash held		23			13			(59	)
Cash and cash equivalents at beginning of period		4,022			4,871			2,448
Cash and cash equivalents at end of period		4,871			2,448			2,613
Net increase (decrease) in cash and cash equivalents		849			(2,424	)		165

Capital Requirements

Historically, uses of cash consisted principally of purchases of property, plant and equipment and other assets and repayments of outstanding debt and payments of dividends.

Net cash used in investing activities was Won 4,535 billion in 2015, Won 3,755 billion in 2016 and Won 3,818 billion in 2017. These amounts included acquisition of property, plant and equipment of Won 2,560 billion in 2015, Won 2,324 billion in 2016 and Won 2,288 billion in 2017. We plan to spend approximately Won 4.2 trillion in capital expenditures in 2018, which we may adjust on an on-going basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. We may delay or not implement some of our current capital expenditure plans based on our assessment of such market conditions. We had net acquisitions of short-term financial instruments of Won 2,443 billion in 2015, Won 1,401 billion in 2016 and Won 1,697 billion in 2017. We also had net disposals of available-for-sale investments of Won 220 billion in 2015, net acquisition of available-for-sale investments of Won 48 billion in 2016 and net disposals of available-for-sale investments of Won 941 billion in 2017.

In our financing activities, we used cash of Won 3,510 billion in 2015, Won 4,275 billion in 2016 and Won 3,136 billion in 2017 for repayments of borrowings. We paid dividends on common stock in the amount of Won 823 billion in 2015, Won 709 billion in 2016 and Won 863 billion in 2017.

In recent years, we have also selectively considered various opportunities to acquire or invest in companies that may complement our businesses, as well as invest in overseas resources development projects. We may require additional capital for such acquisitions or entering into other strategic relationships. Other than capital required for such activities, we anticipate that capital expenditures, repayments of outstanding debt and payments of cash dividends will represent the most significant uses of funds for the next several years.

Payments of contractual obligations and commitments will also require considerable resources. In our ordinary course of business, we routinely enter into commercial commitments for various aspects of our operations, as well as issue guarantees for indebtedness of our related parties and others. For our contingent liabilities on outstanding guarantees provided by us, see Note 38(b) of Notes

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to Consolidated Financial Statements. The following table sets forth the amount of long-term debt, capital lease and operating lease obligations as of December 31, 2017.

	Payments Due by Period
	Total		Less than 1 Year		1 to 3 Years		4 to 5 Years		More than 5 Years
	(In billions of Won)
Long-term debt obligations (a)	￦	12,951	￦	3,003	￦	5,386	￦	3,026	￦	1,536
Interest payments on long-term debt (b)		1,378		491		563		226		98
Capital lease obligations		98		18		40		39		1
Operating lease obligations		204		33		41		41		89
Purchase obligations (c)		21,075		9,758		6,425		3,324		1,568
Accrued severance benefits (d)		2,519		109		280		334		1,796
Total	￦	38,225	￦	13,412	￦	12,735	￦	6,990	￦	5,088

(a) Includes the current portion and premium on bond redemption but excludes amortization of discount on debentures and issuance costs.

(b) As of December 31, 2017, a portion of our long-term debt carried variable interest rates. We used the interest rate in effect as of December 31, 2017 in calculating the interest payments on long-term debt for the periods indicated.

(c) Our purchase obligations include supply contracts to purchase iron ore, coal, nickel, LNG and other raw materials. These contracts generally have terms of one to ten years and the long-term contracts provide for periodic price adjustments according to the market prices. As of December 31, 2017, 116 million tons of iron ore and 18 million tons of coal remained to be purchased under long-term contracts. In addition, we entered into an agreement with Tangguh LNG Consortium in Indonesia to purchase 550 thousand tons of LNG for 20 years commencing in August 2005. The purchase price under the agreement with Tangguh LNG Consortium is variable based on the monthly standard oil price (as represented by the Japan Customs cleared Crude Price), subject to a ceiling. We used the market price and exchange rate in effect as of December 31, 2017 in calculating the iron ore, coal and LNG purchase obligations described above for the periods indicated.

(d) Represents, as of December 31, 2017, the expected amount of severance benefits that we will be required to pay under applicable Korean law to all of our employees when they reach their normal retirement age. The amounts were determined based on the employees’ current salary rates and the number of service years that will be accumulated upon their retirement. These amounts do not include amounts that may be paid to employees who cease to work at the company before their normal retirement age.

Capital Resources

We have traditionally met our working capital and other capital requirements principally from cash provided by operations, while raising the remainder of our requirements primarily through long-term debt and short-term borrowings. We expect that these sources will continue to be our principal sources of cash in the future. From time to time, we may also generate cash through issuance of hybrid bonds and sale of treasury shares and our holdings in available-for-sale securities.

Our net cash provided by operating activities decreased by 30.7%, or Won 2,332 billion, from Won 7,602 billion in 2015 to Won 5,269 billion in 2016. Our gross cash flow from our sales activities decreased as discussed above. In addition, the overall inventory turnover was slower in 2016 compared to 2015 as our materials-in-transit increased during the year. However, we continued to actively manage our finished goods inventory level in 2016 in response to the continuing uncertainties in the global economy and overcapacity in the global steel industry. Offsetting such impact from usage of cash, our outstanding trade accounts and notes payable increased in 2016, as we lengthened payment terms of some of our key suppliers, which in turn positively impacted our net cash provided by operating activities.

Our net cash provided by operating activities increased by 6.4%, or Won 338 billion, from Won 5,269 billion in 2016 to Won 5,607 billion in 2017. Our gross cash flow from our sales activities increased as discussed above. In addition, our cost of sales decreased as a percentage of sales revenue from 87.4% in 2016 to 86.2% in 2017, further enhancing our net cash provided by operating

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activities. However, our outstanding notes payable and our subsidiaries’ outstanding notes payable decreased in 2017, which in turn negatively impacted our net cash provided by operating activities.

We had net repayments of borrowings, after adjusting for proceeds from borrowings, of Won 1,731 billion in 2015, Won 2,286 billion in 2016 and Won 1,410 billion in 2017. We had net repayment of short-term borrowings, after deducting for proceeds of short-term borrowings, of Won 846 billion in 2015 and Won 886 billion in 2016 and net proceeds of short-term borrowings, after deducting for repayment of short-term borrowings, of Won 558 billion in 2017. Long-term borrowings, excluding current installments, were Won 12,849 billion as of December 31, 2015, Won 12,510 billion as of December 31, 2016 and Won 9,789 billion as of December 31, 2017. Total short-term borrowings and current installments of long-term borrowings were Won 12,371 billion as of December 31, 2015, Won 10,195 billion as of December 31, 2016 and Won 11,275 billion as of December 31, 2017. Outstanding hybrid bonds were Won 997 billion as of December 31, 2015, 2016 and 2017. Our net borrowings-to-equity ratio, which is calculated by deducting cash and cash equivalents from total borrowings and dividing the net amount with our total equity, was 45.21% as of December 31, 2015, 44.26% as of December 31, 2016 and 38.99% as of December 31, 2017.

We periodically increase our short-term borrowings and adjust our long-term debt financing levels depending on changes in our capital requirements. From time to time, we also generate cash from the sale of our treasury shares. We believe that we have sufficient working capital for our current requirements and that we have a variety of alternatives available to us to satisfy our liquidity requirements to the extent that they are not met by funds generated by operations, including the issuance of debt and equity securities and bank borrowings denominated in Won and various foreign currencies. However, our ability to rely on some of these alternatives could be affected by factors such as the liquidity of the Korean and the global financial markets, prevailing interest rates, our credit rating and the Government’s policies regarding Won currency and foreign currency borrowings.

Liquidity

We had working capital (current assets minus current liabilities) of Won 9,148 billion as of December 31, 2015, Won 10,711 billion as of December 31, 2016 and Won 12,354 billion as of December 31, 2017. Our holdings of cash and cash equivalents (which do not include cash and cash equivalents categorized under “assets held for sale”) were Won 4,870 billion as of December 31, 2015, Won 2,448 billion as of December 31, 2016 and Won 2,613 billion as of December 31, 2017. See Notes 5 and 10 of Notes to Consolidated Financial Statements. Our holding of other receivables and other short-term financial assets were Won 5,590 billion as of December 31, 2015, Won 6,765 billion as of December 31, 2016 and Won 8,682 billion as of December 31, 2017. As of December 31, 2017, approximately 18% of our cash and cash equivalents, other receivables and other short-term financial assets were held outside of Korea, which we expect to use in our operations abroad, including capital expenditure activities. In the event that such assets are needed for our operations in Korea, such amounts are typically not restricted under local laws from being used in Korea. In addition, we believe that there are no material tax implications in the event our foreign subsidiaries elect to grant cash dividends to us. POSCO had total available credit lines of Won 1,574 billion as of December 31, 2017, Won 300 billion of which was used as of such date. We have not had, and do not believe that we will have, difficulty gaining access to short-term financing sufficient to meet our current requirements.

Our liquidity is affected by exchange rate fluctuations. See “— Overview — Exchange Rate Fluctuations.”

Capital Expenditures and Capacity Expansion

Cash used for acquisitions of property, plant and equipment was Won 2,560 billion in 2015, Won 2,324 billion in 2016 and Won 2,288 billion in 2017. We plan to spend approximately Won 4.2 trillion in capital expenditures in 2018, which we may adjust on an on-going basis subject to market

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demand for our products, the production outlook of the global steel industry and global economic conditions in general. We may delay or not implement some of our current capital expenditure plans based on our assessment of such market conditions.

Our current plan for capital investment in production facilities emphasizes capacity rationalization, increased production of higher value-added products and improvements in the efficiency of older facilities in order to reduce operating costs. The following table sets out the major items of our capital expenditures as of December 31, 2017:

Project	Expected Completion Date		Total Cost of Project		Estimated Remaining Cost of Completion as of December 31, 2017
			(In billions of Won)
Reinforcement of hot rolling mill no. 4 at Gwangyang Works and rationalization of no. 2 FINEX plant at Pohang Works		October 2019	￦	1,470	￦	1,054
Construction of synthetic natural gas plant		December 2018		1,194		34
Rationalization and upgrading of raw materials processing facilities at Pohang Works and Gwangyang Works and expansion of facilities at Gwangyang Works		February 2019		433		40

Additional major capital expenditure projects that we plan to start in 2018 include the following:

Project	Expected Spending in 2018		Expected Spending in 2019		Expected Spending in 2020		Total
			(In billions of Won)
Rationalization and upgrading of facilities at Gwangyang Works and Pohang Works related to periodic maintenance and expansion of production of premium steel products	￦	205	￦	729	￦	813	￦	1,747
Rationalization and upgrading of facilities at Gwangyang Works and Pohang Works related to promotion of environmental efficiencies and diversification of product offerings		92		585		594		1,270

Item 5.C.  Research and Development, Patents and Licenses, Etc.

We maintain a research and development program to carry out basic research and applied technology development activities. As of December 31, 2017, POSCO Technical Research Laboratories employed 934 personnel, including 502 researchers. Our technology development department also works closely with the Pohang University of Science & Technology, Korea’s first research-oriented college founded by us in 1986, and the Research Institute of Industrial Science and Technology, Korea’s first private comprehensive research institute founded by us in 1987. We also established POSCO Research Institute (POSRI) in 1994, which engages in research activities and consulting services.

We recorded research and development expenses of Won 356 billion as cost of sales in 2015, Won 324 billion in 2016 and Won 361 billion in 2017, as well as research and development expenses of Won 136 billion as administrative expenses in 2015, Won 121 billion in 2016 and Won 126 billion in 2017.

Our research and development program has filed 42,448 industrial rights applications relating to steel-making technology, 15,722 of which were registered as of December 31, 2017, and has successfully applied many of these to the improvement of our manufacturing process.

Item 5.D.  Trend Information

These matters are discussed under Item 5.A. and Item 5.B. above where relevant.

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Item 5.E.  Off-balance Sheet Arrangements

As of December 31, 2016 and 2017, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Item 5.F.  Tabular Disclosure of Contractual Obligations

These matters are discussed under Item 5.B. above where relevant.

Item 5.G.  Safe Harbor

See “Item 3. Key Information — Item 3.D. Risk Factors — This annual report contains “forward-looking statements” that are subject to various risks and uncertainties.

Item 6.  Directors, Senior Management and Employees

Item 6.A.  Directors and Senior Management

Board of Directors

Our board of directors has the ultimate responsibility for the management of our business affairs. Our board consists of five directors who are our executive officers (“Inside Directors”) and seven directors who are outside directors (“Outside Directors”). Our shareholders elect both the Inside Directors and Outside Directors at a general meeting of shareholders. Candidates for Inside Directors are recommended to shareholders by the board of directors after the board reviews such candidates’ qualifications, and candidates for Outside Directors are recommended to the shareholders by a separate board committee consisting of three Outside Directors and one Inside Director (“Director Candidate Recommendation and Management Committee”) after the committee reviews such candidates’ qualifications. Pursuant to the Korean Commercial Act and our articles of incorporation, any shareholder holding our outstanding shares with voting rights may suggest candidates for Outside Directors to the Director Candidate Recommendation and Management Committee.

Our board of directors maintains the following five sub-committees:

• the Director Candidate Recommendation and Management Committee;

• the Evaluation and Compensation Committee;

• the Finance and Related Party Transactions Committee;

• the Executive Management Committee; and

• the Audit Committee.

Our board committees are described in greater detail below under “— Item 6.C. Board Practices.”

Under the Commercial Code and our articles of incorporation, one Chairman should be elected among the Outside Directors and several Representative Directors may be elected among the Inside Directors by our board of directors’ resolution.

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Inside Directors

Our current Inside Directors are:

Name	Position	Responsibilities and Division	Years as Director		Age		Expiration of Term of Office
Kwon, Oh-Joon	Chief Executive Officer and Representative Director	—		4		67	March 2020
Oh, In-Hwan	President and Representative Director	Chief Operating Officer I / Head of Steel Business and Operation		3		59	March 2019
Chang, In-Hwa	President and Representative Director	Chief Operating Officer II / Head of Steel Production Division		1		62	March 2019
Yu, Seong	Senior Executive Vice President	Head of Technology and Investment Division		1		61	March 2019
Chon, Jung-Son	Senior Executive Vice President	Head of Corporate Strategy and Finance Center		0		55	March 2019

All Inside Directors are engaged in our business on a full-time basis.

Outside Directors

Our current Outside Directors are set out in the table below. Each of our Outside Directors meets the applicable independence standards set forth under the rules of the Financial Investment Services and Capital Markets of Korea (the “FSCMA”).

Name	Position	Principal Occupation	Years as Director		Age		Expiration of Term of Office
Kim, Joo-Hyun	Chairman	President, the Financial News		3		65		March 2021
Lee, Myoung-Woo	Director	President, Dongwon Industries		5		63		March 2019
Bahk, Byong-Won	Director	Former Chairman, Korea Employers Federation		3		65		March 2021
Kim, Shin-Bae	Director	Former Vice Chairman, SK Group		1		63		March 2019
Chung, Moon-Ki	Director	Professor of Accounting, Sungkyunkwan University		1		59		March 2019
Chang, Seung-Wha	Director	Professor of Law, Seoul National University		1		54		March 2020
Kim, Sung-Jin	Director	Former Minister, Ministry of Oceans and Fisheries		0		68		March 2021

The term of office of the Directors elected in March 2018 is up to three (3) years. Each Director’s term expires at the close of the ordinary general meeting of shareholders convened in respect of the fiscal year that is the last one to end during such Director’s tenure.

Senior Management

In addition to the Inside Directors who are also our executive officers, we have the following executive officers:

Name	Position	Responsibility and Division	Age
Kim, Hag-Dong	Senior Executive Vice President	Head of Gwangyang Works		58
Jeong, Tak	Senior Executive Vice President	Head of Steel Business Division		59
Oh, Hyoung-Soo	Senior Executive Vice President	Head of Pohang Works		57

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Name	Position	Responsibility and Division	Age
Kim, Jhi-Yong	Senior Executive Vice President	President, PT Krakatau POSCO Co., Ltd.		56
Han, Sung-Hee	Senior Executive Vice President	Head of Management Support Division		57
Hwangbo, Won	Executive Vice President	Head of Human Resources Management Office		54
Lee, Jong-Sub	Executive Vice President	Steel Business Division		61
Lee, Duk-Lak	Executive Vice President	Head of Technology Management Office		57
Kwak, Jeong-Shik	Executive Vice President	Head of External Relations Office		60
Cho, Il-Hyun	Executive Vice President	Head of Investment Planning & Engineering Office		56
Kim, Gyo-Sung	Executive Vice President	Steel Business Division		56
Choi, Joo	Executive Vice President	Head of Technical Research Laboratories		59
Yoo, Byeong-Og	Executive Vice President	Head of Corporate Strategy Office		55
Lee, Sung-Wook	Executive Vice President	Head of Legal Affairs Office		53
Park, Yong-Kyu	Executive Vice President	Steel Production Division		58
Noh, Min-Yong	Executive Vice President	Head of Corporate Audit Office		54
Jung, Kyu-Jin	Executive Vice President	Head of Raw Materials Office II		57
Kim, Dong-Ho	Executive Vice President	CSP-Compania Siderurgica do Pecem		58
Yi, Sang-Ho	Executive Vice President	Steel Production Division		57
Yang, Weon-Jun	Executive Vice President	Head of Human Resources and Innovation Office		52
Bae, Jae-Tak	Executive Vice President	Head of Stainless Steel Marketing Office		53
Lee, Eun-Seok	Executive Vice President	Deputy Head of Works (Stainless Steel Production, Pohang Works)		57
Kim, Sun-Koo	Executive Vice President	Technical Research Laboratories		58
Lee, Si-Woo	Executive Vice President	Head of Steel Production Strategy Office		57
Kim, Gwang-Soo	Executive Vice President	Head of Steel Business Strategy Office		57
Lim, Seung-Kyu	Executive Vice President	Head of Overseas Business Management Office		54
Choo, Se-Don	Executive Vice President	Head of Steel Solution Marketing Office		56
Jung, Duk-Kyoon	Executive Vice President	Head of Information Planning Office		55
Jung, Hae-Seong	Senior Vice President	Head of Raw Materials Office I		54
Yun, Yang-Su	Senior Vice President	Head of Automotive Materials Marketing Office		54
Won, Hyung-Il	Senior Vice President	Legal Affairs Office		49
Kim, Soon-Ki	Senior Vice President	Head of Labor and Outside Services Office		53
Min, Jung-Ki	Senior Vice President	Head of Production Division, PT Krakatau POSCO Co., Ltd.		58
Park, Hyeon	Senior Vice President	Head of New Business Office		51
Lee, Sang-Hyeon	Senior Vice President	Head of Gwangyang Research Lab		57
Yoon, Duk-Il	Senior Vice President	Head of Finance Office		54
Lee, Jeon-Hyeok	Senior Vice President	Head of Domestic Business Management Office		54
Kim, Bok-Tae	Senior Vice President	Head of Global Marketing Coordination Office		56
Chun, Sung-Lae	Senior Vice President	Head of Hot Rolled Steel Marketing Office		54
Lee, Ki-Ho	Senior Vice President	Steel Production Division		59
Kim, Min-Chul	Senior Vice President	Deputy Head of Works (Safety and Maintenance, Gwangyang Works)		55
Kim, Jong-Sang	Senior Vice President	Technical Research Laboratories		57
Chun, Myung-Sik	Senior Vice President	Steel Production Division		58
Kim, Jeoung-Su	Senior Vice President	Deputy Head of Works (Administration, Gwangyang Works)		54

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Name	Position	Responsibility and Division	Age
Choi, Hyeon-Soo	Senior Vice President	Head of Europe Office		58
Lee, Pil-Jong	Senior Vice President	Technical Research Laboratories		53
Lee, Sang-Chun	Senior Vice President	Head of Public Relations Office		52
Kim, Dong-Yeong	Senior Vice President	Deputy Head of Works (Safety and Maintenance, Pohang Works)		56
Kim, Ki-Soo	Senior Vice President	Head of Engineering Solution Office		53
Choi, In-Yong	Senior Vice President	Technology and Investment Division		57
Choi, Yong-Jun	Senior Vice President	Deputy Head of Works (Hot and Cold Rolling, Pohang Works)		53
Ahn, Yoon-Gih	Senior Vice President	Head of Energy and Environment Business Office		51
Song, Yong-Sam	Senior Vice President	Head of Electrical and Electronic Materials Marketing Office		55
Lee, Yu-Kyung	Senior Vice President	Head of Plant, Equipment and Materials Procurement Office		50
Lee, Hee-Geun	Senior Vice President	Deputy Head of Works (Iron and Steel Making, Pohang Works)		55
Bae, Chul-Min	Senior Vice President	Head of Pohang Research Lab		57
An, Geun-Sik	Senior Vice President	Steel Business Division		57
Han, Hyung-Chul	Senior Vice President	Deputy Head of Works (Administration, Pohang Works)		54
Kim, Jin-Ho	Senior Vice President	Head of Construction Steel Materials Marketing Office		56
Nam, Jae-Bok	Senior Vice President	Steel Business Division		56
Hong, Sam-Young	Senior Vice President	Deputy Head of Works (Hot and Cold Rolling, Gwangyang Works)		57
Lee, Sang-Ho	Senior Vice President	Steel Production Division		53
Kim, Sang-Gyun	Senior Vice President	Head of Wire Rod Marketing Office		54
Suh, In-Shik	Senior Vice President	Technical Research Laboratories		55
Lee, Baik-Hee	Senior Vice President	Deputy Head of Works (Iron and Steel Making, Gwangyang Works)		53
Lee, Jae-Young	Senior Vice President	Technology and Investment Division		55

Item 6.B. Compensation

Compensation of Directors and Officers

Salaries and bonuses for Inside Directors and salaries for Outside Directors are paid in accordance with standards decided by the board of directors within the limitation of directors remuneration approved by the annual general meeting of shareholders. In addition, executive officers’ compensation is paid in accordance with standards decided by the board of directors. In 2017, the aggregate compensation paid and accrued to all Directors and executive officers was approximately Won 66 billion and the aggregate amount set aside or accrued by us to provide pension and retirement benefits to such persons was Won 15 billion.

The compensation of our directors and executive officers who received total annual compensation exceeding Won 500 million in 2017 were as follows:

Name	Position	Total Compensation in 2017		Long-term Incentive Compensation for Payment Subsequent to 2017
				(In millions of Won)
Kwon, Oh-Joon	Chief Executive Officer and Representative Director	￦	2,473	￦759
Oh, In-Hwan	President and Representative Director	￦	1,461	￦343
Choi, Jeong-Woo	Former President and Representative Director	￦	1,291	￦179

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Name	Position	Total Compensation in 2017		Long-term Incentive Compensation for Payment Subsequent to 2017
				(In millions of Won)
Chang, In-Hwa	President and Representative Director	￦	868	—
Yu, Seong	Senior Executive Vice President	￦	862	—
Kim, Jin-Il	Former President and Representative Director	￦	1,453	W 627

We have also granted stock options to some of our Directors and executive officers. See “— Item 6.E. Share Ownership” for a list of stock options granted to our Directors and executive officers. At the annual shareholders’ meeting held in February 2006 our shareholders elected to terminate the stock option program. Stock options granted prior to this meeting remain valid and outstanding pursuant to the articles of incorporation in effect at the time of the issuance of the stock option.

Item 6.C. Board Practices

Director Candidate Recommendation and Management Committee

The Director Candidate Recommendation and Management Committee is composed of three Outside Directors, Bahk, Byong-Won, Kim, Joo-Hyun, and Chang, Seung-Wha, and one Inside Director, Chon, Jung-Son. The Director Candidate Recommendation and Management Committee reviews the qualifications of potential candidates and proposes nominees to serve on our board of directors as an Outside Director. It also reviews operational matters of our board of directors. Any shareholder holding our outstanding shares with voting rights may suggest candidates for Outside Directors to the Director Candidate Recommendation and Management Committee.

Evaluation and Compensation Committee

The Evaluation and Compensation Committee is composed of four Outside Directors, Lee, Moung-Woo, Kim, Shin-Bae, Chung, Moon-Ki and Kim, Sung-Jin. The Evaluation and Compensation Committee’s primary responsibilities include establishing evaluation procedures and compensation plans for executive officers and taking necessary measures to execute such plans.

Finance and Related Party Transactions Committee

The Finance and Related Party Transactions Committee is composed of three Outside Directors, Lee, Myoung-Woo, Kim, Shin-Bae, Kim, Sung-Jin and one Inside Director, Oh, In-Hwan. This committee is an operational committee that oversees decisions with respect to finance and operational matters, including making assessments with respect to potential capital investments and evaluating prospective capital-raising activities. It also reviews related party and other internal transactions and ensures compliance with the Monopoly Regulation and Fair Trade Act.

Executive Management Committee

The Executive Management Committee is composed of five Inside Directors, Kwon, Oh-Joon, Oh, In-Hwan, Chang, In-Hwa Yu, Seong and Chon, Jung-Son. This committee oversees decisions with respect to our operational and management matters, including review of management’s proposals of new strategic initiatives, as well as deliberation over critical internal matters related to organization structure and development of personnel.

Audit Committee

Under Korean law and our articles of incorporation, we are required to have an Audit Committee. The Audit Committee may be composed of three or more directors; all members of the

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Audit Committee must be Outside Directors. Audit Committee members must also meet the applicable independence criteria set forth under the rules and regulations of the Sarbanes-Oxley Act of 2002. Members of the Audit Committee are elected by the shareholders at the ordinary general meeting of shareholders. We currently have an Audit Committee composed of three Outside Directors. Members of our Audit Committee are Bahk, Byong-Won, Chang, Seung-Wha and Chung, Moon-Ki.

The duties of the Audit Committee include:

• engaging independent auditors;

• approving independent audit fees;

• approving audit and non-audit services;

• reviewing annual financial statements;

• reviewing audit results and reports, including management comments and recommendations;

• reviewing our system of controls and policies, including those covering conflicts of interest and business ethics; and

• examining improprieties or suspected improprieties.

In addition, in connection with general meetings of stockholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors at each general meeting of stockholders. Our internal and external auditors report directly to the Audit Committee. The committee holds regular meetings at least once each quarter, and more frequently as needed.

Item 6.D. Employees

As of December 31, 2017, we had 32,287 employees, including 15,232 persons employed by our subsidiaries. Of the total number of employees, approximately 80% are technicians and skilled laborers and 20% are administrative staff. We use subcontractors for maintenance, cleaning and transport activities. We had 31,768 employees, including 15,184 persons employed by our subsidiaries, as of December 31, 2016, and 37,327 employees, including 17,282 persons employed by our subsidiaries, as of December 31, 2015.

We consider our relations with our work force to be good. We have never experienced a work stoppage or strike. Wages of our employees are among the highest of manufacturing companies in Korea. In addition to a base monthly wage, employees receive periodic bonuses and allowances. Base wages are determined annually following consultation between the management and employee representatives, who are currently elected outside the framework of the POSCO labor union. A labor union was formed by our employees in June 1988. As of December 31, 2017, 10 of our employees were members of the POSCO labor union.

In accordance with the National Pension Act of Korea, we contribute an amount equal to 4.5% of an employee’s standard monthly wages, and each employee contributes 4.5% of his or her standard monthly wages, into his or her personal pension account. Our employees, including executive officers as well as non-executive employees, are subject to a pension insurance system, under which we make monthly contributions to the pension accounts of the employees, and upon retirement, such employees are paid from their pension accounts. Prior to 2011, our executive and non-executive employees were subject to a lump-sum severance payment system, under which they were entitled to receive a lump-sum severance payment upon termination of their employment, based on their length of service and salary level at the time of termination. Starting in 2011, in accordance with the Korean Employee Retirement Income Security Act, we replaced such lump-sum severance payment system with our

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current pension insurance system in the form of either a defined benefit plan or a defined contribution plan. Our employees have the option of choosing either the defined benefit plan or the defined contribution plan. See Note 21 of Notes to Consolidated Financial Statements. Lump-sum severance amounts previously accrued prior to our adoption of the current pension insurance system continue to remain payable. We also provide a wide range of fringe benefits to our employees, including housing, housing loans, company-provided hospitals and schools, a company-sponsored pension program, an employee welfare fund, industrial disaster insurance, and cultural and athletic facilities.

As of December 31, 2017, our employees owned, through our employee stock ownership association, approximately 1.72% of our common stock in their employee accounts.

Item 6.E.  Share Ownership

Common Stock

The persons who are currently our Directors or executive officers held, as a group, 18,593 common shares as of March 31, 2018, the most recent practicable date for which this information is available. The table below shows the ownership of our common shares by our Directors and executive officers.

Name	Number of Common Shares
Kwon, Oh-Joon		2,448
Noh, Min-Yong		768
Kim, Hag-Dong		697
Oh, In-Hwan		690
Yu, Seong		666
Park, Yong-Kyu		611
Kim, Sun-Koo		595
Lee, Ki-Ho		574
Chang, In-Hwa		531
Kwak Jeong-Shik		530
Kim, Soon-Ki		528
Choi, Joo		527
Jung, Hae-Seong		450
Jeong, Tak		403
Yoo, Byeong-Og		401
Kim, Jhi-Yong		385
Lee, Yu-Kyung		337
Kim, Gyo-Sung		321
Lee, Pil-Jong		315
Yi, Sang-Ho		312
Lee, Jong-Sub		303
Lee, Eun-Seok		301
Kim, Min-Chul		297
Won, Hyung-Il		288
Kim, Dong-Ho		287
Lee, Duk-Lak		275
Oh, Hyoung-Soo		273
Chon, Jung-Son		262
Cho, Il-Hyun		236
Kim, Gwang-Soo		235
Min, Jung-Ki		226
Park, Hyeon		225
Lee, Sang-Hyeon		220
Lim, Seung-Kyu		220
Choo, Se-Don		217
Bae, Chul-Min		210
Yang, Weon-Jun		204
An, Geun-Sik		190
Kim, Jong-Sang		176

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Name	Number of Common Shares
Kim, Jeoung-Su		158
Lee, Si-Woo		156
Kim, Bok-Tae		149
Suh, In-Shik		140
Chun, Sung-Lae		138
Chun, Myung-Sik		128
Bae, Jae-Tak		126
Han, Sung-Hee		124
Yun, Yang-Su		112
Hwangbo, Won		107
Lee, Jeon-Hyeok		89
Kim, Ki-Soo		77
Kim, Sang-Gyun		76
Song, Yong-Sam Lee, Jae-Young		60 36
Choi, Yong-Jun		27
Choi, Hyeon-Soo		25
Choi, In-Yong		25
Lee, Sang-Chun		25
Han, Hyung-Chul		18
Jung, Kyu-Jin		18
Yoon, Duk-Il		16
Lee, Baik-Hee		14
Kim, Dong-Yeong		11
Lee, Sang-Ho		4
Total		18,593

Stock Options

With respect to the options granted, we may elect either to issue shares of common stock, distribute treasury stock or to pay in cash the difference between the exercise and the market price at the date of exercise. The options may be exercised by a person who has continued employment with POSCO for two or more years from the date on which the options are granted. Expiration date of options is seven years from the date on which the options are granted. All of the stock options below relate to our common stock.

At the annual shareholders’ meeting held in February 2006, our shareholders elected to terminate the stock option program. Stock options granted prior to this meeting remain valid and outstanding pursuant to the articles of incorporation in effect at the time of the issuance of the stock option. Currently, there are no outstanding exercisable stock options. The following table sets forth information regarding the stock options we have granted to our current Directors and executive officers.

Exercise Period

Director

Grant Date

From

To

Exercise Price

Granted Options

Exercised Options

Exercisable Options

Kwon, Oh-Joon

April 26, 2003

4/27/2005

4/26/2010

102,900

9,604

9,604

0

Kim, Jin-II

April 25, 2003

4/27/2005

4/26/2010

102,900

9,604

9,604

0

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Item 7.  Major Shareholders and Related Party Transactions

Item 7.A.  Major Shareholders

The following table sets forth certain information relating to the shareholders of our common stock issued as of December 31, 2017.

Shareholders	Number of Shares Owned		Percentage
National Pension Service		9,660,885		11.08	%
Nippon Steel & Sumitomo Metal Corporation (1)		2,894,712		3.32
BlackRock Institutional Trust Company, N.A.		2,483,875		2.85
Government of Singapore Investment Corp. Private Limited		1,934,312		2.22
KB Financial Group Inc. and subsidiaries		1,919,361		2.20
Directors and executive officers as a group		18,593		0.02
Public (2)		61,087,866		70.07
POSCO (held in the form of treasury stock)		7,187,231		8.24
Total issued shares of common stock		87,186,835		100.00	%

(1) Held in the form of ADRs.

(2) Includes ADRs.

As of December 31, 2017, there were 9,210,073 shares of common stock outstanding in the form of ADRs, representing 10.6% of the total issued shares of common stock.

Item 7.B.  Related Party Transactions

We have issued guarantees in favor of affiliated and related companies, and we have also engaged in various transactions with our subsidiaries and affiliated companies. See Notes 37 and 38 of Notes to Consolidated Financial Statements.

As of December 31, 2015, 2016 and 2017, we had no loans outstanding to our executive officers and Directors.

Item 7.C.  Interests of Experts and Counsel

Not applicable

Item 8.  Financial Information

Item 8.A.  Consolidated Statements and Other Financial Information

See “Item 18. Financial Statements” and pages F-1 through F-125.

Legal Proceedings

As a steel producer with global sales and operations, we are involved in trade remedy proceedings in markets worldwide, including in the United States. We proactively participate in and plan for such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, all such cases have been product and market-specific, and thus have been limited in scope relative to our global sales and operations. We continue to carefully monitor developments with respect to trade remedy policy in all markets in which we participate and, where necessary, vigorously defend our rights through litigation before tribunals such as the U.S. Court of International Trade. Our products that are subject to anti-dumping, safeguard or countervailing duty

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proceedings in the aggregate currently do not account for a material portion of our total sales, and such proceedings have not had a material adverse impact on our business and operations in recent years. However, there can be no assurance that increases in, or new impositions of, anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs on our exports of products abroad may not have a material adverse impact on our exports in the future. See “Item 4. Information on the Company — Item 4.B. Business Overview — Markets — Exports.”

In 2012, the Korea Fair Trade Commission imposed a total fine of Won 108.6 billion on us and POSCO Coated & Color Steel Co., Ltd. (“POSCO Coated & Color Steel”), our consolidated subsidiary, for alleged antitrust violations in Korea relating to galvanized steel sheets and color sheets. Subsequent to paying such fines, we and POSCO Coated & Color Steel each filed for judicial review of such fines in the Seoul High Court in February 2013. In July 2015, the Seoul High Court ruled in our favor for reimbursement of the fine of Won 89.3 billion imposed on us, which was subsequently appealed by the Korea Fair Trade Commission to the Supreme Court of Korea. The Supreme Court of Korea subsequently remanded the proceeding to the Seoul High Court in November 2016, which outcome is currently pending. We intend to continue to vigorously defend against such administrative action. In January 2016, the Seoul High Court ruled against POSCO Coated & Color Steel with respect to the fine of Won 19.3 billion imposed against it. POSCO Coated & Color Steel appealed with respect to Won 3.0 billion of such fine, which it lost in November 2016.

In May 2002, Industrial Development Bank of India brought a suit against Daewoo International Corporation (currently, POSCO Daewoo), Daewoo Motors India Ltd., Daewoo Corporation and Daewoo Construction & Engineering Co., Ltd. in the India Delhi Mumbai Court, regarding its loans to Daewoo Motors India Ltd. guaranteed by Daewoo Co., Ltd. (predecessor of POSCO Daewoo). The total claim amount is Won 77 billion, and POSCO Daewoo recorded provision of Won 20 billion relating to its portion of the guarantee alleged by Industrial Development bank of India. Daewoo International Corporation challenged the jurisdiction of the court in 2003. The outcome of such lawsuits remains uncertain and POSCO Daewoo’s provision is classified as a non-current liability as of December 31, 2017.

Except as described above, we are not involved in any pending or threatened legal or arbitration proceedings that may have, or have had during the last 12 months, a material adverse effect on our results of operations or financial position.

Dividends

The amount of dividends paid on our common stock is subject to approval at the annual general meeting of shareholders, which is typically held in February or March of the following year. In addition to our annual dividends, our board of directors is authorized to declare and distribute quarterly dividends under our articles of incorporation. If we decide to pay quarterly dividends, our articles of incorporation authorize us to pay them in cash to the shareholders of record as of the end of March, June and September of the relevant fiscal year. We may pay cash dividends out of retained earnings that have not been appropriated to statutory reserves.

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The table below sets out the annual dividends declared on the outstanding common stock to shareholders of record on December 31 of the years indicated and the interim dividends (including quarterly dividends starting in the second half of 2016), declared on the outstanding common stock to applicable shareholders of record of the years indicated. A total of 87,186,835 shares of common stock were issued as of December 31, 2017. Of these shares and as of such date, 79,999,604 shares were outstanding and 7,187,231 shares were held by us in treasury. The annual dividends set out for each of the years below were paid in the immediately following year.

Year	Annual Dividend per Common Stock to Public	Interim Dividend per Common Stock	Average Total Dividend per Common Stock
	(In Won)
2013	6,000	2,000		8,000
2014	6,000	2,000		8,000
2015	6,000	2,000		8,000
2016	5,750	2,250		8,000
2017	3,500	4,500		8,000

Owners of the ADSs are entitled to receive any dividends payable in respect of the underlying shares of common stock.

Historically, we have paid to holders of record of our common stock an annual dividend. However, we can give no assurance that we will continue to declare and pay any dividends in the future.

Item 8.B. Significant Changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our Consolidated Financial Statements included in this annual report.

Item 9. The Offer and Listing

Item 9.A. Offer and Listing Details

Market Price Information

Notes

Not applicable

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Common Stock

The principal trading market for our common stock is the KRX KOSPI Market. Our common stock, which is in registered form and has a par value of Won 5,000 per share, has been listed on the KRX KOSPI Market since June 1988 under the identifying code 005490. The table below shows the high and low trading prices and the average daily volume of trading activity on the KRX KOSPI Market for our common stock.

	Price				Average Daily Trading Volume
	High		Low
	(In Won)				(Number of Shares)
2013
First Quarter		371,000		321,500		169,232
Second Quarter		326,000		292,500		182,277
Third Quarter		340,000		292,500		225,474
Fourth Quarter		338,000		307,500		183,055
2014
First Quarter		322,000		272,500		222,494
Second Quarter		317,000		285,500		170,778
Third Quarter		361,000		291,500		201,548
Fourth Quarter		321,500		275,500		191,916
2015
First Quarter		290,500		242,500		211,737
Second Quarter		269,000		214,500		256,415
Third Quarter		229,000		168,500		285,052
Fourth Quarter		193,000		162,000		380,436
2016
First Quarter		222,000		156,000		394,379
Second Quarter		249,000		194,000		403,338
Third Quarter		238,500		200,500		288,876
Fourth Quarter		282,500		226,000		371,851
2017
First Quarter		296,500		244,000		321,295
Second Quarter		287,500		261,500		271,203
Third Quarter		345,000		291,000		233,349
Fourth Quarter		345,000		307,500		243,542
October		344,000		313,000		249,145
November		335,000		307,500		253,629
December		345,000		326,000		227,144
2018
First Quarter		395,000		321,500		241,496
January		395,000		339,000		236,977
February		395,000		352,000		217,743
March		358,000		321,500		266,589
Second Quarter (through April 26)		359,000		313,000		238,002
April (through April 26)		359,000		313,000		238,002

ADSs

Our common stock is also listed on the New York Stock Exchange in the form of ADSs. The ADSs have been issued by Citibank, N.A. as ADR depositary and are listed on the New York Stock Exchange under the symbol “PKX.” One ADS represents one-fourth of one share of common stock. As of December 31, 2017, 36,840,292 ADSs representing 9,210,073 common shares were outstanding, representing 10.6% of total issued shares of common stock.

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The table below shows the high and low trading prices and the average daily volume of trading activity on the New York Stock Exchange for our ADSs.

	Price				Average Daily Trading Volume
	High		Low
	(In US$)				(Number of ADSs)
2013
First Quarter		86.69		72.41		258,130
Second Quarter		74.82		63.23		252,261
Third Quarter		78.75		64.29		186,347
Fourth Quarter		80.40		72.19		177,415
2014
First Quarter		75.88		64.03		298,320
Second Quarter		76.56		69.60		223,292
Third Quarter		86.37		71.97		232,861
Fourth Quarter		75.11		63.61		361,829
2015
First Quarter		66.00		54.66		305,147
Second Quarter		61.95		48.17		279,028
Third Quarter		51.03		34.48		475,594
Fourth Quarter		42.62		33.73		455,010
2016
First Quarter		47.61		32.26		388,580
Second Quarter		54.85		41.06		412,522
Third Quarter		53.97		42.98		297,820
Fourth Quarter		59.54		49.95		326,351
2017
First Quarter		66.45		50.60		328,362
Second Quarter		63.44		56.58		279,798
Third Quarter		77.62		64.12		220,556
Fourth Quarter		79.20		69.47		164,596
October		75.41		69.47		177,025
November		75.69		70.14		157,742
December		79.20		75.59		158,122
2018
First Quarter		92.78		74.27		247,054
January		92.78		82.35		289,208
February		90.69		79.77		245,073
March		82.72		74.27		206,693
Second Quarter (through April 26)		83.12		73.05		191,012
April (through April 26)		83.12		73.05		191,012

Item 9.B. Plan of Distribution

Not applicable

Item 9.C. Markets

The Korean Securities Market

On January 27, 2005, the Korea Exchange was established pursuant to the Korea Securities and Futures Exchange Act by consolidating the Korea Stock Exchange, the Korea Futures Exchange, the KOSDAQ Stock Market, Inc., or the KOSDAQ, and the KOSDAQ Committee of the Korea Securities Dealers Association, which had formerly managed the KOSDAQ. There are three different markets operated by the Korea Exchange: the KRX KOSPI Market, the KRX KOSDAQ Market, and the KRX Derivatives Market. The Korea Exchange has two trading floors located in Seoul, one for the KRX KOSPI Market and one for the KRX KOSDAQ Market, and one trading floor in Busan for the KRX Derivatives Market. The Korea Exchange is a limited liability company, the shares of which are held by (i) investment brokers and investment dealers that were formerly members of the Korea Futures

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Exchange or the Korea Stock Exchange and (ii) the stockholders of the KOSDAQ. Currently, the Korea Exchange is the only stock exchange in Korea and is operated by membership, having as its members most of the Korean investment brokers and investment dealers and some Korean branches of foreign investment brokers and investment dealers.

According to data published by the Korea Exchange, as of December 31, 2017, the aggregate market value of equity securities listed on the KRX KOSPI Market and the KRX KOSDAQ Market was approximately Won 1,889 trillion, and the average daily trading volume of equity securities for 2017 was approximately 1,076 million shares with an average transaction value of Won 9,014 billion. The Korea Exchange has the power in some circumstances to suspend trading in the shares of a given company or to de-list a security pursuant to the Regulation on Listing on the Korea Exchange. The Korea Exchange also restricts share price movements. All listed companies are required to file accounting reports annually, semi-annually and quarterly and to release immediately all information that may affect trading in a security.

The Government has in the past exerted, and continues to exert, substantial influence over many aspects of the private sector business community that can have the intention or effect of depressing or boosting the market. In the past, the Government has informally both encouraged and restricted the declaration and payment of dividends, induced mergers to reduce what it considers excess capacity in a particular industry and induced private companies to offer publicly their securities.

The Korea Exchange publishes the Korea Composite Stock Price Index, or KOSPI, every ten seconds, which is an index of all equity securities listed on the Korea Exchange. On January 1, 1983, the method of computing KOSPI was changed from the Dow Jones method to the aggregate value method. In the new method, the market capitalizations of all listed companies are aggregated, subject to certain adjustments, and this aggregate is expressed as a percentage of the aggregate market capitalization of all listed companies as of the base date, January 4, 1980.

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Movements in KOSPI are set out in the following table.

Year	Opening		High		Low		Closing
1986		161.40		279.67		153.85		272.61
1987		264.82		525.11		264.82		525.11
1988		532.04		922.56		527.89		907.20
1989		919.61		1,007.77		844.75		909.72
1990		908.59		928.82		566.27		696.11
1991		679.75		763.10		586.51		610.92
1992		624.23		691.48		459.07		678.44
1993		697.41		874.10		605.93		866.18
1994		879.32		1,138.75		855.37		1,027.37
1995		1,027.45		1,016.77		847.09		882.94
1996		882.29		986.84		651.22		651.22
1997		647.67		792.29		350.68		376.31
1998		374.41		579.86		280.00		562.46
1999		565.10		1,028.07		498.42		1,028.07
2000		1,028.33		1,059.04		500.60		504.62
2001		503.31		704.50		468.76		693.70
2002		698.00		937.61		584.04		627.55
2003		633.03		822.16		515.24		810.71
2004		821.26		936.06		719.59		895.92
2005		896.00		1,379.37		870.84		1,379.37
2006		1,383.32		1,464.70		1,203.86		1,434.46
2007		1,438.89		2,015.48		1,345.08		1,897.13
2008		1,891.45		1,888.88		938.75		1,124.47
2009		1,132.87		1,718.88		1,018.81		1,682.77
2010		1,681.71		2,052.97		1,552.79		2,051.00
2011		2,063.69		2,231.47		1,644.11		1,825.12
2012		1,831.69		2,057.28		1,758.99		1,997.05
2013		2,031.10		2,059.58		1,780.63		2,011.34
2014		2,013.11		2,093.08		1,881.73		1,915.19
2015		1,926.44		2,173.41		1,829.81		1,961.31
2016		1,918.76		2,068.72		1,835.28		2,026.46
2017		2,026.16		2,557.97		2,026.16		2,467.49
2018 (through April 26)		2,479.65		2,598.19		2,363.77		2,475.64

Source: The KRX KOSPI Market

Shares are quoted “ex-dividend” on the first trading day of the relevant company’s accounting period. Since the calendar year is the accounting period for the majority of listed companies, this may account for the drop in KOSPI between its closing level at the end of one calendar year and its opening level at the beginning of the following calendar year.

With certain exceptions, principally to take account of a share being quoted “ex-dividend” and “ex-rights,” permitted upward and downward movements in share prices of any category of shares on any day are limited under the rules of the Korea Exchange to 30% of the previous day’s closing price of the shares, rounded down as set out below:

Previous Day’s Closing Price (Won)	Rounded Down to (Won)
Less than 1,000		1
1,000 to less than 5,000		5
5,000 to less than 10,000		10
10,000 to less than 50,000		50
50,000 to less than 100,000		100
100,000 to less than 500,000		500
500,000 or more		1,000

As a consequence, if a particular closing price is the same as the price set by the fluctuation limit, the closing price may not reflect the price at which persons would have been prepared, or would

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be prepared to continue, if so permitted, to buy and sell shares. Orders are executed on an auction system with priority rules to deal with competing bids and offers.

Due to deregulation of restrictions on brokerage commission rates, the brokerage commission rate on equity securities transactions may be determined by the parties, subject to commission schedules being filed with the Korea Exchange by the financial investment companies with a brokerage license. In addition, a securities transaction tax of 0.5% of the sales price will generally be imposed on the transfer of shares or certain securities representing rights to subscribe for shares if traded on the KRX KOSPI Market. An agricultural and fishery special surtax of 0.15% of the sales prices will also be imposed on transfer of these shares and securities on the Korea Exchange. See “Item 10. Additional Information — Item 10.E. Taxation — Korean Taxation.”

The number of companies listed on the KRX KOSPI Market, the corresponding total market capitalization at the end of the periods indicated and the average daily trading volume for those periods are set forth in the following table:

	Market Capitalization on the Last Day of Each Period				Average Daily Trading Volume, Value
Year	Number of Listed Companies		(Billions of Won)		Thousands of Shares		(Millions of Won)
1986		355	￦	11,994		31,755	￦	32,870
1987		389		26,172		20,353		70,185
1988		502		64,544		10,367		198,364
1989		626		95,477		11,757		280,967
1990		669		79,020		10,866		183,692
1991		686		73,118		14,022		214,263
1992		688		84,712		24,028		308,246
1993		693		112,665		35,130		574,048
1994		699		151,217		36,862		776,257
1995		721		141,151		26,130		487,762
1996		760		117,370		26,571		486,834
1997		776		70,989		41,525		555,759
1998		748		137,799		97,716		660,429
1999		725		349,504		278,551		3,481,620
2000		704		188,042		306,163		2,602,211
2001		689		255,850		473,241		1,997,420
2002		683		258,681		857,245		3,041,598
2003		684		355,363		542,010		2,216,636
2004		683		412,588		372,895		2,232,109
2005		702		655,075		467,629		3,157,662
2006		731		704,588		279,096		3,435,180
2007		745		951,900		363,741		5,539,653
2008		763		576,888		352,599		3,211,039
2009		770		887,935		485,657		5,595,552
2010		777		1,141,885		380,859		5,619,768
2011		791		1,041,999		353,760		6,836,146
2012		930		1,154,294		486,479		4,823,642
2013		777		1,185,974		328,425		3,993,422
2014		773		1,192,253		278,081		3,983,580
2015		770		1,242,832		455,256		5,351,734
2016		779		1,308,440		376,773		4,523,044
2017		774		1,605,821		340,457		5,325,760
2018 (through April 26)		777		1,653,074		410,528		7,149,356

Source: The Korea Exchange

The Korean securities markets are principally regulated by the Financial Services Commission and under the regulations set forth in the FSCMA. In August 2007, the National Assembly of Korea enacted the FSCMA. The FSCMA, which came into effect on February 4, 2009, comprehensively

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regulates the Korean capital markets, the financial investment business (including collective investment businesses and trust businesses) and financial investment products (such as securities and derivatives). The FSCMA imposes restrictions on insider trading and price manipulation, requires specified information to be made available by listed companies to investors and establishes rules regarding margin trading, proxy solicitation, takeover bids, acquisition of treasury shares and reporting requirements for shareholders holding substantial interests. The FSCMA regulates the operation and monitoring of the securities and derivatives markets.

Protection of Customer’s Interest in Case of Insolvency of Investment Brokers or Investment Dealers

Under Korean law, the relationship between a customer and an investment broker or an investment dealer in connection with a securities sell or buy order is deemed to be a consignment and the securities acquired by a consignment agent (i.e., the investment broker or the investment dealer) through such sell or buy order are regarded as belonging to the customer in so far as the customer and the consignment agent’s creditors are concerned. Therefore, in the event of a bankruptcy or reorganization procedure involving an investment broker or an investment dealer, the customer of the investment broker or the investment dealer is entitled to the proceeds of the securities sold by the investment broker or the investment dealer.

When a customer places a sell order with an investment broker or an investment dealer that is not a member of the KRX KOSPI Market or the KRX KOSDAQ Market and this investment broker or investment dealer places a sell order with another investment broker or investment dealer that is a member of the KRX KOSPI Market or the KRX KOSDAQ Market, the customer is still entitled to the proceeds of the securities sold and received by the non-member company from the member company regardless of the bankruptcy or reorganization of the non-member company.

Under the FSCMA, the Korea Exchange is obliged to indemnify any loss or damage incurred by a counterparty as a result of a breach by members of the KRX KOSPI Market or the KRX KOSDAQ Market. If an investment broker or an investment dealer that is a member of the KRX KOSPI Market or the KRX KOSDAQ Market breaches its obligation in connection with a buy order, the Korea Exchange is obliged to pay the purchase price on behalf of the breaching member. Therefore, the customer can acquire the securities that have been ordered to be purchased by the breaching member.

When a customer places a buy order with a non-member company and the non-member company places a buy order with a member company, the customer has the legal right to the securities received by the non-member company from the member company because the purchased securities are regarded as belonging to the customer in so far as the customer and the non-member company’s creditors are concerned.

As the cash deposited with an investment broker or an investment dealer is regarded as belonging to the investment broker or investment dealer, which is liable to return the same at the request of its customer, the customer cannot take back deposited cash from the investment broker or the investment dealer if a bankruptcy or rehabilitation procedure is instituted against the investment broker or the investment dealer and, therefore, can suffer from loss or damage as a result. However, in case of the investment broker or the investment dealer’s bankruptcy, liquidation, cancellation of investment broker or investment dealer license or other insolvency events, the Depositor Protection Act provides that the Korea Deposit Insurance Corporation will, upon the request of the investors, pay each investor up to a total of Won 50 million, which shall represent both actual cash deposited and any interest accrued thereon. Pursuant to the FSCMA, as amended, investment brokers or investment dealers are required to deposit the cash received from its customers at the securities finance company established pursuant to the FSCMA. Set-off or attachment of cash deposits by investment brokers or investment dealers is prohibited. The premiums related to this insurance are paid by investment brokers or investment dealers.

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Clearance and Settlement

The settlement of trades on the Korea Exchange is required to be handled by a settlement agency of the Korea Exchange. The Korea Securities Depository is the institution commissioned by the Korea Exchange to handle all such settlement of trades. The settlement of trades on the Korea Exchange takes place through a clearance and settlement procedure. The Korea Exchange has adopted the multilateral netting system and carries out the clearance of the trades by netting the sales and purchases of each Korea Securities Depository participant. The Korea Exchange is required to provide the daily net settlement results of the trades to the Korea Securities Depository one business day after the day of the sale and purchase contract. The Korea Securities Depository then handles settlement of the securities and the funds based on the information received from the Korea Exchange. The securities are settled through book-entry changes in the accounts of Korea Securities Depository participants and the funds are settled by transfer to an account at a bank designated by the Korea Securities Depository. Settlement of trades is generally required to take place on the third day following the day of the sale and purchase contract.

Item 9.D.  Selling Shareholders

Not applicable

Item 9.E.  Dilution

Not applicable

Item 9.F.  Expenses of the Issuer

Not applicable

Item 10.   Additional Information

Item 10.A.  Share Capital

Currently, our authorized share capital is 200,000,000 shares, which consists of shares of common stock, par value Won 5,000 per share (“Common Shares”) and shares of non-voting stock, par value Won 5,000 per share (“Non-Voting Preferred Shares”). Our Non-Voting Preferred Shares have a preferential right to dividend payments. Common Shares and Non-Voting Preferred Shares together are referred to as “Shares.” Under our articles of incorporation, we are authorized to issue Non-Voting Preferred Shares up to the limit prescribed by applicable law, the aggregate of which currently is one-quarter of our total issued and outstanding capital stock. As of December 31, 2017, 87,186,835 Common Shares were issued, of which 7,187,231 shares were held by us in treasury. We have never issued any Non-Voting Preferred Shares. All of the issued and outstanding Common Shares are fully-paid and non-assessable and are in registered form. We issue share certificates in denominations of 1, 5, 10, 50, 100, 500, 1,000 and 10,000 shares.

Item 10.B.  Memorandum and Articles of Association

This section provides information relating to our capital stock, including brief summaries of material provisions of our articles of incorporation, the FSCMA, the Commercial Code and related laws, all as currently in effect. The following summaries are subject to, and are qualified in their entirety by reference to, our articles of incorporation and the applicable provisions of the FSCMA and the Commercial Code. We have filed copies of our articles of incorporation and these laws (except for the newly enacted the FSCMA) as exhibits to registration statements under the Securities Act or the Securities Exchange Act previously filed by us.

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Dividends

We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder. The Common Shares represented by the ADSs have the same dividend rights as other outstanding Common Shares.

Holders of Non-Voting Preferred Shares are entitled to receive dividends in priority to the holders of Common Shares in an amount not less than 9% of the par value of the Non-Voting Preferred Shares as determined by the board of directors at the time of their issuance. If the amount available for dividends is less than the aggregate amount of such minimum dividend, we do not have to declare dividends on the Non-Voting Preferred Shares.

We may declare dividends annually at the annual general meeting of shareholders which is held within three months after the end of the fiscal year. We pay the annual dividend shortly after the annual general meeting to the shareholders of record as of the end of the preceding fiscal year. We may distribute the annual dividend in cash, Shares or other form of property. However, a dividend of Shares must be distributed at par value. Dividends in Shares may not exceed one-half of the annual dividend. In addition, we may declare, and distribute in cash, interim dividends pursuant to a board resolution once a fiscal year to the eligible shareholders recorded as of the end of March, June and September of the relevant fiscal year. We have no obligation to pay any annual dividend unclaimed for five years from the payment date.

Under the Commercial Code, we may pay an annual dividend only to the extent the net asset amount in our balance sheets exceeds the sum of the following: (i) our stated capital, (ii) the total amount of our capital surplus reserve and earned surplus reserve accumulated up to the end of the relevant dividend period, (iii) the legal reserve to be set aside for annual dividend, and (iv) unrealized profits determined in the Presidential Decree to the Commercial Code. We may not pay an annual dividend unless we have set aside as earned surplus reserve an amount equal to at least 10% of the cash portion of the annual dividend or unless we have accumulated earned surplus reserve of not less than one-half of our stated capital. We may not use legal reserve to pay cash dividends but may transfer amounts from legal reserve to capital stock or use legal reserve to reduce an accumulated deficit.

Distribution of Free Shares

In addition to paying dividends in Shares out of our retained or current earnings, we may also distribute to our shareholders an amount transferred from our capital surplus or legal reserve to our stated capital in the form of free shares. We must distribute such free shares to all our shareholders in proportion to their existing shareholdings.

Preemptive Rights and Issuance of Additional Shares

We may issue authorized but unissued shares at the times and, unless otherwise provided in the Commercial Code, on the terms our board of directors may determine. All our shareholders are generally entitled to subscribe for any newly issued Shares in proportion to their existing shareholdings. We must offer new Shares on uniform terms to all shareholders who have preemptive rights and are listed on our shareholders’ register as of the relevant record date. Under the Commercial Code, we may vary, without shareholders’ approval, the terms of these preemptive rights for different classes of shares. We must give public notice of the preemptive rights regarding new Shares and their transferability at least two weeks before the relevant record date. Our board of directors may determine how to distribute Shares for which preemptive rights have not been exercised or where fractions of Shares occur.

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Under our articles of incorporation, we may issue new Shares pursuant to a board resolution to persons other than existing shareholders, who in these circumstances will not have preemptive rights, if the new Shares are:

• offered publicly or to underwriters for underwriting pursuant to the FSCMA;

• issued to members of our employee stock ownership association pursuant to the FSCMA;

• represented by depositary receipts pursuant to the FSCMA;

• issued in a general public offering pursuant to a board resolution in accordance with the FSCMA, the amount of which is no more than 10% of the outstanding Shares;

• issued to our creditors pursuant to a debt-equity swap;

• issued to domestic or foreign corporations pursuant to a joint venture agreement, strategic coalition or technology inducement agreement when deemed necessary for management purposes; or

• issued to domestic or foreign financial institutions when necessary for raising funds in emergency cases.

In addition, we may issue convertible bonds or bonds with warrants, each up to an aggregate principal amount of Won 2 trillion, to persons other than existing shareholders.

Members of our employee stock ownership association, whether or not they are our shareholders, generally have a preemptive right to subscribe for up to 20% of the Shares publicly offered pursuant to the FSCMA. This right is exercisable only to the extent that the total number of Shares so acquired and held by members of our employee stock ownership association does not exceed 20% of the total number of Shares then issued. As of December 31, 2017, our employees owned, through our employee stock ownership association, approximately 1.72% of our common stock in their employee accounts.

General Meeting of Shareholders

We hold the annual general meeting of shareholders within three months after the end of each fiscal year. The record date of the register of shareholders is December 31 of each year, and such shareholders listed on the register of shareholder as of the record date are entitled to exercise their right at the general meeting of shareholders. Subject to a board resolution or court approval, we may hold an extraordinary general meeting of shareholders:

• as necessary;

• at the request of holders of an aggregate of 3% or more of our outstanding Shares;

• at the request of shareholders holding an aggregate of 1.5% or more of our outstanding Shares for at least six months; or

• at the request of our audit committee.

Holders of Non-Voting Preferred Shares may request a general meeting of shareholders only after the Non-Voting Preferred Shares become entitled to vote or “enfranchised,” as described under “— Voting Rights” below.

We must give shareholders written notice or electronic document setting out the date, place and agenda of the meeting at least two weeks before the date of the general meeting of shareholders. However, for holders of 1% or less of the total number of issued and outstanding voting Shares, we may give notice by placing at least two public notices in at least two daily newspapers or by notices to

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be posted on the electronic disclosure database system maintained by the Financial Supervisory Service or the Korea Exchange at least two weeks in advance of the meeting. Currently, we use The Seoul Shinmun published in Seoul, The Maeil Shinmun published in Taegu and The Kwangju Ilbo published in Kwangju for this purpose. Shareholders not on the shareholders’ register as of the record date are not entitled to receive notice of the general meeting of shareholders or attend or vote at the meeting. Holders of Non-Voting Preferred Shares, unless enfranchised, are not entitled to receive notice of general meetings of shareholders, but may attend such meetings. Our general meetings of shareholders are held either in Pohang or Seoul.

Voting Rights

Holders of our Common Shares are entitled to one vote for each Common Share, except that voting rights of Common Shares held by us, or by a corporate shareholder that is more than 10% owned by us either directly or indirectly, may not be exercised. The Commercial Code permitted cumulative voting, under which voting method each shareholder would have multiple voting rights corresponding to the number of directors to be appointed in the voting and may exercise all voting rights cumulatively to elect one director.

Our shareholders may adopt resolutions at a general meeting by an affirmative majority vote of the voting Shares present or represented at the meeting, where the affirmative votes also represent at least one-fourth of our total voting Shares then issued and outstanding. However, under the Commercial Code and our articles of incorporation, the following matters, among others, require approval by the holders of at least two-thirds of the voting Shares present or represented at a meeting, where the affirmative votes also represent at least one-third of our total voting Shares then issued and outstanding:

• amending our articles of incorporation;

• removing a director;

• effecting any dissolution, merger or consolidation of us;

• transferring the whole or any significant part of our business;

• acquisition of all or a part of the business of any other company that may have a material impact on our business;

• issuing any new Shares at a price lower than their par value; or

• approving matters required to be approved at a general meeting of shareholders, which have material effects on our assets, as determined by the Board of Directors.

In general, holders of Non-Voting Preferred Shares are not entitled to vote on any resolution or receive notice of any general meeting of shareholders. However, in the case of amendments to our articles of incorporation, or any merger or consolidation of us, or in some other cases that affect the rights or interests of the Non-Voting Preferred Shares, approval of the holders of Non-Voting Preferred Shares is required. We may obtain the approval by a resolution of holders of at least two-thirds of the Non-Voting Preferred Shares present or represented at a class meeting of the holders of Non-Voting Preferred Shares, where the affirmative votes also represent at least one-third of our total issued and outstanding Non-Voting Preferred Shares.

Shareholders may exercise their voting rights by proxy. When a shareholder is a corporate entity, such shareholder may give proxies to its officers or directors.

Holders of ADRs exercise their voting rights through the ADR depositary, an agent of which is the record holder of the underlying Common Shares. Subject to the provisions of the deposit agreement, ADR holders are entitled to instruct the ADR depositary how to vote the Common Shares underlying their ADSs.

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Rights of Dissenting Shareholders

In some limited circumstances, including the transfer of the whole or any significant part of our business and our merger or consolidation with another company, dissenting shareholders have the right to require us to purchase their Shares. Only the shareholders who have executed a share purchase agreement evidencing their acquisition of the relevant Shares on or prior to the day immediately following the public disclosure of the board resolutions approving any of the aforementioned transactions have the rights to require us to purchase their Shares. To exercise this right, shareholders, including holders of Non-Voting Preferred Shares, must submit to us a written notice of their intention to dissent before the general meeting of shareholders. Within 20 days after the relevant resolution is passed at a meeting, the dissenting shareholders must request us in writing to purchase their Shares. We are obligated to purchase the Shares of dissenting shareholders within one month after the expiration of the 20-day period. The purchase price for the Shares is required to be determined through negotiation between the dissenting shareholders and us. If we cannot agree on a price through negotiation, the purchase price will be the average of (1) the weighted average of the daily Share prices on the Korea Exchange for the two-month period before the date of the adoption of the relevant board resolution, (2) the weighted average of the daily Share price on the Korea Exchange for the one month period before the date of the adoption of the relevant resolution and (3) the weighted average of the daily Share price on the Korea Exchange for the one week period before such date of the adoption of the relevant resolution. However, the court may determine this price if we or dissenting shareholders do not accept the purchase price. Holders of ADSs will not be able to exercise dissenter’s rights unless they have withdrawn the underlying common stock and become our direct shareholders.

Register of Shareholders and Record Dates

Our transfer agent, Kookmin Bank, maintains the register of our shareholders at its office in Seoul, Korea. It registers transfers of Shares on the register of shareholders on presentation of the Share certificates.

The record date for annual dividends is December 31. For the purpose of determining the shareholders entitled to annual dividends, the register of shareholders may be closed for the period from January 1 to January 15 of each year. Further, for the purpose of determining the shareholders entitled to some other rights pertaining to the Shares, we may, on at least two weeks’ public notice, set a record date and/or close the register of shareholders for not more than three months. The trading of Shares and the delivery of share certificates may continue while the register of shareholders is closed.

Annual Report

At least one week before the annual general meeting of shareholders, we must make our annual report and audited financial statements available for inspection at our principal office and at all of our branch offices. In addition, copies of annual reports, the audited financial statements and any resolutions adopted at the general meeting of shareholders will be available to our shareholders.

Under the FSCMA, we must file with the Financial Services Commission and the Korea Exchange (1) an annual business report within 90 days after the end of our fiscal year, (2) a half-year report within 45 days after the end of the first six months of our fiscal year, and (3) quarterly reports within 45 days after the end of the third month and the ninth month of our fiscal year. Copies of these reports are or will be available for public inspection at the Financial Services Commission and the Korea Exchange.

Transfer of Shares

Under the Commercial Code, the transfer of Shares is effected by delivery of share certificates. However, to assert shareholders’ rights against us, the transferee must have his name and address

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registered on our register of shareholders. For this purpose, a shareholder is required to file his name, address and seal with our transfer agent. A non-Korean shareholder may file a specimen signature in place of a seal, unless he is a citizen of a country with a sealing system similar to that of Korea. In addition, a non-resident shareholder must appoint an agent authorized to receive notices on his behalf in Korea and file a mailing address in Korea. The above requirements do not apply to the holders of ADSs.

Under current Korean regulations, the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a brokerage, dealing or collective investment license and internationally recognized custodians may act as agents and provide related services for foreign shareholders. Certain foreign exchange controls and securities regulations apply to the transfer of Shares by non-residents or non-Koreans. See “Item 10. Additional Information — Item 10.D. Exchange Controls.”

Our transfer agent is Kookmin Bank, located at 26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul, Korea.

Acquisition of Shares by Us

We may acquire our own Shares, subject to the approval by the general meeting of shareholders. In addition, we may acquire Shares through purchases on the Korea Exchange or through a tender offer or by acquiring the interests in a trust account holding our own Shares through agreements with trust companies and asset management companies. The aggregate purchase price for the Shares may not exceed the total amount available for distribution of dividends available at the end of the preceding fiscal year less the amount of dividends and mandatory reserves required to be set aside for that fiscal year, subject to certain procedural requirements.

In accordance with the Commercial Code, we may resell or transfer any Shares acquired by us to a third party, subject to the approval by the Board of Directors. In general, corporate entities in which we own more than 50% equity interest may not acquire our Shares. Under the FSCMA, we are subject to certain selling restrictions for the Shares acquired by us.

Liquidation Rights

In the event of our liquidation, after payment of all debts, liquidation expenses and taxes, our remaining assets will be distributed among shareholders in proportion to their shareholdings. Holders of Non-Voting Preferred Shares have no preference in liquidation.

Item 10.C. Material Contracts

None.

Item 10.D. Exchange Controls

Shares and ADSs

The Foreign Exchange Transaction Act and the Presidential Decree and regulations under that Act and Decree (collectively, “Foreign Exchange Transaction Laws”) and the Foreign Investment Promotion Law regulate investment in Korean securities by non-residents and issuance of securities outside Korea by Korean companies. Under the Foreign Exchange Transaction Laws, non-residents may invest in Korean securities subject to procedural requirements in accordance with these laws. The Financial Services Commission has also adopted, pursuant to its authority under the FSCMA, regulations that restrict investment by foreigners in Korean securities.

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Subject to certain limitations, the Ministry of Strategy and Finance has the authority to take the following actions under the Foreign Exchange Transaction Laws:

• if the Government deems it necessary on account of war, armed conflict, natural disaster or grave and sudden and significant changes in domestic or foreign economic circumstances or similar events or circumstances, the Ministry of Strategy and Finance may temporarily suspend performance under any or all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws apply (including suspension of payment and receipt of foreign exchange) or impose an obligation to deposit, safe-keep or sell any means of payment to The Bank of Korea, a foreign exchange stabilization fund, certain other governmental agencies or financial companies; and

• if the Government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between Korea and other countries is likely to adversely affect the Won, exchange rates or other macroeconomic policies, the Ministry of Strategy and Finance may take action to require any person who intends to effect a capital transaction to obtain permission or to require any person who effects a capital transaction to deposit a portion of the means of payment acquired in such transactions with The Bank of Korea, a foreign exchange stabilization fund, certain other governmental agencies or financial companies.

Government Review of Issuance of ADSs

In order for us to issue shares represented by ADSs, we are required to file a prior report of the issuance with our designated foreign exchange bank or the Ministry of Strategy and Finance, depending on the issuance amount. No further Korean governmental approval is necessary for the initial offering and issuance of the ADSs.

Under current Korean laws and regulations, the depositary bank is required to obtain our prior consent for the number of shares to be deposited in any given proposed deposit which exceeds the difference between (1) the aggregate number of shares deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent offerings of ADSs and stock dividends or other distributions related to these ADSs) and (2) the number of shares on deposit with the depositary bank at the time of such proposed deposit. We can give no assurance that we would grant our consent, if our consent is required.

Reporting Requirements for Holders of Substantial Interests

Under the FSCMA, any person whose direct or beneficial ownership of shares with voting rights, whether in the form of shares or ADSs, certificates representing the rights to subscribe for Shares and equity-related debt securities including convertible bonds and bonds with warrants (collectively, “Equity Securities”) together with the Equity Securities beneficially owned by certain related persons or by any person acting in concert with the person accounts for 5% or more of the total outstanding Equity Securities is required to report the status and the purpose (whether or not to exert an influence on management control over the issuer) of the holdings to the Financial Services Commission and the Korea Exchange within five business days after reaching the 5% ownership interest. In addition, any change in the purpose of holding such ownership interest or a change in the ownership interest subsequent to the report which equals or exceeds 1% of the total outstanding Equity Securities is required to be reported to the Financial Services Commission and the Korea Exchange within five business days from the date of the change. However, the reporting deadline of such reporting requirement is extended to the tenth day of the month immediately following the month of such change in their shareholding for (1) certain professional investors, as specified under the FSCMA, or (2) persons who hold shares for purposes other than management control. Those who report the purpose of shareholding as management control of the issuer are prohibited from exercising their voting rights and acquiring additional shares for five days subsequent to their report under the FSCMA.

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Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment and may result in a loss of voting rights with respect to the ownership of Equity Securities exceeding 5%. Furthermore, the Financial Services Commission may issue an order to dispose of non-reported Equity Securities.

In addition to the reporting requirements described above, any person whose direct or beneficial ownership of a company’s shares accounts for 10% or more of the total issued and outstanding shares with voting rights (a “major stockholder”) must report the status of his or her shareholding to the Securities and Futures Commission and the Korea Exchange within five business days after he or she becomes a major stockholder. In addition, any change in the ownership interest subsequent to the report must be reported to the Securities and Futures Commission and the Korea Exchange by the fifth business day of any changes in his or her shareholding. Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment.

Under the KRX regulations, if a company listed on the KRX KOSPI Market has submitted public disclosure of material matters to a foreign financial investment supervisory authority pursuant to the laws of the foreign jurisdiction, then it must submit a copy of the public disclosure and a Korean translation thereof to the Korea Exchange. In addition, if a company listed on the KRX KOSPI Market is approved for listing on a foreign stock exchange or determined to be de-listed from the foreign stock exchange or actually lists on, or de-lists from, a foreign stock exchange, then it must submit to the Korea Exchange a copy, together with a Korean translation thereof, of all documents submitted to, or received from, the relevant foreign government, supervisory authority or stock exchange.

Restrictions Applicable to ADSs

No Korean governmental approval is necessary for the sale and purchase of ADSs in the secondary market outside Korea or for the withdrawal of shares underlying ADSs and the delivery inside Korea of shares in connection with the withdrawal, provided that a foreigner who intends to acquire the shares must obtain an investment registration card from the Financial Supervisory Service as described below. The acquisition of the shares by a foreigner must be immediately reported by the foreigner or his standing proxy in Korea to the Governor of the Financial Supervisory Service (“Governor”).

Persons who have acquired shares as a result of the withdrawal of shares underlying the ADSs may exercise their preemptive rights for new shares, participate in free distributions and receive dividends on shares without any further governmental approval.

In addition, under the Financial Services Commission regulations, effective as of November 30, 2006, we are required to file a securities registration statement with the Financial Services Commission and such securities registration statement has to become effective pursuant to the FSCMA in order for us to issue shares represented by ADSs, except in certain limited circumstances.

Restrictions Applicable to Shares

Under the Foreign Exchange Transaction Laws and the Financial Services Commission regulations (together, the “Investment Rules”), foreigners may invest, with limited exceptions and subject to procedural requirements, in all shares of Korean companies, whether listed on the KRX KOSPI Market or the KRX KOSDAQ Market, unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in limited circumstances, including, among others:

• odd-lot trading of shares;

• acquisition of shares (“Converted Shares”) by exercise of warrant, conversion right under convertible bonds or withdrawal right under depositary receipts issued outside of Korea by a Korean company;

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• acquisition of shares as a result of inheritance, donation, bequest or exercise of shareholders’ rights, including preemptive rights or rights to participate in free distributions and receive dividends;

• over-the-counter transactions between foreigners of a class of shares for which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or exceeded with certain exceptions;

• shares acquired by direct investment as defined in the Foreign Investment Promotion Law;

• disposal of shares pursuant to the exercise of appraisal rights of dissenting shareholders;

• disposal of shares in connection with a tender offer;

• acquisition of shares by a foreign depositary in connection with the issuance of depositary receipts;

• acquisition and disposal of shares through overseas stock exchange market if such shares are simultaneously listed on the KRX KOSPI Market or the KRX KOSDAQ Market and such overseas stock exchange; and

• arm’s length transactions between foreigners, if all of such foreigners belong to an investment group managed by the same person.

The Investment Rules require a foreign investor who wishes to invest in shares for the first time on the Korea Exchange (including Converted Shares) to register its identity with the Financial Supervisory Service prior to making any such investment; however, the registration requirement does not apply to foreign investors who acquire Converted Shares with the intention of selling such Converted Shares within three months from the date of acquisition of the Converted Shares or who acquire the shares in an over-the-counter transaction or dispose of shares where such acquisition or disposal is deemed to be a foreign direct investment pursuant to the Foreign Investment Promotion Law. Upon registration, the Financial Supervisory Service will issue to the foreign investor an investment registration card which must be presented each time the foreign investor opens a brokerage account with a financial investment company with a brokerage license or dealing license in Korea. Foreigners eligible to obtain an investment registration card include foreign nationals who are individuals residing abroad for more than six months, foreign governments, foreign municipal authorities, foreign public institutions, international financial institutions or similar international organizations, corporations incorporated under foreign laws and any person in any additional category designated by the Enforcement Decree to the FSCMA. All Korean offices of a foreign corporation as a group are treated as a separate foreigner from the offices of the corporation outside Korea. However, a foreign corporation or depositary issuing depositary receipts may obtain one or more investment registration cards in its name in certain circumstances as described in the relevant regulations.

Upon a foreign investor’s purchase of shares through the Korea Exchange, no separate report by the investor is required because the investment registration card system is designed to control and oversee foreign investment through a computer system. However, a foreign investor’s acquisition or sale of shares outside the Korea Exchange (as discussed above) must be reported by the foreign investor or his standing proxy to the Governor at the time of each such acquisition or sale; provided, however, that a foreign investor must ensure that any acquisition or sale by it of shares outside the Korea Exchange in the case of trades in connection with a tender offer, odd-lot trading of shares or trades of a class of shares for which the aggregate foreign ownership limit has been reached or exceeded, is reported to the Governor by the Korea Securities Depository, financial investment companies with a dealing or brokerage license or securities finance companies engaged to facilitate such transaction. A foreign investor must appoint one or more standing proxies from among the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks) financial investment companies with a dealing, brokerage or collective investment license and internationally

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recognized custodians which will act as a standing proxy to exercise shareholders’ rights or perform any matters related to the foregoing activities if the foreign investor does not perform these activities himself. However, a foreign investor may be exempted from complying with these standing proxy rules with the approval of the Governor in cases deemed inevitable by reason of conflict between laws of Korea and those of the home country of the foreign investor.

Certificates evidencing shares of Korean companies must be kept in custody with an eligible custodian in Korea. Only foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license, the Korea Securities Depository and internationally recognized custodians are eligible to act as a custodian of shares for a non-resident or foreign investor. A foreign investor must ensure that his custodian deposits its shares with the Korea Securities Depository. However, a foreign investor may be exempted from complying with this deposit requirement with the approval of the Governor in circumstances where compliance with that requirement is made impracticable, including cases where compliance would contravene the laws of the home country of such foreign investor.

Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean company without being subject to any foreign investment ceiling. As one such exception, designated public corporations are subject to a 40% ceiling on the acquisition of shares by foreigners in the aggregate. Designated public corporations may set a ceiling on the acquisition of shares by a single person according to its articles of incorporation. We set this ceiling at 3% until the discontinuation of our designation as a public corporation on September 28, 2000. As a result, we currently do not have any ceiling on the acquisition of shares by a single person or by foreigners in the aggregate. Furthermore, an investment by a foreign investor of not less than 10% of the outstanding shares with voting rights of a Korean company is defined as a direct foreign investment under the Foreign Investment Promotion Law, which is, in general, subject to the report to, and acceptance by, the Ministry of Trade, Industry & Energy. The acquisition of shares of a Korean company by a foreign investor may also be subject to certain foreign shareholding restrictions in the event that the restrictions are prescribed in each specific law which regulates the business of the Korean company.

Under the Foreign Exchange Transaction Laws, a foreign investor who intends to acquire shares must designate a foreign exchange bank at which he must open a foreign currency account and a Won account exclusively for stock investments. No approval is required for remittance into Korea and deposit of foreign currency funds in the foreign currency account. Foreign currency funds may be transferred from the foreign currency account at the time required to place a deposit for, or settle the purchase price of, a stock purchase transaction to a Won account opened in the name of a financial investment company with a dealing, brokerage or collective investment license. Funds in the foreign currency account may be remitted abroad without any governmental approval.

Dividends on Shares are paid in Won. No governmental approval is required for foreign investors to receive dividends on, or the Won proceeds of the sale of, any shares to be paid, received and retained in Korea. Dividends paid on, and the Won proceeds of the sale of, any shares held by a non-resident of Korea must be deposited either in a Won account with the investor’s financial investment company with a dealing, brokerage or collective investment license or his Won Account. Funds in the investor’s Won Account may be transferred to his foreign currency account or withdrawn for local living expenses up to certain limitations. Funds in the Won Account may also be used for future investment in shares or for payment of the subscription price of new shares obtained through the exercise of preemptive rights.

Financial investment companies with a dealing, brokerage or collective investment license are allowed to open foreign currency accounts with foreign exchange banks exclusively for accommodating foreign investors’ stock investments in Korea. Through these accounts, these financial investment companies and asset management companies may enter into foreign exchange transactions on a limited basis, such as conversion of foreign currency funds and Won funds, as counterparty to foreign investors, without the investors having to open their own accounts with foreign exchange banks.

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Item 10.E. Taxation

The following summary is based upon tax laws of the United States and Korea as in effect on the date of this annual report on Form 20-F, and is subject to any change in United States or Korean law that may come into effect after such date. Investors in the shares of common stock or ADSs are advised to consult their own tax advisers as to the United States, Korean or other tax consequences of the purchase, ownership and disposition of such securities, including the effect of any foreign, state or local tax laws.

Korean Taxation

The following is a summary of the principal Korean tax consequences to owners of the common shares or ADSs, as the case may be, who are non-resident individuals or non-Korean corporations without a permanent establishment in Korea to which the relevant income is attributable or with which the relevant income is effectively connected (“Non-resident Holders”). The statements regarding Korean tax laws set forth below are based on the laws in force and as interpreted by the Korean taxation authorities as of the date hereof. This summary is not exhaustive of all possible tax considerations which may apply to a particular investor and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of the common shares or ADSs, including specifically the tax consequences under Korean law, the laws of the jurisdiction of which they are resident, and any tax treaty between Korea and their country of residence, by consulting their own tax advisers.

Tax on Dividends

Dividends on the common shares or ADSs paid (whether in cash or in shares) to a Non-resident Holder will be subject to Korean withholding taxes at the rate of 22% (including local income tax) or such lower rate as is applicable under a treaty between Korea and such Non-resident Holder’s country of tax residence. Free distributions of shares representing a capitalization of certain capital surplus reserves may be subject to Korean withholding taxes.

The tax is withheld by the payer of the dividend. While it is the payer which is required to withhold the tax, Korean law generally entitles the person who was subject to the withholding of Korean tax to recover from the Government any part of the Korean tax withheld, upon providing evidence that it was entitled to have tax withheld at a lower rate, if certain conditions are met.

Tax on Capital Gains

As a general rule, capital gains earned by Non-resident Holders upon transfer of the common shares or ADSs are subject to Korean withholding tax at the lower of (i) 11% (including local income tax) of the gross proceeds realized or (ii) 22% (including local income tax) of the net realized gains (subject to the production of satisfactory evidence of the acquisition costs and certain direct transaction costs), unless exempt from Korean income taxation under the effective Korean tax treaty with the Non-resident Holder’s country of tax residence or Korean tax law.

However, a Non-resident Holder will not be subject to Korean income taxation on capital gains realized upon the sale of the common shares through the KRX KOSPI Market if the Non-resident Holder (i) has no permanent establishment in Korea and (ii) did not or has not owned (together with any shares owned by any entity with a specified special relationship with such Non-resident Holder) 25% or more of the total issued and outstanding shares of us at any time during the calendar year in which the sale occurs and during the five calendar years prior to the calendar year in which the sale occurs.

It should be noted that capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a transfer of ADSs outside Korea will generally be exempt

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from Korean income taxation, provided that the ADSs are deemed to have been issued overseas. If and when an owner of the underlying common shares transfers the ADSs following the conversion of the underlying shares for ADSs, such person will not be exempt from Korean income taxation.

Inheritance Tax and Gift Tax

Korean inheritance tax is imposed upon (1) all assets (wherever located) of the deceased if at the time of his death he was a tax resident of Korea and (2) all property located in Korea which passes on death (irrespective of the domicile of the deceased). Gift tax is imposed in similar circumstances to the above. The taxes are imposed if the value of the relevant property is above a certain limit and the rate varies from 10% to 50% depending on the value of the property.

Under Korean inheritance and gift tax laws, securities issued by a Korean corporation are deemed to be located in Korea irrespective of where they are physically located or by whom they are owned and consequently, the Korea inheritance and gift taxes will be imposed on transfers of the securities by inheritance or gift.

Securities Transaction Tax

Securities transaction tax is imposed on the transfer of shares issued by a Korean corporation or the right to subscribe for such shares generally at the rate of 0.5% of the sales price. In the case of the transfer of shares listed on the KRX KOSPI Market (such as the common shares), the securities transaction tax is imposed generally at the rate of (i) 0.3% of the sales price of such shares (including agricultural and fishery special surtax thereon) if traded on the KRX KOSPI Market or (ii) subject to certain exceptions, 0.5% of the sales price of such shares if traded outside the KRX KOSPI Market.

Securities transaction tax or the agricultural and fishery special surtax is not applicable if (i) the shares or rights to subscribe for shares are listed on a designated foreign stock exchange and (ii) the sale of the shares takes place on such exchange.

Securities transaction tax, if applicable, must be paid by the transferor of the shares or rights, in principle. When the transfer is effected through a securities settlement company, such settlement company is generally required to withhold and pay (to the tax authority) the tax, and when such transfer is made through a financial investment company with a brokerage license only, such company is required to withhold and pay the tax. Where the transfer is effected by a Non-resident Holder without a permanent establishment in Korea, other than through a securities settlement company or a financial investment company with a brokerage license, the transferee is required to withhold the securities transaction tax. Failure to do so will result in the imposition of penalties equal to the sum of (i) between 10% to 40% of the tax amount due, depending on the nature of the improper reporting, and (ii) 10.95% per annum on the tax amount due for the default period.

Tax Treaties

Currently, Korea has income tax treaties with a number of countries, including, inter alia, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, Ireland, the Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States of America, under which the rate of withholding tax on dividend and interest is reduced, generally to between 5% and 16.5% (including local income tax), and the tax on capital gains derived by a non-resident from the transfer of securities issued by a Korean company is often eliminated.

Each Non-resident Holder of common shares should inquire for itself whether it is entitled to the benefits of a tax treaty with Korea. It is the responsibility of the party claiming the benefits of a tax treaty in respect of interest, dividend, capital gains or “other income” to submit to us (or our agent), the

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purchaser or the financial investment company with a brokerage license, as the case may be, prior to or at the time of payment, such evidence of tax residence of the party claiming the treaty benefit as the Korean tax authorities may require in support of its claim for treaty protection. In the absence of sufficient proof, we (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, must withhold tax at the normal rates.

For a non-resident of Korea to obtain the benefits of treaty-reduced tax rates on certain Korean source income (e.g., capital gains and interest) under an applicable tax treaty, Korean tax law requires such non-resident (or its agents) to submit to the payer of such Korean source income an application for treaty-reduced tax rates prior to receipt of such Korean source income; provided, however, that an owner of ADSs who is a non-resident of Korea is not required to submit such application, if the Korean source income on the ADSs is paid through an account opened at the Korea Securities Depository by a foreign depository. The payer of such Korean source income, in turn, is required to submit such application to the relevant district tax office by the ninth day of the month following the date of the first payment of such income.

If Korean source income is paid to a non-resident through an overseas investment vehicle, such investment vehicle must obtain an application for tax exemption or reduced tax rates from each non-resident, who is the beneficial owner of such investment vehicle and submit to the payer of such Korean source incomes an overseas investment vehicle report, together with the applications for tax exemptions or reduced tax rates prepared by the non-resident beneficial owner. An overseas investment vehicle means an organization established outside of Korea that manages funds collected through investment solicitation by way of acquiring, disposing, or otherwise investing in investment targets and then distributes the outcome of such management to investors. An application for tax exemption or reduced tax rates submitted by the non-resident remains effective for three years from submission, and if any material changes occur with respect to information provided in the application, an application reflecting such change must be newly submitted.

At present, Korea has not entered into any tax treaty relating to inheritance or gift tax.

United States Taxation

This summary describes the material U.S. federal income tax consequences for a U.S. holder (as defined below) of owning our shares of common stock or ADSs. This summary applies to you only if you hold shares of common stock or ADSs as capital assets for tax purposes. This summary does not apply to you if you are a member of a class of holders subject to special rules, such as:

• a dealer in securities or currencies;

• a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings;

• a bank;

• a life insurance company;

• a tax-exempt organization;

• a person that holds shares of common stock or ADSs that are a hedge or that are hedged against interest rate or currency risks;

• a person that holds shares of common stock or ADSs as part of a straddle or conversion transaction for tax purposes;

• a person whose functional currency for tax purposes is not the Dollar;

• a person that owns or is deemed to own 10% or more of any class of our stock or 10% or more of the combined voting power or value of all of our classes of stock; or

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• an entity treated as a partnership for U.S. federal income tax purposes that holds shares of common stock or ADSs, or an investor therein.

This summary is based on laws, treaties and regulatory interpretations in effect on the date hereof, all of which are subject to change, possibly on a retroactive basis.

Please consult your own tax advisers concerning the U.S. federal, state, local and other foreign tax consequences of purchasing, owning and disposing of shares of common stock or ADSs in your particular circumstances.

For purposes of this summary, you are a “U.S. holder” if you are a beneficial owner of a share of common stock or ADS that is:

• a citizen or resident of the United States;

• a U.S. domestic corporation; or

• otherwise subject to U.S. federal income tax on a net income basis with respect to income from the shares of common stock or ADS.

Shares of Common Stock and ADSs

In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the shares of common stock represented by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the shares of common stock represented by that ADS.

Dividends

The gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be subject to U.S. federal income taxation as foreign source dividend income. Dividends paid in Won will be included in your income in a Dollar amount calculated by reference to the exchange rate in effect on the date of your (or, in the case of ADSs, the depositary’s) receipt of the dividend, regardless of whether the payment is in fact converted into Dollars. If such a dividend is converted into Dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. U.S. holders should consult their own tax advisers regarding the treatment of any foreign currency gain or loss on any Won received by U.S. holders that are converted into Dollars on a date subsequent to receipt.

Subject to certain exceptions for short-term and hedged positions, the Dollar amount of dividends received by an individual U.S. holder with respect to the ADSs and common stock will be subject to taxation at a preferential rate applicable to long-term capital gains if the dividends are “qualified dividends.” Dividends paid on the ADSs and common stock will be treated as qualified dividends if (i) we are eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service has approved for the purposes of the qualified dividend rules and (ii) we were not, in the year prior to the year in which the dividend is paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (“PFIC”). The income tax treaty between Korea and the United States (“Treaty”) has been approved for the purposes of the qualified dividend rules, and we believe we are eligible for benefits under the Treaty. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2016 or 2017 taxable year. In addition, based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our 2018 taxable year. You should consult your own tax advisers regarding the availability of the reduced dividend tax rate in the light of your own particular circumstances.

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Distributions of additional shares in respect of shares of common stock or ADSs that are made as part of a pro-rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

Sales and Other Dispositions

For U.S. federal income tax purposes, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of common stock or ADSs equal to the difference, if any, between the amount realized on the sale or exchange and your adjusted tax basis in the common stock or ADSs. Any gain realized by a U.S. holder on the sale or other disposition of common stock or ADSs generally will be treated as U.S. source income for U.S. foreign tax credit purposes. This gain or loss will be capital gain or loss, and will be long-term capital gain or loss to the extent that the shares of common stock or ADSs sold or disposed of were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to taxation at a reduced rate.

Foreign Tax Credit Considerations

You should consult your own tax advisers to determine whether you are subject to any special rules that limit your ability to make effective use of foreign tax credits, including the possible adverse impact of failing to take advantage of benefits under the income tax treaty between the United States and Korea. If no such rules apply, you generally may claim a credit, up to any applicable reduced rates provided under the Treaty, against your U.S. federal income tax liability for Korean taxes withheld from dividends on shares of common stock or ADSs, so long as you have owned the shares of common stock or ADSs (and not entered into specified kinds of hedging transactions) for at least a 16-day period that includes the ex-dividend date. Instead of claiming a credit, you may, at your election, deduct such Korean taxes in computing your taxable income, provided that you do not elect to claim a foreign tax credit for any foreign income taxes paid or accrued for the relevant tax year and subject to generally applicable limitations under U.S. tax law. Foreign tax credits will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions in securities and may not be allowed in respect of arrangements in which your expected economic profit is insubstantial. You may not be able to use the foreign tax credit associated with any Korean withholding tax imposed on a distribution of additional shares that is not subject to U.S. federal income tax unless you can use the credit against U.S. federal income tax due on other foreign-source income.

Any Korean securities transaction tax or agriculture and fishery special tax that you pay will not be creditable for foreign tax credit purposes.

The calculation of foreign tax credits and, in the case of a U.S. holder that elects to deduct foreign taxes, the availability of deductions, involves the application of complex rules that depend on a U.S. holder’s particular circumstances. You should consult your own tax advisers regarding the creditability or deductibility of such taxes.

Specified Foreign Financial Assets

Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 are generally required to file an information statement along with their tax returns, currently on Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer (which would include the common stock or ADSs) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married individuals. Regulations extend this reporting requirement to certain entities that are treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. holders who fail to report the required

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information could be subject to substantial penalties. In addition, the statute of limitations for assessment of tax would be suspended, in whole or part. Prospective investors should consult their own tax advisors concerning the application of these rules to their investment in the common stock or ADSs, including the application of the rules to their particular circumstances.

U.S. Information Reporting and Backup Withholding Rules

Payments in respect of shares of common stock or ADSs that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to backup withholding unless the holder (1) is a corporation or other exempt recipient and demonstrates this when required or (2) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Holders that are not U.S. persons generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.

Item 10.F. Dividends and Paying Agents

See “Item 8.A. Consolidated Statements and Other Financial Information — Dividends” above for information concerning our dividend policies and our payment of dividends. See “Item 10.B. Memorandum and Articles of Association — Dividends” for a discussion of the process by which dividends are paid on shares of our common stock. The paying agent for payment of our dividends on ADSs in the United States is the Citibank, N.A.

Item 10.G. Statements by Experts

Not applicable

Item 10.H. Documents on Display

We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed with the SEC at the Public Reference Rooms in Washington, D.C., New York, New York and Chicago, Illinois. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Any filings we make electronically will be available to the public over the Internet at the SEC’s web site at http://www.sec.gov.

Item 10.I. Subsidiary Information

Not applicable

Item 11. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to foreign exchange rate and interest rate risk primarily associated with underlying liabilities, and to changes in the commodity prices of principal raw materials. Following evaluation of these positions, we selectively enter into derivative financial instruments to manage the related risk exposures, primarily with respect to foreign exchange rate and interest rate risks, which are entered into with major financial institutions in order to minimize the risk of credit loss. Our market risk management policy determines the market risk tolerance level, measuring period, controlling responsibilities, management procedures, hedging period and hedging ratio very specifically. We also prohibit all speculative hedging transactions and evaluate and manage foreign exchange exposures to receivables and payables.

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None of our loss exposures related to derivative contracts are unlimited, and we do not believe that our net derivative positions could result in a material loss to our profit before income tax or total equity due to significant fluctuations of major currencies against the Korean Won. Due to the nature of our derivative contracts primarily as hedging instruments that manage foreign exchange risks, net gain or net loss on derivatives transactions and valuation of derivatives are typically offset by net loss or net gain on foreign currency transaction and translation. We recorded net gain on valuation of derivatives of Won 83 billion and net gain on derivatives transactions of Won 23 billion in 2015, net loss on derivatives transactions of Won 22 billion and net loss on valuation of derivatives of Won 16 billion in 2016, and net loss on valuation of derivatives of Won 162 billion and net loss on derivatives transactions of Won 26 billion in 2017. 

Exchange Rate Risk

Korea is our most important market and, therefore, a substantial portion of our cash flow is denominated in Won. Most of our exports are denominated in Dollars. Japan is also an important market for us, and we derive significant cash flow denominated in Yen. We are exposed to foreign exchange risk related to foreign currency denominated liabilities and anticipated foreign exchange payments. Anticipated foreign exchange payments, which represent a substantial sum and are mostly denominated in Dollars, relate primarily to imported raw material costs and freight costs. Foreign currency denominated liabilities relate primarily to foreign currency denominated debt.

We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO Daewoo’s exposure to fluctuations in exchange rates, including the Won/Dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO Daewoo’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in Dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO Daewoo and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks.

Our foreign currency exposure and changes in gain or loss resulting from a 10% foreign exchange rate change against the Korean Won are as follows:

	For the Years Ended December 31,
	2015					2016					2017
	Increase			Decrease		Increase			Decrease		Increase			Decrease
	(In billions of Won)
US Dollars	￦	(166	)	￦	166	￦	(163	)	￦	163	￦	(173	)	￦	173
Japanese Yen		(97	)		97		(78	)		78		(54	)		54
Euro		(22	)		22		(9	)		9		(10	)		10

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Interest Rate Risk

We are also subject to market risk exposure arising from changing interest rates. In particular, we are exposed to interest rate risk on our existing floating rate borrowings and on additional debt financings that we may periodically undertake for various reasons, including capital expenditures and refinancing of our existing borrowings. A rise in interest rates will increase the cost of our existing variable rate borrowings. If interest rates on borrowings with floating rates had been 1% higher or lower with all other variables held constant, the impact on the gain or loss of the applicable period would be as follows:

	For the Years Ended December 31,
	2015		2016		2017
	(In billions of Won)
Increase or decrease in annual profit and net equity	￦	118	￦	120	￦	100

A reduction of interest rates also increases the fair value of our debt portfolio, which is primarily of a fixed interest nature. From time to time, we use, to a limited extent, interest rate swaps to reduce interest rate volatility on some of our debt and manage our interest expense by achieving a balanced mixture of floating and fixed rate debt.

The following table summarizes the carrying amounts, fair values, principal cash flows by maturity date and weighted average interest rates of our short-term and long-term liabilities as of December 31, 2017 which are sensitive to exchange rates and/or interest rates. The information is presented in Won, which is our reporting currency.

	Maturities
																			December 31, 2017					December 31, 2016
	2018			2019			2020			2021			2022			Thereafter			Total			Fair Value		Total			Fair Value
	(In billions of Won except rates)
Local currency:
Fixed rate		3,350			1,281			554			288			244			266			5,983			5,882		6,064			5,943
Average weighted rate (1) .		3.09	%		3.36	%		2.75	%		3.54	%		2.66	%		3.00	%		3.12	%				2.45	%
Variable rate		699			180			134			22			15			12			1,062			1,062		1,039			1,034
Average weighted rate (1)		3.08	%		2.58	%		2.94	%		3.33	%		2.99	%		2.51	%		2.98	%				2.84	%
Sub-total		4,049			1,461			688			310			259			278			7,045			6,944		7,103			6,977
Foreign currency, principally Dollars and Yen:
Fixed rate		3,009			88			966			889			0			205			5,157			5,016		5,775			5,639
Average weighted rate (1)		2.23	%		4.13	%		3.87	%		4.86	%		8.40	%		3.16	%		3.05	%				3.15	%
Variable rate		4,824			309			767			29			7			2,925			8,861			8,871		9,827			9,837
Average weighted rate (1)		3.17	%		2.20	%		3.20	%		3.59	%		3.24	%		6.77	%		4.33	%				2.92	%
Sub-total		7,833			397			1,733			918			7			3,130			14,018			13,887		15,602			15,476
Total		11,882			1,858			2,421			1,228			266			3,408			21,063			20,831		22,705			22,453

(1) Weighted average rates of the portfolio at the period end.

Item 12.  Description of Securities Other than Equity Securities

Not applicable

Item 12.A.  Debt Securities

Not applicable

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Item 12.B.  Warrants and Rights

Not applicable

Item 12.C.  Other Securities

Not applicable

Item 12.D.  American Depositary Shares

Fees and Charges

We switched our depositary from The Bank of New York Mellon to Citibank, N.A. in July 2013. Holders of our ADSs are required to pay the following service fees to the depositary:

Services	Fees
Issuance of ADSs upon deposit of shares	Up to $5.00 per 100 ADSs issued
Delivery of deposited shares against surrender of ADSs	Up to $5.00 per 100 ADSs surrendered
Distributions of cash dividends or other cash distributions	Up to $5.00 per 100 ADSs held
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs	Up to $5.00 per 100 ADSs held
Distribution of securities other than ADSs or rights to purchase additional ADSs	Up to $5.00 per 100 ADSs held
General depositary services	Up to $5.00 per 100 ADSs held

Holders of our ADSs are also responsible for paying certain fees and expenses incurred by the depositary such as:

• fees for the transfer and registration of shares charged by the registrar and transfer agent for the shares in Korea (i.e., upon deposit and withdrawal of shares);

• expenses incurred for converting foreign currency into Dollars;

• expenses for cable, telex and fax transmissions and for delivery of securities;

• taxes (including applicable interest and penalties) and other governmental charges;

• fees and expenses incurred in connection with compliance with exchange control regulations and other regulatory requirements; and

• fees and expenses incurred in connection with the delivery or servicing of shares on deposit.

Depositary fees payable upon the issuance and surrender of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for surrender. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date.

The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (i.e., stock dividend, rights), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via the Korea Securities Depositary, or KSD), the depositary generally collects its fees through the systems provided by KSD (whose nominee is the registered holder of the ADSs held in KSD) from the brokers and custodians holding ADSs in their KSD accounts. The brokers and custodians who hold their clients’ ADSs in KSD accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary.

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In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to such holder of ADSs.

The fees and charges that holders of our ADSs may be required to pay may vary over time and may be changed by us and by the depositary. Holders of our ADSs will receive prior notice of such changes.

Fees and Payments from the Depositary to Us

In 2017, we received $770,000 from the depositary for reimbursement of various costs, including preparation of SEC filing and submission, listing fees, proxy process expenses (printing, postage and distribution), legal fees and contributions for our investor relations activities.

In addition, as part of its service to us, the depositary waives its fees for the standard costs associated with the administration of the ADS facility, associated operating expenses, investor relations advice and access to an internet-based tool used in our investor relations activities.

PART II

Item 13.   Defaults, Dividend Arrearages and Delinquencies

Not applicable

Item 14.  Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable

Item 15.  Controls and Procedures

a. Disclosure Controls and Procedures

Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2017. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

b. Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed by, and under the supervision of, our principal executive, principal operating and principal financial officers, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

111

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management has completed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2017 based on criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2017.

c. Report of the Independent Registered Public Accounting Firm

The report of our independent registered public accounting firm, KPMG Samjong Accounting Corp. (“KPMG Samjong”), on the effectiveness of our internal control over financial reporting as of December 31, 2017 is included in Item 18 of this Form 20-F.

d. Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the year covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our adoption of Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission did not have, and is not reasonably likely to have, any material effect on our internal control over financial reporting.

Item 16. [Reserved]

Item 16.A. Audit Committee Financial Expert

The board of directors has approved the members of our audit committee. Chung, Moon-Ki is an audit committee financial expert and is independent within the meaning of applicable SEC rules.

Item 16.B. Code of Ethics

We have adopted a code of business conduct and ethics, as defined in Item 16B. of Form 20-F under the Securities Exchange Act of 1934, as amended. Our code of business conduct and ethics, called Code of Conduct, applies to our chief executive officer and chief financial officer, as well as to our directors, other officers and employees. Our Code of Conduct is available on our web site at www.posco.com. If we amend the provisions of our Code of Conduct that apply to our chief executive officer or chief financial officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our web site at the same address.

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Item 16.C. Principal Accountant Fees and Services

Audit and Non-Audit Fees

The following table sets forth the fees billed to us by our independent auditor, KPMG, in 2016 and 2017:

	For the Year Ended December 31,
	2016		2017
	(In millions of Won)
Audit fees	￦	5,159	￦	6,164
Tax fees		1,267		805
Total fees	￦	6,426	￦	6,969

Audit fees in 2016 and 2017 as set forth in the above table are the aggregate fees billed by KPMG in connection with the audit of our annual financial statements and the annual financial statements of other related companies and review of interim financial statements.

Tax fees in 2016 and 2017 as set forth in the above table are fees billed by KPMG for our tax compliance and tax planning, as well as compliance related to transfer pricing.

Audit Committee Pre-Approval Policies and Procedures

Our audit committee has not established pre-approval policies and procedures for the engagement of our independent auditors for services. Our audit committee expressly approves on a case-by-case basis any engagement of our independent auditors for audit and non-audit services provided to our subsidiaries or us.

Item 16.D.  Exemptions from the Listing Standards for Audit Committees

Not applicable

Item 16.E.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table sets forth the repurchases of common shares by us or any affiliated purchasers during the fiscal year ended December 31, 2017:

Period	Total Number of Shares Purchased		Average Price Paid Per Share (In Won)		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans
January 1 to January 31		—		—		—		—
February 1 to February 29		—		—		—		—
March 1 to March 31		—		—		—		—
April 1 to April 30		—		—		—		—
May 1 to May 31		—		—		—		—
June 1 to June 30		—		—		—		—
July 1 to July 31		—		—		—		—
August 1 to August 31		—		—		—		—
September 1 to September 30		—		—		—		—
October 1 to October 31		—		—		—		—
November 1 to November 30		—		—		—		—
December 1 to December 31		—		—		—		—
Total		—		—		—		—

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Item 16.F. Change in Registrant’s Certifying Accountant

Not applicable

Item 16.G. Corporate Governance

Pursuant to the rules of the New York Stock Exchange applicable to foreign private issuers like us that are listed on the New York Stock Exchange, we are required to disclose significant differences between the New York Stock Exchange’s corporate governance standards and those that we follow under Korean law and in accordance with our own internal procedures. The following is a summary of such significant differences.

NYSE Corporate Governance Standards	POSCO’s Corporate Governance Practice
Director Independence
Listed companies must have a majority of independent directors	Our articles of incorporation provide that our board of directors must comprise no less than a majority of Outside Directors. Our Outside Directors must meet the criteria for outside directorship set forth under the Korean Securities and Exchange Act. The majority of our board of directors is independent (as defined in accordance with the New York Stock Exchange’s standards), and seven out of 12 directors are Outside Directors. Under our articles of incorporation, we may have up to five Inside Directors and eight Outside Directors.
Nomination/Corporate Governance Committee
A nomination/corporate governance committee of independent directors is required. The committee must have a charter that addresses the purpose, responsibilities (including development of corporate governance guidelines) and annual performance evaluation of the committee.	We have not established a separate nomination corporate governance committee. However, we maintain a Director Candidate Recommendation and Management Committee composed of three Outside Directors and one Inside Director.
Compensation Committee
A compensation committee of independent directors is required. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The charter must be made available on the company’s website. In addition, in accordance with the U.S. Securities and Exchange Commission rules adopted pursuant to Section 952 of the Dodd-Frank Act, the New York Stock Exchange listing standards were amended to expand the factors relevant in determining whether a committee member has a relationship with the company that will materially affect that member’s duties to the compensation committee. Additionally, the committee may obtain or retain the advice of a compensation adviser only after taking into consideration all factors relevant to determining that adviser’s independence from management.	We maintain an Evaluation and Compensation Committee composed of four Outside Directors.
Executive Session
Non-management directors must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year.	Our Outside Directors hold meetings solely attended by Outside Directors in accordance with operation guidelines of our board of directors.
Audit Committee
Listed companies must have an audit committee that satisfies the independence and other requirements of Rule 10A-3 under the Exchange Act. All members must be independent. The committee must have a charter addressing the committee’s purpose, an annual performance evaluation of the committee, and the duties and responsibilities of the committee. The charter must be made available on the company’s website.	We maintain an Audit Committee comprised of three Outside Directors who meet the applicable independence criteria set forth under Rule 10A-3 under the Exchange Act.

114

NYSE Corporate Governance Standards	POSCO’s Corporate Governance Practice
Audit Committee Additional Requirements
Listed companies must have an audit committee that is composed of at least three directors.	Our Audit Committee has three members, as described above.
Shareholder Approval of Equity Compensation Plan
Listed companies must allow their shareholders to exercise their voting rights with respect to any material revision to the company’s equity compensation plan.	We currently have an Employee Stock Ownership Program. We previously provided a stock options program for officers and directors, as another equity compensation plan. However, during our annual shareholders’ meeting in February 2006, our shareholders resolved to terminate the stock option program and amended our articles of incorporation to delete the provision allowing grant of stock options to officers and directors. Consequently, since February 24, 2006, we have not granted stock options to officers and directors. Matters related to the Employee Stock Ownership Program are not subject to shareholders’ approval under Korean law.
Corporate Governance Guidelines
Listed companies must adopt and disclose corporate governance guidelines.	We have adopted a Corporate Governance Charter setting forth our practices with respect to relevant corporate governance matters. Our Corporate Governance Charter is in compliance with Korean law but does not meet all requirements established by the New York Stock Exchange for U.S. companies listed on the exchange. A copy of our Corporate Governance Charter is available on our website at www.posco.com.
Code of Business Conduct and Ethics
Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.	We have adopted a Code of Conduct for all directors, officers and employees. A copy of our Code of Conduct is available on our website at www.posco.com.

Item 16.H. Mine Safety Disclosure

Not applicable

PART III

Item 17. Financial Statements

Not applicable

Item 18. Financial Statements

	Page
Report of Independent Registered Public Accounting Firm, KPMG Samjong Accounting Corp., on Consolidated Financial Statements		F-2
Report of Independent Registered Public Accounting Firm, KPMG Samjong Accounting Corp., on Internal Control over Financial Reporting		F-3
Consolidated Statements of Financial Position as of December 31, 2016 and 2017		F-5
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2015, 2016 and 2017		F-7
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2015, 2016 and 2017		F-8
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2016 and 2017		F-11
Notes to Consolidated Financial Statements		F-13

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Item 19. Exhibits

1.1	—	Articles of Incorporation of POSCO (English translation)
2.1	—	Form of Common Stock Certificate (including English translation) (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement No. 33-81554)* (P)
2.2	—	Form of Deposit Agreement (including Form of American Depositary Receipts) (incorporated by reference to the Registrant’s Registration Statement (File No. 333-189473) on Form F-6)*
8.1	—	List of consolidated subsidiaries
12.1	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed previously

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Table of Contents

	Page
Report of Independent Registered Public Accounting Firm		F-2
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting		F-3
Consolidated Financial Statements
Consolidated Statements of Financial Position		F-5
Consolidated Statements of Comprehensive Income (Loss)		F-7
Consolidated Statements of Changes in Equity		F-8
Consolidated Statements of Cash Flows		F-11
Notes to the Consolidated Financial Statements		F-13

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

POSCO:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of POSCO and subsidiaries (the Company) as of December 31, 2016 and 2017 and the related consolidated statements of comprehensive income (loss), changes in equity and cash flows for each of the years in the three-year period ended December 31, 2017 and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2016 and 2017 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2017, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 26, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG Samjong Accounting Corp.

We have served as the Company’s auditor since 2008.

Seoul, Korea

April 26, 2018

F-2

Report of Independent Registered Public Accounting Firm

on Internal Control over Financial Reporting

To the Shareholders and Board of Directors

POSCO:

Opinion on Internal Control over Financial Reporting

We have audited POSCO and subsidiaries (the Company)’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, 2016 and 2017, the related consolidated statements of comprehensive income (loss), changes in equity and cash flows for each of the years in the three-year period ended December 31, 2017 and the related notes (collectively, the consolidated financial statements), and our report dated April 26, 2018 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

F-3

being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG Samjong Accounting Corp.

Seoul, Korea

April 26, 2018

F-4

POSCO and Subsidiaries

Consolidated Statements of Financial Position

As of December 31, 2016 and 2017

	Notes		December 31, 2016		December 31, 2017
	(in millions of Won)
Assets
Cash and cash equivalents		4,5,23	￦	2,447,619		2,612,530
Trade accounts and notes receivable, net		6,17,23,29,37		9,674,026		8,824,563
Other receivables, net		7,23,37		1,539,742		1,636,006
Other short-term financial assets		8,23		5,224,911		7,045,880
Inventories		9		9,515,895		10,793,781
Current income tax assets		35		46,473		38,489
Assets held for sale		10		311,958		71,768
Other current assets		16		894,484		821,242
Total current assets				29,655,108		31,844,259
Long-term trade accounts and notes receivable, net		6,23		51,124		731,570
Other receivables, net		7,23,37		762,912		879,176
Other long-term financial assets		8,23		2,657,692		1,911,684
Investments in associates and joint ventures		11		3,882,389		3,557,932
Investment property, net		13		1,117,720		1,064,914
Property, plant and equipment, net		14		33,770,339		31,883,535
Intangible assets, net		15		6,088,729		5,952,269
Defined benefit assets, net		21		83,702		8,224
Deferred tax assets		35		1,500,219		1,463,055
Other non-current assets		16		567,680		489,011
Total non-current assets				50,482,506		47,941,370
Total assets			￦	80,137,614		79,785,629

See accompanying notes to the consolidated financial statements.

F-5

POSCO and Subsidiaries

Consolidated Statements of Financial Position, Continued

As of December 31, 2016 and 2017

	Notes		December 31, 2016			December 31, 2017
	(in millions of Won)
Liabilities
Trade accounts and notes payable		23,37	￦	4,073,286			3,465,146
Short-term borrowings and current installments of long-term borrowings		4,17,23		10,194,807			11,274,516
Other payables		18,23		1,851,659			1,753,461
Other short-term financial liabilities		19,23,37		149,748			129,812
Current income tax liabilities		35		446,071			515,538
Provisions		20		114,865			110,946
Other current liabilities		22,29		2,113,873			2,240,919
Total current liabilities				18,944,309			19,490,338
Long-term trade accounts and notes payable		23,37		44,512			12,532
Long-term borrowings, excluding current installments		4,17,23		12,510,191			9,789,141
Other payables		18,23		208,559			147,750
Other long-term financial liabilities		19,23		81,309			114,105
Defined benefit liabilities, net		21		123,604			137,193
Deferred tax liabilities		35		1,642,939			1,904,242
Long-term provisions		20		337,739			477,172
Other non-current liabilities		22		479,183			386,431
Total non-current liabilities				15,428,036			12,968,566
Total liabilities				34,372,345			32,458,904
Equity
Share capital		24		482,403			482,403
Capital surplus		24		1,407,247			1,422,021
Hybrid bonds		25		996,919			996,919
Reserves		26		(143,985	)		(682,556	)
Treasury shares		27		(1,533,468	)		(1,533,054	)
Retained earnings				41,125,712			42,974,658
Equity attributable to owners of the controlling company				42,334,828			43,660,391
Non-controlling interests		25		3,430,441			3,666,334
Total equity				45,765,269			47,326,725
Total liabilities and equity			￦	80,137,614			79,785,629

See accompanying notes to the consolidated financial statements.

F-6

POSCO and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2015, 2016 and 2017

	Notes		2015			2016			2017
	(in millions of Won, except per share information)
Revenue		28,29,37	￦	58,522,268			52,939,771			60,186,867
Cost of sales		29,31,34,37		(52,018,434	)		(46,271,465	)		(51,915,597	)
Gross profit				6,503,834			6,668,306			8,271,270
Selling and administrative expenses		30,34
Administrative expenses		31		(2,395,248	)		(2,291,540	)		(2,176,800	)
Selling expenses				(1,728,956	)		(1,553,686	)		(1,557,277	)
Other operating income and expenses		32,37
Other operating income				549,048			215,136			451,224
Other operating expenses		34		(1,442,298	)		(755,720	)		(792,296	)
Operating profit				1,486,380			2,282,496			4,196,121
Share of profit (loss) of equity-accounted investees, net		11		(506,054	)		(88,677	)		10,540
Finance income and costs		23,33
Finance income				2,557,073			2,231,980			2,372,667
Finance costs				(3,387,054	)		(3,014,190	)		(2,484,277	)
Profit before income taxes				150,345			1,411,609			4,095,051
Income tax expense		35		(266,560	)		(379,544	)		(1,185,740	)
Profit (loss)				(116,215	)		1,032,065			2,909,311
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans		21		41,954			20,540			(47,543	)
Items that are or may be reclassified subsequently to profit or loss:
Capital adjustment arising from investments in equity-method investees				(82,509	)		134,590			(217,388	)
Net changes in unrealized fair value of available-for-sale investments		23		(187,854	)		310,608			(31,389	)
Foreign currency translation differences				66,280			(11,491	)		(264,695	)
Gain or losses on valuation of derivatives		23		—			—			(143	)
Other comprehensive income (loss), net of tax				(162,129	)		454,247			(561,158	)
Total comprehensive income (loss)			￦	(278,344	)		1,486,312			2,348,153
Profit (loss) attributable to:
Owners of the controlling company			￦	171,494			1,354,807			2,756,230
Non-controlling interests				(287,709	)		(322,742	)		153,081
Profit (loss)			￦	(116,215	)		1,032,065			2,909,311
Total comprehensive income (loss) attributable to:
Owners of the controlling company			￦	23,864			1,814,030			2,184,402
Non-controlling interests				(302,208	)		(327,718	)		163,751
Total comprehensive income (loss)			￦	(278,344	)		1,486,312			2,348,153
Basic and diluted earnings per share (in Won)		36		1,731			16,521			34,040

See accompanying notes to the consolidated financial statements.

F-7

POSCO and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2015, 2016 and 2017

	Attributable to owners of the controlling company																			Non-controlling interests			Total
	Share capital		Capital surplus			Hybrid bonds		Reserves			Treasury shares			Retained earnings			Subtotal
	(in millions of Won)
Balance as of January 1, 2015	￦	482,403		1,083,718			996,919		(408,773	)		(1,534,457	)		40,937,148			41,556,958			3,700,438			45,257,396
Comprehensive income (loss):
Profit (loss)		—		—			—		—			—			171,494			171,494			(287,709	)		(116,215	)
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax		—		—			—		—			—			38,771			38,771			3,183			41,954
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—			—		(81,418	)		—			—			(81,418	)		(1,091	)		(82,509	)
Net changes in the unrealized fair value of available-for-sale investments, net of tax		—		—			—		(183,077	)		—			—			(183,077	)		(4,777	)		(187,854	)
Foreign currency translation differences, net of tax		—		—			—		78,094			—			—			78,094			(11,814	)		66,280
Total comprehensive income (loss)		—		—			—		(186,401	)		—			210,265			23,864			(302,208	)		(278,344	)
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—			—		—			—			(479,958	)		(479,958	)		(32,410	)		(512,368	)
Interim dividends		—		—			—		—			—			(159,987	)		(159,987	)		(67,700	)		(227,687	)
Changes in subsidiaries		—		—			—		—			—			—			—			(311,548	)		(311,548	)
Changes in ownership interests in subsidiaries		—		310,485			—		—			—			—			310,485			844,769			1,155,254
Interest of hybrid bonds		—		—			—		—			—			(43,574	)		(43,574	)		(24,187	)		(67,761	)
Disposal of treasury shares		—		(35	)		—		—			559			—			524			—			524
Others		—		(1,089	)		—		418			—			(2,398	)		(3,069	)		804			(2,265	)
Total transactions with owners of the controlling company		—		309,361			—		418			559			(685,917	)		(375,579	)		409,728			34,149
Balance as of December 31, 2015		W    482,403		1,393,079			996,919		(594,756	)		(1,533,898	)		40,461,496			41,205,243			3,807,958			45,013,201

See accompanying notes to the consolidated financial statements.

F-8

POSCO and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2015, 2016 and 2017

	Attributable to owners of the controlling company																		Non-controlling interests			Total
	Share capital		Capital surplus		Hybrid bonds		Reserves			Treasury shares			Retained earnings			Subtotal
	(in millions of Won)
Balance as of January 1, 2016	￦	482,403		1,393,079		996,919		(594,756	)		(1,533,898	)		40,461,496			41,205,243			3,807,958			45,013,201
Comprehensive income (loss):
Profit (loss)		—		—		—		—			—			1,354,807			1,354,807			(322,742	)		1,032,065
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax		—		—		—		—			—			9,787			9,787			10,753			20,540
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—		—		124,626			—			—			124,626			9,964			134,590
Net changes in the unrealized fair value of available-for-sale investments, net of tax		—		—		—		314,428			—			—			314,428			(3,820	)		310,608
Foreign currency translation differences, net of tax		—		—		—		10,382			—			—			10,382			(21,873	)		(11,491	)
Total comprehensive income (loss)		—		—		—		449,436			—			1,364,594			1,814,030			(327,718	)		1,486,312
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—		—		—			—			(479,974	)		(479,974	)		(50,333	)		(530,307	)
Interim dividends		—		—		—		—			—			(179,992	)		(179,992	)		—			(179,992	)
Changes in subsidiaries		—		—		—		—			—			—			—			49,250			49,250
Changes in ownership interests in subsidiaries		—		8,650		—		—			—			—			8,650			(16,544	)		(7,894	)
Interest of hybrid bonds		—		—		—		—			—			(43,832	)		(43,832	)		(24,253	)		(68,085	)
Disposal of treasury shares		—		32		—		—			430			—			462			—			462
Others		—		5,486		—		1,335			—			3,420			10,241			(7,919	)		2,322
Total transactions with owners of the controlling company		—		14,168		—		1,335			430			(700,378	)		(684,445	)		(49,799	)		(734,244	)
Balance as of December 31, 2016	￦	482,403		1,407,247		996,919		(143,985	)		(1,533,468	)		41,125,712			42,334,828			3,430,441			45,765,269

See accompanying notes to the consolidated financial statements.

F-9

POSCO and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2015, 2016 and 2017

	Attributable to owners of the controlling company																			Non-controlling interests			Total
	Share capital		Capital surplus			Hybrid bonds		Reserves			Treasury shares			Retained earnings			Subtotal
	(in millions of Won)
Balance as of January 1, 2017	￦	482,403		1,407,247			996,919		(143,985	)		(1,533,468	)		41,125,712			42,334,828			3,430,441			45,765,269
Comprehensive income:
Profit		—		—			—		—			—			2,756,230			2,756,230			153,081			2,909,311
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax		—		—			—		—			—			(38,043	)		(38,043	)		(9,500	)		(47,543	)
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—			—		(214,794	)		—			—			(214,794	)		(2,594	)		(217,388	)
Net changes in the unrealized fair value of available-for-sale investments, net of tax		—		—			—		(45,953	)		—			—			(45,953	)		14,564			(31,389	)
Foreign currency translation differences, net of tax		—		—			—		(272,902	)		—			—			(272,902	)		8,207			(264,695	)
Gain or losses on valuation of derivatives, net of tax		—		—			—		(136	)		—			—			(136	)		(7	)		(143	)
Total comprehensive income		—		—			—		(533,785	)		—			2,718,187			2,184,402			163,751			2,348,153
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—			—		—			—			(459,987	)		(459,987	)		(42,909	)		(502,896	)
Interim dividends		—		—			—		—			—			(359,993	)		(359,993	)		—			(359,993	)
Changes in subsidiaries		—		—			—		—			—			—			—			(7,151	)		(7,151	)
Changes in ownership interests in subsidiaries		—		16,287			—		—			—			—			16,287			147,420			163,707
Interest of hybrid bonds		—		—			—		—			—			(43,600	)		(43,600	)		(24,187	)		(67,787	)
Disposal of treasury shares		—		126			—		—			414			—			540			—			540
Others		—		(1,639	)		—		(4,786	)		—			(5,661	)		(12,086	)		(1,031	)		(13,117	)
Total transactions with owners of the controlling company		—		14,774			—		(4,786	)		414			(869,241	)		(858,839	)		72,142			(786,697	)
Balance as of December 31, 2017	￦	482,403		1,422,021			996,919		(682,556	)		(1,533,054	)		42,974,658			43,660,391			3,666,334			47,326,725

See accompanying notes to the consolidated financial statements.

F-10

POSCO and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2015, 2016 and 2017

	Notes		2015			2016			2017
			(in millions of Won)
Cash flows from operating activities
Profit (loss)			￦	(116,215	)		1,032,065			2,909,311
Adjustments for:
Depreciation				2,836,663			2,835,843			2,887,646
Amortization				381,583			378,004			409,774
Finance income				(1,165,340	)		(882,905	)		(1,376,324	)
Finance costs				1,852,862			1,501,953			1,440,282
Income tax expense				266,560			379,544			1,185,740
Gain on disposal of property, plant and equipment				(22,730	)		(23,826	)		(32,145	)
Loss on disposal of property, plant and equipment				101,732			86,622			151,343
Impairment losses on property, plant and equipment				136,269			196,882			117,231
Gain on disposal of investments in subsidiaries, associates and joint ventures				(88,718	)		(23,305	)		(81,794	)
Loss on disposal of investments in subsidiaries, associates and joint ventures				18,996			22,499			19,985
Share of loss (profit) of equity-accounted investees				506,054			88,677			(10,540	)
Expenses related to post-employment benefits				245,402			333,139			199,926
Increase to provisions				86,903			189,914			215,383
Bad debt expenses				337,235			202,717			271,871
Loss on valuation of inventories				152,952			152,249			78,560
Impairment losses on goodwill and intangible assets				161,412			127,875			167,995
Gain on disposal of assets held for sale				(227,956	)		(23,112	)		(1,180	)
Loss on disposal of assets held for sale				190,357			254			608
Impairment losses on assets held for sale				133,547			24,890			—
Others, net				48,079			7,879			(33,092	)
				5,951,862			5,575,793			5,611,269
Changes in operating assets and liabilities		39		2,784,452			(404,570	)		(1,841,633	)
Interest received				198,193			206,839			244,980
Interest paid				(831,566	)		(691,264	)		(735,735	)
Dividends received				237,715			152,559			225,514
Income taxes paid				(622,612	)		(602,004	)		(806,396	)
Net cash provided by operating activities			￦	7,601,829			5,269,418			5,607,310

See accompanying notes to the consolidated financial statements.

F-11

POSCO and Subsidiaries

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2015, 2016 and 2017

	Notes		2015			2016			2017
			(in millions of Won)
Cash flows from investing activities
Acquisitions of short-term financial instruments			￦	(13,037,990	)		(18,578,809	)		(20,843,530	)
Proceeds from disposal of short-term financial instruments				10,595,379			17,177,409			19,146,634
Acquisitions of long-term financial instruments				(34,733	)		(8,249	)		(22,532	)
Increase in loans				(295,689	)		(603,332	)		(1,055,895	)
Collection of loans				308,906			557,064			667,045
Acquisitions of available-for-sale investments				(87,824	)		(328,151	)		(66,278	)
Proceeds from disposal of available-for-sale investments				308,161			280,066			1,006,856
Acquisitions of investments in associates and joint ventures				(77,155	)		(173,769	)		(60,277	)
Proceeds from disposal of investments in associates and joint ventures				11,813			7,914			74,881
Acquisitions of property, plant and equipment				(2,560,244	)		(2,324,112	)		(2,287,580	)
Proceeds from disposal of property, plant and equipment				59,031			44,330			39,183
Acquisitions of investment property				(61,478	)		(45,735	)		(69,169	)
Proceeds from disposal of investment property				1,120			11,624			5,771
Acquisitions of intangible assets				(289,148	)		(138,181	)		(343,423	)
Proceeds from disposal of intangible assets				12,832			8,672			28,502
Proceeds from disposal of assets held for sale				127,133			305,813			203,958
Increase in cash from (payment for) acquisition of business, net of cash acquired				—			4,503			(174,165	)
Cash received (decrease in cash) from disposal of business, net of cash transferred				469,576			21,223			(53,008	)
Others, net				15,634			27,093			(14,847	)
Net cash used in investing activities				(4,534,676	)		(3,754,627	)		(3,817,874	)
Cash flows from financing activities
Proceeds from borrowings				1,779,097			1,988,665			1,725,983
Repayment of borrowings				(3,509,970	)		(4,274,895	)		(3,136,016	)
Proceeds from (repayment of) short-term borrowings, net				(846,230	)		(885,861	)		558,083
Payment of cash dividends				(822,570	)		(708,970	)		(863,450	)
Payment of interest of hybrid bonds				(67,725	)		(68,097	)		(67,783	)
Capital contribution from non-controlling interests and proceeds from disposal of subsidiary while maintaining control				1,260,053			24,704			266,219
Capital deduction from non-controlling interests and additional acquisition of interests in subsidiaries				(10,810	)		(11,301	)		(26,288	)
Others, net				(23,446	)		(15,212	)		(22,276	)
Net cash used in financing activities		39		(2,241,601	)		(3,950,967	)		(1,565,528	)
Effect of exchange rate fluctuation on cash held				23,496			12,611			(58,997	)
Net increase (decrease) in cash and cash equivalents				849,048			(2,423,565	)		164,911
Cash and cash equivalents at beginning of the period		5		4,022,136			4,871,184			2,447,619
Cash and cash equivalents at end of the period		5	￦	4,871,184			2,447,619			2,612,530

See accompanying notes to the consolidated financial statements.

F-12

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2015, 2016 and 2017

1. General Information

General information about POSCO, its 40 domestic subsidiaries including POSCO ENGINEERING & CONSTRUCTION CO., LTD., 139 foreign subsidiaries including POSCO America Corporation (collectively “the Company”) and its 111 associates and joint ventures are as follows:

(a) The controlling company

POSCO, the controlling company, was incorporated on April 1, 1968, under the Commercial Code of the Republic of Korea to manufacture and sell steel rolled products and plates in the domestic and foreign markets.

The shares of POSCO have been listed on the Korea Exchange on June 10, 1988. POSCO owns and operates two steel plants (Pohang and Gwangyang) and one office in Korea and it also operates internationally through six of its overseas liaison offices.

As of December 31, 2017, POSCO’s shareholders are as follows:

Shareholder’s name	Number of shares		Ownership (%)
National Pension Service		9,660,885		11.08
Nippon Steel & Sumitomo Metal Corporation(*1)		2,894,712		3.32
BlackRock Institutional Trust Company, N.A.(*1)		2,483,875		2.85
Government of Singapore Investment Corp Private Limited		1,934,312		2.22
KB Financial Group Inc. and subsidiaries(*2)		1,919,361		2.20
Others		68,293,690		78.33
		87,186,835		100.00

(*1) Includes American Depository Receipts (ADRs) of POSCO, each of which represents 0.25 share of POSCO’s common share which has par value of ￦5,000 per share.

(*2) Includes shares held by subsidiaries pursuant to Articles of Incorporation.

As of December 31, 2017, the shares of POSCO are listed on the Korea Exchange, while its ADRs are listed on the New York Stock Exchange.

F-13

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) Consolidated subsidiaries

Details of consolidated subsidiaries as of December 31, 2016 and 2017 are as follows:

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
[Domestic]
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	Engineering and construction		52.80		—		52.80		52.80		—		52.80		Pohang
POSCO Processing & Service	Steel sales and trading		93.95		0.45		94.40		93.95		0.45		94.40		Seoul
POSCO COATED & COLOR STEEL Co., Ltd.	Coated steel manufacturing		56.87		—		56.87		56.87		—		56.87		Pohang
POSCO ICT	Computer hardware and software distribution		65.38		—		65.38		65.38		—		65.38		Pohang
POSCO Research Institute	Economic research and consulting		100.00		—		100.00		100.00		—		100.00		Seoul
POSMATE	Business facility maintenance		57.25		11.05		68.30		83.83		16.17		100.00		Seoul
POSCO A&C	Architecture and consulting		100.00		—		100.00		100.00		—		100.00		Seoul
POSCO Venture Capital Co., Ltd.	Investment in venture companies		95.00		—		95.00		95.00		—		95.00		Pohang
eNtoB Corporation	Electronic commerce		7.50		53.63		61.13		7.50		53.63		61.13		Seoul
POSCO CHEMTECH	Refractories manufacturing and sales		60.00		—		60.00		60.00		—		60.00		Pohang
POSCO-Terminal Co., Ltd.	Transporting and warehousing		51.00		—		51.00		51.00		—		51.00		Gwangyang
POSCO M-TECH	Packing materials manufacturing and sales		48.85		—		48.85		48.85		—		48.85		Pohang
POSCO ENERGY CO., LTD.	Generation of electricity		89.02		—		89.02		89.02		—		89.02		Seoul
POSCO NIPPON STEEL RHF JOINT VENTURE.CO.,Ltd.	Steel byproduct manufacturing and sales		70.00		—		70.00		70.00		—		70.00		Pohang
MegaAsset Co.,Ltd.	Real estate rental and sales		—		100.00		100.00		—		100.00		100.00		Incheon
Future Creation Fund Postech Early Stage account	Investment in venture companies		—		40.00		40.00		—		40.00		40.00		Seoul
POSCO WOMAN’S FUND	Investment in venture companies		—		40.00		40.00		—		40.00		40.00		Seoul
POSPOWER Co., Ltd.	Generation of electricity		—		100.00		100.00		—		100.00		100.00		Samcheok
Songdo Posco Family housing	House manufacturing and management		—		100.00		100.00		—		100.00		100.00		Incheon
Posco Group University	Education service and real estate business		100.00		—		100.00		100.00		—		100.00		Incheon
HOTEL LAONZENA	Hotel business		—		100.00		100.00		—		100.00		100.00		Daegu
Growth Ladder POSCO K-Growth Global Fund	Investment in venture companies		—		50.00		50.00		—		50.00		50.00		Pohang
2015 POSCO New technology II Fund	Investment in venture companies		—		25.00		25.00		—		25.00		25.00		Pohang

F-14

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
POCA STEM Co., Ltd	Stem cell medicine development		—		100.00		100.00		—		100.00		100.00	Seoul
Posco e&c Songdo International Building	Non-residential building rental		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO ES MATERIALS CO., Ltd.	Secondary and storage battery manufacturing		75.32		—		75.32		75.32		—		75.32	Gumi
Poscoene	Refuse derived fuel and power generation		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO Humans	Construction		90.30		—		90.30		90.30		—		90.30	Pohang
Mapo Hibroad Parking co., Ltd.	Construction		—		70.99		70.99		—		71.00		71.00	Seoul
BLUE O&M Co.,Ltd.	Engineering service		—		100.00		100.00		—		100.00		100.00	Pohang
Busan E&E Co,. Ltd.	Refuse derived fuel and power generation		70.00		—		70.00		70.00		—		70.00	Busan
POSCO Family Strategy Fund	Investment in venture companies		69.91		30.09		100.00		69.91		30.09		100.00	Pohang
POSCO DAEWOO Corporation	Trading, energy & resource development and others		60.31		—		60.31		62.90		0.04		62.94	Seoul
Pohang Scrap Recycling Distribution Center Co., Ltd.	Steel processing and sales		—		51.00		51.00		—		51.00		51.00	Pohang
PSC Energy Global Co., Ltd.	Investment in energy industry		—		100.00		100.00		—		100.00		100.00	Pohang
Suncheon Eco Trans Co., Ltd	Train manufacturing and management		100.00		—		100.00		100.00		—		100.00	Suncheon
POSCO Research & Technology	Intellectual Property Services and consulting		—		—		—		100.00		—		100.00	Seoul
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2	Private equity trust		—		—		—		97.47		—		97.47	Seoul
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5	Private equity trust		—		—		—		—		99.67		99.67	Seoul
Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust	Private equity trust		—		—		—		99.01		—		99.01	Seoul
IT Engineering CO. Ltd	Automotive engineering service		—		17.00		17.00		—		—		—	Seoul
POSCO Engineering CO.,Ltd	Construction and engineering service		—		95.56		95.56		—		—		—	Incheon
[Foreign]
POSCO America Corporation	Steel trading		99.45		0.55		100.00		99.45		0.55		100.00	USA
POSCO AUSTRALIA PTY LTD	Raw material sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Canada Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO Asia Co., Ltd.	Steel and raw material trading		100.00		—		100.00		100.00		—		100.00	China
POSCO-CTPC Co., Ltd.	Steel manufacturing and sales		56.60		43.40		100.00		56.60		43.40		100.00	China

F-15

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
POSCO E&C Vietnam Co., Ltd.	Steel structure manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Vietnam
Zhangjiagang Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		58.60		23.88		82.48		58.60		23.88		82.48	China
POSCO(Guangdong) Coated Steel Co., Ltd.	Plating steel sheet manufacturing and sales		87.04		10.04		97.08		87.04		10.04		97.08	China
POSCO (Thailand) Company Limited	Steel manufacturing and sales		85.62		14.38		100.00		88.58		11.42		100.00	Thailand
Myanmar POSCO Steel Co., Ltd	Zinc relief manufacturing and sales		70.00		—		70.00		70.00		—		70.00	Myanmar
POSCO-MKPC SDN BHD	Steel manufacturing and sales		44.69		25.31		70.00		44.69		25.31		70.00	Malaysia
Qingdao Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		70.00		30.00		100.00		70.00		30.00		100.00	China
POSCO(Suzhou) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-China Qingdao Processing Center Co., Ltd.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
POS-ORE PTY LTD	Iron ore sales and sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-China Holding Corp.	Holding company		100.00		—		100.00		100.00		—		100.00	China
POSCO JAPAN Co., Ltd.	Steel trading		100.00		—		100.00		100.00		—		100.00	Japan
POS-CD PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POS-GC PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-India Private Limited	Steel manufacturing and sales		99.99		—		99.99		99.99		—		99.99	India
POSCO-India Pune Processing Center. Pvt. Ltd.	Steel manufacturing and sales		65.00		—		65.00		65.00		—		65.00	India
POSCO Japan PC CO., LTD	Steel manufacturing and sales		—		86.12		86.12		—		86.12		86.12	Japan
POSCO-CFPC Co., Ltd.	Steel manufacturing and sales		39.60		60.40		100.00		39.60		60.40		100.00	China
POSCO E&C CHINA Co., Ltd.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	China
POSCO MPPC S.A. de C.V.	Steel manufacturing and sales		—		95.00		95.00		21.02		75.29		96.31	Mexico
Zhangjigang Pohang Port Co., Ltd.	Loading and unloading service		—		100.00		100.00		—		100.00		100.00	China
POSCO-VIETNAM Co., Ltd.	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Vietnam
POSCO MEXICO S.A. DE C.V.	Automotive steel sheet manufacturing and sales		84.84		15.16		100.00		84.84		15.16		100.00	Mexico
POSCAN Elkview	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO-Poland Wroclaw Processing Center Sp. z o. o.	Steel manufacturing and sales		60.00		—		60.00		60.00		—		60.00	Poland
POS-NP PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO RUS LLC	Trading and business development		90.00		10.00		100.00		90.00		10.00		100.00	Russia

F-16

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
POSCO DAEWOO WAIGAIQIAO SHANGHAI CO., LTD	Intermediary trade & bonded warehouse operation		—		100.00		100.00		—		100.00		100.00	China
PT. Bio Inti Agrindo	Forest resources development		—		85.00		85.00		—		85.00		85.00	Indonesia
POSCO ENGINEERING AND CONSTRUCTION AUSTRALIA PTY LTD	Iron ore development and sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd.	Steel manufacturing and sales		50.00		10.00		60.00		50.00		10.00		60.00	China
POSCO Thainox Public Company Limited	STS cold-rolled steel manufacturing and sales		84.93		—		84.93		84.88		—		84.88	Thailand
Hunchun Posco Hyundai Logistics	Logistics		—		80.00		80.00		—		80.00		80.00	China
POSCO DAEWOO VIETNAM CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO(Chongqing) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
SUZHOU POSCO-CORE TECHNOLOGY CO., LTD.	Component manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
PT.Krakatau Posco Chemtech Calcination	Quicklime manufacturing and sales		—		80.00		80.00		—		80.00		80.00	Indonesia
POSCO AFRICA (PROPRIETARY) LIMITED	Mine development		100.00		—		100.00		100.00		—		100.00	South Africa
POSCO ICT BRASIL	IT service and engineering		—		100.00		100.00		—		100.00		100.00	Brazil
LA-SRDC	Scrap manufacturing		—		100.00		100.00		—		100.00		100.00	USA
DONG FANG JIN HONG	Real estate development, rental and management		—		100.00		100.00		—		100.00		100.00	China
POSCO AMERICA COMERCIALIZADORA S DE RL DE CV	Human resource service		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO(Guangdong) Automotive Steel Co., Ltd.	Steel manufacturing and sales		83.64		10.00		93.64		83.64		10.00		93.64	China
POSCO-Malaysia SDN. BHD.	Steel manufacturing and sales		81.79		13.63		95.42		81.79		13.63		95.42	Malaysia
PT KRAKATAU BLUE WATER	Wastewater treatment facilities operation and maintenance		—		67.00		67.00		—		67.00		67.00	Indonesia
POSCO DAEWOO MYANMAR CORPORATION LIMITED	Trading business		—		100.00		100.00		—		100.00		100.00	Myanmar

F-17

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
POSCO-Italy Processing Center	Stainless steel sheet manufacturing and sales		80.00		10.00		90.00		80.00		10.00		90.00	Italy
POSCO DAEWOO E&P CANADA CORPORATION	Crude oil and natural gas mining		—		100.00		100.00		—		100.00		100.00	Canada
Myanmar POSCO C&C Company, Limited.	Steel manufacturing and sales		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO ICT VIETNAM	IT service and electric control engineering		—		100.00		100.00		—		100.00		100.00	Vietnam
Daewoo Global Development. Pte., Ltd	Real estate development		—		51.00		51.00		—		81.51		81.51	Myanmar
Myanmar POSCO Engineering & Construction Company, Limited.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Myanmar
POS-Minerals Corporation	Mine development management and sales		—		100.00		100.00		—		100.00		100.00	USA
POSCO(Wuhu) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		68.57		31.43		100.00		68.57		31.43		100.00	China
POSCO Engineering and Construction India Private Limited	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	India
POSCO COATED STEEL (THAILAND) CO., LTD.	Automotive steel sheet manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Thailand
Daewoo Amara Company Limited	Real estate development		—		98.54		98.54		—		85.00		85.00	Myanmar
Daewoo Power and Infra (PTY) Limited	Electricity		—		100.00		100.00		—		100.00		100.00	South Africa
POSMATE-CHINA CO., LTD	Business facility maintenance		—		100.00		100.00		—		100.00		100.00	China
Daewoo Precious Resources Co., Ltd.	Resources development		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO-Mexico Villagran Wire-rod Processing Center	Steel manufacturing and sales		56.75		10.00		66.75		56.75		10.00		66.75	Mexico
POSCO-CDSFC	Steel structure manufacturing		50.20		49.80		100.00		50.20		49.80		100.00	China
POSCO ChengDu Processing Center	Steel manufacturing and sales		33.00		10.00		43.00		33.00		10.00		43.00	China
POSCO SUZHOU Processing Center Co., Ltd.	Steel manufacturing and sales		30.00		70.00		100.00		30.00		70.00		100.00	China
POSCO E&C SMART S DE RL DE CV	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO Philippine Manila Processing Center, Inc.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C HOLDINGS CO., Ltd.	Holding company		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO E&C (THAILAND) CO., Ltd.	Construction and engineering		—		100.00		100.00		—		100.00		100.00	Thailand

F-18

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
Daewoo Power PNG Ltd.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT.Krakatau Posco Social Enterprise	Social enterprise		—		100.00		100.00		—		100.00		100.00	Indonesia
Ventanas Philippines Construction Inc	Construction		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C Mongolia	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Mongolia
POSCO Gulf SFC LLC	Steel manufacturing and sales		—		81.93		81.93		—		97.76		97.76	United Arab Emirates
SANPU TRADING Co., Ltd.	Raw material trading		—		70.00		70.00		—		70.00		70.00	China
Zhangjiagang BLZ Pohang International Trading	Steel Intermediate trade		—		100.00		100.00		—		100.00		100.00	China
POSCO MESDC S.A. DE C.V.	Logistics & Steel sales		—		56.80		56.80		—		56.80		56.80	Mexico
POSCO ICT-China	IT service and DVR business		—		100.00		100.00		—		100.00		100.00	China
Pos-Sea Pte Ltd	Steel Intermediate trade		—		67.54		67.54		—		100.00		100.00	Singapore
POSCO Europe Steel Distribution Center	Logistics & Steel sales		50.00		20.00		70.00		50.00		20.00		70.00	Slovenia
POSCO ENGINEERING (THAILAND) CO., LTD.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO VST CO., LTD.	Stainless steel sheet manufacturing and sales		95.65		—		95.65		95.65		—		95.65	Vietnam
POSCO Maharashtra Steel Private Limited	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	India
POSCO India Chennai Steel Processing Center Pvt. Ltd.	Steel manufacturing and sales		100.00		—		100.00		93.34		1.98		95.32	India
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Turkey
POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO VNPC Co., Ltd.)	Steel manufacturing and sales		70.00		—		70.00		83.54		5.29		88.83	Vietnam
POSCO(Liaoning) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-Indonesia Jakarta Processing Center	Steel manufacturing and sales		65.00		20.00		85.00		65.00		20.00		85.00	Indonesia
POSCO E&C VENEZUELA C.A.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Venezuela
PT.MRI	Mine development		65.00		—		65.00		65.00		—		65.00	Indonesia
POSCO TMC INDIA PRIVATE LIMITED	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	India
POSCO-AAPC	Steel manufacturing and sales		—		97.80		97.80		—		97.80		97.80	USA

F-19

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
PT PEN INDONESIA	Construction		—		100.00		100.00		—		100.00		100.00	Indonesia
POSCO(Yantai) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO India Steel Distribution Center Private Ltd.	Steel logistics		—		100.00		100.00		—		100.00		100.00	India
POSCO China Dalian Plate Processing Center Co., Ltd.	Plate manufacturing and sales		80.00		10.00		90.00		80.00		10.00		90.00	China
POSCO-South Asia Company Limited	Steel sales		100.00		—		100.00		100.00		—		100.00	Thailand
POSCO SS-VINA Co., Ltd	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Vietnam
PT.POSCO ICT INDONESIA	IT service and electric control engineering		—		66.99		66.99		—		66.99		66.99	Indonesia
POSCO NCR Coal Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO WA PTY LTD	Iron ore sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Engineering and Construction - UZ	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO AUSTRALIA GP PTY LIMITED	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO DAEWOO POWER (PNGPOM) LTD.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT. KRAKATAU POSCO ENERGY	Electricity production construction and operation		—		90.00		90.00		—		90.00		90.00	Indonesia
POSCO DAEWOO AMERICA CORP.	Trading business		—		100.00		100.00		—		100.00		100.00	USA
POSCO DAEWOO DEUTSCHLAND GMBH	Trading business		—		100.00		100.00		—		100.00		100.00	Germany
POSCO DAEWOO JAPAN Corp	Trading business		—		100.00		100.00		—		100.00		100.00	Japan
POSCO DAEWOO SINGAPORE PTE LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	Singapore
POSCO DAEWOO ITALIA S.R.L.	Trading business		—		100.00		100.00		—		100.00		100.00	Italy
POSCO DAEWOO CHINA CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	China
Daewoo Textile LLC	Textile manufacturing		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO DAEWOO AUSTRALIA HOLDINGS PTY. LTD.	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO MAURITIUS LIMITED	Coal development and sales		—		100.00		100.00		—		100.00		100.00	Mauritius
PT. KRAKATAU POSCO	Steel manufacturing and sales		70.00		—		70.00		70.00		—		70.00	Indonesia
POSCO DAEWOO MEXICO S.A. de C.V.	Trading business		—		100.00		100.00		—		100.00		100.00	Mexico
Daewoo International Guangzhou Corp.	Trading business		—		100.00		100.00		—		100.00		100.00	China

F-20

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
POSCO DAEWOO MALAYSIA SDN BHD	Trading business		—		100.00		100.00		—		100.00		100.00	Malaysia
PT.POSCO INDONESIA INTI	Mine development		99.99		—		99.99		99.99		—		99.99	Indonesia
POSCO DAEWOO SHANGHAI CO., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	China
PGSF, L.P.	Investment in bio tech Industry		—		100.00		100.00		—		100.00		100.00	USA
POSCO DAEWOO INDIA PVT., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	India
POSCO(Dalian) IT Center Development Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	China
PT. POSCO E&C INDONESIA	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Indonesia
HUME COAL PTY LTD	Raw material manufacturing		—		100.00		100.00		—		100.00		100.00	Australia
Brazil Sao Paulo Steel Processing Center	Steel manufacturing and sales		—		76.00		76.00		—		76.00		76.00	Brazil
DAESAN (CAMBODIA) Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Cambodia
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	Construction		—		100.00		100.00		—		100.00		100.00	Brazil
POSCO ASSAN TST STEEL INDUSTRY	Steel manufacturing and sales		60.00		10.00		70.00		60.00		10.00		70.00	Turkey
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Hong Kong
Zhangjiagang Pohang Refractories Co., Ltd. (*1)	Refractory materials sales & furnace maintenance		—		—		—		—		51.00		51.00	China
Golden Lace DAEWOO Company Limited	Rice processing		—		—		—		—		60.00		60.00	Myanmar
POSCO RU Limited Liability Company	Trade and business development		—		—		—		100.00		—		100.00	Russia
POSCO DAEWOO UKRAINE LLC	Grain sales		—		—		—		—		100.00		100.00	Ukraine
KIS Devonian Canada Corporation	Petroleum gas extraction		—		—		—		—		100.00		100.00	Canada
POSEC Hawaii, Inc.	Real estate Industry		—		100.00		100.00		—		—		—	USA
POSCO India Delhi Steel Processing Center Private Limited	Steel manufacturing and sales		66.40		10.00		76.40		—		—		—	India
USA-SRDC	Scrap sales		—		100.00		100.00		—		—		—	USA
POSCO-Vietnam Processing Center Co., Ltd.	Steel manufacturing and sales		87.07		4.98		92.05		—		—		—	Vietnam
POSCO MAPC SA DE CV	Automotive steel sheet manufacturing and sales		80.00		20.00		100.00		—		—		—	Mexico
Yingkou Puxiang Trade Co.,Ltd.	Refractory quality test & import and export		—		100.00		100.00		—		—		—	China
SANTOS CMI Guatemala S.A.	Construction and engineering service		—		100.00		100.00		—		—		—	Guatemala

F-21

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd.	Steel manufacturing and sales		100.00		—		100.00		—		—		—	India
COINSA INGENIERIA Y PETROQUIMICA S.R.L	Construction		—		50.00		50.00		—		—		—	Bolivia
POSCO VIETNAM HOLDINGS CO., LTD	Holding company		79.28		20.72		100.00		—		—		—	Vietnam
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation) (*2)	Resources development		—		100.00		100.00		—		—		—	Canada
Chongqing POSCO CISL Automotive Steel Co., Ltd.	Automotive steel sheet manufacturing and sales		51.00		—		51.00		—		—		—	China
POSCO YongXin Rare Earth Metal Co., Ltd.	Magnet material manufacturing and sales		—		51.60		51.60		—		—		—	China
PT. POSCO MTECH INDONESIA	Steelmaking materials manufacturing and sales		—		99.98		99.98		—		—		—	Indonesia
POSCO (Zhangjiagang) STS Processing Center Co., Ltd	Steel manufacturing and sales		—		100.00		100.00		—		—		—	China
EPC EQUITIES LLP	Engineering, procurement and construction		—		80.00		80.00		—		—		—	England
SANTOS CMI CONSTRUCTION TRADING LLP	Engineering, procurement and construction		—		99.90		99.90		—		—		—	England
SANTOS CMI INC. USA	Engineering, procurement and construction		—		100.00		100.00		—		—		—	USA
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA	Engineering, procurement and construction		—		99.98		99.98		—		—		—	Brazil
SANTOS CMI PERU S.A.	Engineering, procurement and construction		—		99.99		99.99		—		—		—	Peru
SANTOS CMI CONSTRUCCIONES S.A.	Engineering, procurement and construction		—		100.00		100.00		—		—		—	Uruguay
GENTECH INTERNATIONAL INC.	Engineering, procurement and construction		—		90.00		90.00		—		—		—	Panama
SANTOS CMI S.A.	Engineering, procurement and construction		—		80.00		80.00		—		—		—	Ecuador
SANTOS CMI CONSTRUCCIONES DE CHILE S.A.	Engineering, procurement and construction		—		99.00		99.00		—		—		—	Chile
COMPANIA DE AUTOMATIZACION &CONTROL, GENESYS S.A.	Engineering, procurement and construction		—		90.00		90.00		—		—		—	Ecuador
POSCO Electrical Steel India Private Limited	Electrical steel manufacturing and sales		100.00		—		100.00		—		—		—	India

(*1) Reclassified to subsidiary from associate during the year ended December 31, 2017.

(*2) Reclassified to joint venture from subsidiary during the year ended December 31, 2017.

F-22

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

The equity of controlling company increased by ￦8,650 million (POSCO Processing & Service and others) and ￦16,288 million (POSCO DAEWOO Corporation, POSMATE and others) in 2016 and 2017, respectively, as a result of changes in the Company’s ownership interests in subsidiaries that did not result in a loss of control.

Cash dividends paid to POSCO by subsidiaries in 2015, 2016 and 2017 amounted to ￦437,194 million, ￦75,830 million and ￦70,087 million, respectively.

As of December 31, 2017, there are no restrictions on the ability of subsidiaries to transfer funds to the controlling company, such as in the form of cash dividends, repayment of loans or payment of advances.

(c) Details of non-controlling interest as of and for the years ended December 31, 2015, 2016 and 2017 are as follows:

1) December 31, 2015

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	3,930,857			441,999			360,812			5,115,325			590,460			9,648,917			20,088,370
Non-current assets		4,777,482			3,363,935			248,549			1,756,367			3,333,351			7,776,264			21,255,948
Current liabilities		(3,568,714	)		(1,004,002	)		(106,167	)		(3,125,697	)		(663,945	)		(9,692,004	)		(18,160,529	)
Non-current liabilities		(1,941,909	)		(2,315,554	)		(5,405	)		(768,529	)		(2,420,547	)		(2,567,980	)		(10,019,924	)
Equity		3,197,716			486,378			497,789			2,977,466			839,319			5,165,197			13,163,865
Non-controlling interests		1,269,096			145,913			199,116			1,405,391			535,878			1,182,137			4,737,531
Sales		16,890,723			1,227,266			1,175,272			6,866,802			1,909,919			25,784,254			53,854,236
Profit (loss) for the period		79,092			(398,438	)		35,516			108,895			15,831			(835,389	)		(994,493	)
Profit (loss) attributable to non-controlling interests		31,390			(119,531	)		14,206			51,399			1,738			(247,106	)		(267,904	)
Cash flows from operating activities		433,493			(13,595	)		19,921			434,257			6,075			(72,371	)		807,780
Cash flows from investing activities		(74,644	)		(8,994	)		25,318			21,075			(20,980	)		(110,712	)		(168,937	)
Cash flows from financing activities (before dividends to non-controlling interest)		(340,532	)		18,886			66			69,615			11,572			289,715			49,322
Dividend to non-controlling interest		(22,597	)		—			(4,135	)		(703	)		(24,125	)		(145,582	)		(197,142	)
Effect of exchange rate fluctuation on cash held		430			83			—			819			—			3,502			4,834
Net increase (decrease) in cash and cash equivalents		(3,850	)		(3,620	)		41,170			525,063			(27,458	)		(35,448	)		495,857

F-23

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) December 31, 2016

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	4,038,313			460,376			397,370			5,163,436			713,039			9,696,140			20,468,674
Non-current assets		4,510,085			3,304,292			243,401			1,710,398			3,038,665			7,749,277			20,556,118
Current liabilities		(3,662,811	)		(1,120,077	)		(109,016	)		(3,284,090	)		(937,668	)		(9,669,053	)		(18,782,715	)
Non-current liabilities		(1,681,182	)		(2,337,612	)		(2,337	)		(855,791	)		(2,172,226	)		(2,856,498	)		(9,905,646	)
Equity		3,204,405			306,979			529,418			2,733,953			641,810			4,919,866			12,336,431
Non-controlling interests		1,271,750			92,094			211,767			1,290,450			514,200			945,962			4,326,223
Sales		15,417,550			1,244,711			1,076,455			5,352,395			1,657,890			23,251,563			48,000,564
Profit (loss) for the period		113,832			(187,151	)		41,829			(760,187	)		(130,809	)		(461,034	)		(1,383,520	)
Profit (loss) attributable to non-controlling interests		45,177			(56,145	)		16,732			(358,815	)		(14,357	)		(312,297	)		(679,705	)
Cash flows from operating activities		337,338			45,672			30,295			(211,182	)		18,107			53,050			273,280
Cash flows from investing activities		(35,054	)		(8,804	)		(42,021	)		(102,939	)		(1,047	)		(253,206	)		(443,071	)
Cash flows from financing activities (before dividends to non-controlling interest)		(295,226	)		(36,286	)		(1,250	)		(20,953	)		(2,875	)		204,797			(151,793	)
Dividend to non-controlling interest		(22,597	)		—			(4,726	)		(14,800	)		(24,378	)		(7,349	)		(73,850	)
Effect of exchange rate fluctuation on cash held		10			67			1			760			—			1,687			2,525
Net increase (decrease) in cash and cash equivalents		(15,529	)		649			(17,701	)		(349,114	)		(10,193	)		(1,021	)		(392,909	)

F-24

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

3) December 31, 2017

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	4,483,544			557,041			441,325			4,878,251			1,054,538			8,579,813			19,994,512
Non-current assets		4,590,394			2,771,504			316,724			2,444,616			2,859,824			6,676,559			19,659,621
Current liabilities		(4,221,443	)		(1,237,255	)		(145,649	)		(3,896,680	)		(785,462	)		(8,313,902	)		(18,600,391	)
Non-current liabilities		(1,549,013	)		(1,933,247	)		(970	)		(833,403	)		(2,200,065	)		(2,048,454	)		(8,565,152	)
Equity		3,303,482			158,043			611,430			2,592,784			928,835			4,894,016			12,488,590
Non-controlling interests		1,224,303			47,413			244,572			1,223,816			762,390			974,941			4,477,435
Sales		20,891,526			1,635,837			1,163,918			5,794,532			1,578,026			23,547,072			54,610,911
Profit (loss) for the period		115,321			(117,729	)		101,019			169,011			70,795			258,053			596,470
Profit (loss) attributable to non-controlling interests		42,739			(35,318	)		40,408			79,775			7,770			39,605			174,979
Cash flows from operating activities		128,875			(27,817	)		20,042			(84,840	)		30,295			140,418			206,973
Cash flows from investing activities		(86,365	)		(5,502	)		(18,699	)		(171,924	)		(2,792	)		(63,621	)		(348,903	)
Cash flows from financing activities (before dividends to non-controlling interest)		(19,295	)		31,782			8			150,801			220,317			(38,090	)		345,523
Dividend to non-controlling interest		(22,597	)		—			(7,088	)		—			(24,183	)		(12,777	)		(66,645	)
Effect of exchange rate fluctuation on cash held		(459	)		(147	)		(6	)		(3,541	)		—			(15,532	)		(19,685	)
Net increase (decrease) in cash and cash equivalents		159			(1,684	)		(5,743	)		(109,504	)		223,637			10,398			117,263

F-25

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) Details of associates and joint ventures

1) Associates

Details of associates as of December 31, 2016 and 2017 are as follows:

		Ownership (%)
Investee	Category of business	2016		2017		Region
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	Investment in new technologies		29.37		31.14		Seoul
POSCO PLANTEC Co., Ltd. (*2)	Construction of industrial plant		73.94		73.94		Ulsan
SNNC	Raw material manufacturing and sales		49.00		49.00		Gwangyang
QSONE Co.,Ltd.	Real estate rental and facility management		50.00		50.00		Seoul
Chun-cheon Energy Co., Ltd	Electricity generation		29.90		45.67		Chuncheon
Incheon-Gimpo Expressway Co., Ltd. (*1)	Construction		20.04		18.26		Anyang
BLUE OCEAN Private Equity Fund	Private equity financial		27.52		27.52		Seoul
UITrans LRT Co., Ltd.	Transporting		38.19		38.19		Seoul
Keystone NO. 1. Private Equity Fund	Private equity financial		40.45		40.45		Seoul
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd	Real estate development		29.53		29.53		Chungju
Daesung Steel (*1)	Steel sales		17.54		17.54		Busan
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund (*1)	Investment in new technologies		12.50		12.50		Seoul
KONES, Corp.	Technical service		41.67		41.67		Gyeongju
Gale International Korea, LLC	Real estate rental		29.90		29.90		Seoul
Pohang Techno Valley PFV Corporation (*3)	Real estate development, supply and rental		30.28		57.39		Pohang
Gunggi Green Energy (*1)	Electricity generation		19.00		19.00		Hwaseong
Pohang Special Welding Co.,Ltd.	Welding material and tools manufacturing and sales		50.00		50.00		Pohang
KC Chemicals CORP (*1)	Machinery manufacturing		19.00		19.00		Hwaseong
Posco-IDV Growth Ladder IP Fund (*1)	Investment in new technologies		17.86		17.86		Seoul
DAEHO GLOBAL MANAGEMENT CO., LTD.	Investment advisory service		35.82		35.82		Pohang
Clean Gimpo Co., Ltd.	Construction		29.58		29.58		Gimpo
Postech Early Stage Fund (*1)	Investment in new technologies		10.00		10.00		Pohang
POSCO Energy Valley Fund	Investment in new technologies		20.00		20.00		Pohang
Pureun Tongyeong Enviro Co., Ltd.	Sewerage treatment		20.40		20.40		Tongyeong
Posgreen Co., Ltd. (*1)	Lime and plaster manufacturing		19.00		19.00		Gwangyang
Pohang E&E Co,. Ltd.	Investment in waste energy		30.00		30.00		Pohang
POSTECH Social Enterprise Fund (*1)	Investment in new technologies		9.17		9.17		Seoul
Applied Science Corp.	Machinery manufacturing		24.88		23.87		Paju
Noeul Green Energy (*1)	Electricity generation		10.00		10.00		Seoul
Pohang Techno Valley AMC	Construction		29.50		29.50		Pohang
New Songdo International City Development, LLC	Real estate rental		29.90		29.90		Seoul
Mokpo Deayang Industrial Corporation	Real estate development and rental		27.40		27.40		Mokpo
Clean Iksan Co., Ltd.	Construction		23.50		23.50		Iksan
Innovalley Co., Ltd.	Real estate development		28.77		28.77		Yongin
Pure Gimpo Co., Ltd.	Construction		28.79		28.79		Seoul
Garolim Tidal Power Plant Co.,Ltd	Tidal power plant construction and management		32.13		32.13		Seosan
2016 PoscoPlutus New Technology Investment Fund	Investment in new technologies		25.17		25.17		Seoul
Hyundai Invest Guggenheim CLO Private Special Asset Investment Trust II	Investment in new technologies		38.47		38.47		Seoul

F-26

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

		Ownership (%)
Investee	Category of business	2016		2017		Region
PoscoPlutus Bio Fund (*1)	Investment in new technologies		11.97		11.97		Seoul
PoscoPlutus Project Fund (*1)	Investment in new technologies		11.91		11.91		Seoul
Posco Agrifood Export Investment Fund	Investment in new technologies		30.00		30.00		Seoul
PoscoPlutus Project II Investment Fund (*1)	Investment in new technologies		0.61		0.61		Seoul
Posco Culture Contents Fund	Investment in new technologies		31.67		31.67		Seoul
PCC Centroid 1st Fund (*4)	Investment in new technologies		—		24.10		Seoul
PCC Amberstone Private Equity Fund I (*1,4)	Investment in new technologies		—		9.71		Seoul
POSCO Advanced Technical Staff Fund (*1,4)	Investment in new technologies		—		15.87		Seoul
POSCO 4th Industrial Revolution Fund (*4)	Investment in new technologies		—		20.00		Seoul
METAPOLIS Co.,Ltd. (*6)	Multiplex development		40.05		—		Hwaseong
Universal Studios Resort Asset Management Corporation (*5)	Real estate services		26.17		—		Seoul
Busan-Gimhae Light Rail Transit Co., Ltd. (*5)	Transporting		25.00		—		Gimhae
[Foreign]
South-East Asia Gas Pipeline Company Ltd.	Pipeline construction and management		25.04		25.04		Myanmar
AES-VCM Mong Duong Power Company Limited	Electricity generation		30.00		30.00		Vietnam
7623704 Canada Inc. (*1)	Investments management		10.40		10.40		Canada
Eureka Moly LLC	Raw material manufacturing and sales		20.00		20.00		USA
AMCI (WA) PTY LTD	Iron ore sales & mine development		49.00		49.00		Australia
Nickel Mining Company SAS	Raw material manufacturing and sales		49.00		49.00		New Caledonia
NCR LLC	Coal sales		29.41		29.41		Canada
KOREA LNG LTD.	Gas production and sales		20.00		20.00		England
PT. Batutua Tembaga Raya	Raw material manufacturing and sales		24.10		22.00		Indonesia
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd	Tinplate manufacturing and sales		34.00		34.00		China
PT. Wampu Electric Power	Construction and civil engineering		20.00		20.00		Indonesia
POSCO SeAH Steel Wire(Nantong) Co., Ltd.	Steel processing and sales		25.00		25.00		China
VSC POSCO Steel Corporation	Steel processing and sales		50.00		50.00		Vietnam
IMFA ALLOYS FINLEASE LTD	Raw material manufacturing and sales		24.00		24.00		India
General Medicines Company Ltd.	Medicine manufacturing and sales		33.00		33.00		Sudan
PT.INDONESIA POS CHEMTECH CHOSUN Ref	Refractory manufacturing and sales		30.19		30.19		Indonesia
POSK(Pinghu) Steel Processing Center Co., Ltd.	Steel processing and sales		20.00		20.00		China
SHANGHAI LANSHENG DAEWOO CORP.	Trading		49.00		49.00		China
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd	Steel processing and sales		25.00		25.00		China
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.	Trading		49.00		49.00		China
PT. Tanggamus Electric Power (*1)	Construction and civil engineering		17.50		17.50		Indonesia
NS-Thainox Auto Co., Ltd.	Steel manufacturing and sales		49.00		49.00		Vietnam
Hamparan Mulya	Resource development		45.00		45.00		Indonesia
Sebang Steel	Scrap sales		49.00		49.00		Japan
GLOBAL KOMSCO Daewoo LLC	Cotton celluloid manufacturing and sales		35.00		35.00		Uzbekistan
POSCO-Poggenamp Electrical Steel Pvt. Ltd.	Steel manufacturing and sales		26.00		26.00		India
KIRIN VIETNAM CO., LTD (*1)	Panel manufacturing		19.00		19.00		Vietnam
POSCHROME (PROPRIETARY) LIMITED	Raw material manufacturing and sales		50.00		50.00		South Africa
CAML RESOURCES PTY LTD	Raw material manufacturing and sales		33.34		33.34		Australia
KG Power(M) SDN. BHD	Energy & resource development		20.00		20.00		Malaysia
LI3 ENERGY INC	Energy & resource development		26.06		26.06		Peru

F-27

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

		Ownership (%)
Investee	Category of business	2016		2017		Region
LLP POSUK Titanium	Titanium manufacturing and sales		36.83		36.83	Kazakhstan
POS-SeAH Steel Wire (Thailand) Co., Ltd.	Steel manufacturing and sales		25.00		25.00	Thailand
Jupiter Mines Limited (*1)	Energy & resource development		17.08		17.06	Australia
KRAKATAU POS-CHEM DONG-SUH CHEMICAL (*1)	Chemical by-product manufacturing and sales		19.00		19.00	Indonesia
SAMHWAN VINA CO., LTD (*1,4)	Steel manufacturing and sales		—		19.00	Vietnam
JB CLARK HILLS (*4)	Construction		—		25.00	Philippines
Saudi-Korean Company for Maintenance Properties Management LLC (*1,4)	Building management		—		19.00	Saudi Arabia
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. (*5)	Highway construction and new town development		50.00		—	Vietnam
Fifth Combined Heat and Power Plant LLC (*5)	Thermal power generation		30.00		—	Mongolia
Chongqing CISL High Strength Cold Rolling Steel Co., Ltd. (*6)	Steel manufacturing and sales		10.00		—	China

(*1) Considering the composition of board of directors, the Company is able to exercise significant influence even though the Company’s percentage of ownership is below 20%.

(*2) On September 30, 2015, in order to improve its financial standing and normalize operation, the associates reached a workout agreement with its Creditor Financial Institutions Committee. As a result, the Company lost its control and classified its shares as investment in associate.

(*3) Considering the composition of board of directors, the Company does not have control and classified its shares as investment in an associate, even though the Company’s percentage of ownership is over 50%.

(*4) These associates were newly established or acquired in 2017.

(*5) Excluded from associates due to the disposal of shares during the year ended December 31, 2017.

(*6) Excluded from associates due to loss of significant influence during the year ended December 31, 2017.

F-28

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) Joint ventures

Details of joint ventures as of December 31, 2016 and 2017 are as follows:

		Ownership (%)
Investee	Category of business	2016		2017		Region
[Domestic]
POSCO MITSUBISHI CARBON TECHNOLOGY	Steel processing and sales		60.00		60.00		Gwangyang
POSCO-SGI Falcon Pharmaceutic Bio Secondary Fund 1 (*1)	Investment in new technologies		—		24.55		Seoul
POSCO-KB Shipbuilding Restructuring Fund (*1)	Investment in new technologies		—		18.75		Seoul
POSCO-NSC Venture Fund (*1)	Investment in new technologies		—		16.67		Seoul
PCC L&K New Technology 1st Fund (*1)	Investment in new technologies		—		10.00		Seoul
PoscoPlutus Project 3rd Investment Fund (*1)	Investment in new technologies		—		5.96		Seoul
[Foreign]
Roy Hill Holdings Pty Ltd	Energy & resource development		12.50		12.50		Australia
POSCO-NPS Niobium LLC	Mine development		50.00		50.00		USA
CSP — Compania Siderurgica do Pecem	Steel manufacturing and sales		20.00		20.00		Brazil
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.	Steel processing and sales		25.00		25.00		China
KOBRASCO	Steel materials manufacturing and sales		50.00		50.00		Brazil
DMSA/AMSA	Energy & resource development		4.00		4.00		Madagascar
PT. POSMI Steel Indonesia	Steel processing and sales		36.69		36.69		Indonesia
VNS-DAEWOO Co., Ltd.	Steel scrap processing and sale		40.00		40.00		Vietnam
YULCHON MEXICO S.A. DE C.V.	Tube for automobile manufacturing		19.00		19.00		Mexico
POSCO-SAMSUNG-Slovakia Processing Center	Steel processing and sales		30.00		30.00		Slovakia
United Spiral Pipe, LLC	Material manufacturing and sales		35.00		35.00		USA
Korea Siberia Wood CJSC	Forest resource development		50.00		50.00		Russia
Hyunson Engineering & Construction HYENCO	Construction		4.90		4.90		Algeria
USS-POSCO Industries	Cold-rolled steel manufacturing and sales		50.00		50.00		USA
POSCO E&C Saudi Arabia	Civil engineering and construction		40.00		40.00		Saudi Arabia
Pos-Austem Suzhou Automotive Co., Ltd (*1)	Automotive parts manufacturing		—		19.90		China
POS-AUSTEM YANTAI AUTOMOTIVE CO., LTD (*1)	Automotive parts manufacturing		—		11.06		China
POS-AUSTEM WUHAN AUTOMOTIVE CO., LTD (*1)	Automotive parts manufacturing		—		13.00		China
POS-InfraAuto (Suzhou) Co., Ltd (*1)	Automotive parts manufacturing		—		16.20		China
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation) (*2)	Energy & resource development		—		35.00		Canada
Henan Tsingpu Ferro Alloy Co., Ltd. (*3)	Raw material manufacturing and sales		49.00		—		China
Zhangjiagang Pohang Refractories Co., Ltd. (*4)	Refractory manufacturing		50.00		—		China

(*1) These joint ventures were newly established in 2017.

(*2) Reclassified to joint venture from subsidiary during the year ended December 31, 2017.

(*3) Excluded from joint ventures due to the disposal of shares during the year ended December 31, 2017.

(*4) Reclassified to subsidiary from joint venture during the year ended December 31, 2017.

F-29

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(e) Newly included subsidiaries

Consolidated subsidiaries acquired or newly established during the year ended December 31, 2017 are as follows:

Company	Date of addition	Ownership (%)		Reason
POSCO RU Limited Liability Company	January 2017		100.00	New establishment
Golden Lace DAEWOO Company Limited	April 2017		100.00	New establishment
POSCO Research & Technology	June 2017		100.00	New establishment
POSCO DAEWOO UKRAINE LLC	July 2017		100.00	New establishment
Zhangjiagang Pohang Refractories Co., Ltd.	July 2017		51.00	Reclassification from associate
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2	October 2017		97.47	Acquisition of control
Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust	October 2017		99.01	Acquisition of control
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5	November 2017		99.67	Acquisition of control
KIS Devonian Canada Corporation	December 2017		100.00	Acquisition of control

(f) Excluded subsidiaries

Subsidiaries that were excluded from consolidation during the year ended December 31, 2017 are as follows:

Company	Date of exclusion	Reason
POSCO MAPC SA DE CV	January 2017	Merged into POSCO MPPC S.A. de C.V.
POSCO (Zhangjiagang) STS Processing Center Co., Ltd	January 2017	Merged into Zhangjiagang Pohang Stainless Steel Co., Ltd.
POSCO Engineering CO., Ltd	February 2017	Merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD.
POSCO YongXin Rare Earth Metal Co., Ltd.	March 2017	Disposal
SANTOS CMI S.A.	March 2017	Disposal
EPC EQUITIES LLP	March 2017	Disposal
SANTOS CMI Guatemala S.A.	March 2017	Disposal
COINSA INGENIERIA Y PETROQUIMICA S.R.L	March 2017	Disposal
SANTOS CMI CONSTRUCTION TRADING LLP	March 2017	Disposal
SANTOS CMI INC. USA	March 2017	Disposal
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA	March 2017	Disposal
SANTOS CMI PERU S.A.	March 2017	Disposal
SANTOS CMI CONSTRUCCIONES S.A.	March 2017	Disposal
GENTECH INTERNATIONAL INC.	March 2017	Disposal
SANTOS CMI CONSTRUCCIONES DE CHILE S.A.	March 2017	Disposal
COMPANIADEAUTOMATIZACION & CONTROL, GENESYS S.A.	March 2017	Disposal
POSCO Electrical Steel India Private Limited	March 2017	Merged into POSCO Maharashtra Steel Private Limited
POSEC Hawaii, Inc.	May 2017	Exclusion upon liquidation
PT. POSCO MTECH INDONESIA	May 2017	Disposal

F-30

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Company	Date of exclusion	Reason
POSCO VIETNAM HOLDINGS CO., LTD	July 2017	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
POSCO-Vietnam Processing Center Co., Ltd.	July 2017	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
Yingkou Puxiang Trade Co.,Ltd.	July 2017	Merged into Zhangjiagang Pohang Refractories Co., Ltd
Chongqing POSCO CISL Automotive Steel Co., Ltd.	September 2017	Loss of control
IT Engineering Co., Ltd.	November 2017	Disposal
POSCO India Delhi Steel Processing Center Private Limited	November 2017	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd.	November 2017	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation)	November 2017	Change in status due to a decline in stake
USA-SRDC	December 2017	Exclusion upon liquidation

2. Statement of Compliance and Basis of Presentation

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”), as issued by the International Accounting Standards Board.

The consolidated financial statements were authorized for issue by the authorized directors on February 28, 2018.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the statement of financial position, as described in the accounting policy below.

(a) Derivatives instruments are measured at fair value

(b) Financial instruments at fair value through profit or loss

(c) Available-for-sale financial assets are measured at fair value

(d) Defined benefit liabilities are measured at the present value of the defined benefit obligation less the fair value of the plan assets

Functional and presentation currency

The financial statements of POSCO and subsidiaries are prepared in functional currency of the respective operation. These consolidated financial statements are presented in Korean Won, which is POSCO’s functional currency which is the currency of the primary economic environment in which POSCO operates.

F-31

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period prospectively.

(a) Judgments

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

• Note 1 — Subsidiaries, associates and joint ventures

• Note 10 — Assets held for sale

• Note 11 — Investments in associates and joint ventures

• Note 12 — Joint operations

• Note 25 — Hybrid bonds

(b) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next fiscal year is included in the following notes:

• Note 11 — Investments in associates and joint ventures

• Note 15 — Goodwill and other intangible assets, net

• Note 20 — Provisions

• Note 21 — Employee benefits

• Note 29 — Construction contracts

• Note 35 — Income taxes

• Note 38 — Commitments and contingencies

(c) Measurement of fair value

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.

F-32

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Significant valuation issues are reported to the Company’s Audit Committee.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• Level 1 — unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 — inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly or indirectly.

• Level 3 — inputs for the assets or liability that are not based on observable market data.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Information about the assumptions made in measuring fair values is included in the following note:

• Note 23 — Financial instruments

Changes in Accounting Policies

Except for the application of the amendments to standards for the first time for the annual period beginning on January 1, 2017, as described below, the accounting policies have been consistently applied by the Company for the periods presented.

(a) Amendments to IAS No. 7 “Statement of Cash Flows”

For the year beginning on January 1, 2017, the Company applied the amendments to IAS No. 7 “Statement of Cash Flows”. IAS No. 7 requires that changes in liabilities related to the cash flows that were classified as a financing activity in the statement of cash flows or will be classified as a financing activity in the future should be disclosed as follows:

• Changes from financing cash flows

• Changes arising from obtaining or losing control of subsidiaries or other businesses

• The effect of changes in foreign exchange rates

• Changes in fair values

• Other changes

IAS No. 7 does not require the disclosure of comparative information of prior period. The related disclosures are included in note 39.

(b) Amendments to IAS No. 12 “Income Taxes”

For the year beginning on January 1, 2017, the Company applied the amendments to IAS No. 12 “Income Taxes”. In accordance with IAS No. 12, in the case of debt instruments measured at fair value, deferred tax accounting treatment is clarified. The difference

F-33

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

between the carrying amount and taxable base amount of the debt liabilities is considered as temporary differences, regardless of the expected recovery method. When reviewing the recoverability of deferred tax assets, the estimated of probable future taxable income may include the recovery of some of the Company’s assets for more than their carrying amount if there is sufficient evidence that it is probable that the Company will recover the asset for more than its carrying amount. In addition, the estimated of probable future taxable income are determined as the amount before considering the deductible effect from reversal of the deductible temporary differences.

The Company believes that the effect of the amendments to the consolidated financial statements is not significant. Therefore, the Company has not retrospectively applied the amendments in accordance with the transitional requirements.

3. Summary of Significant Accounting Policies

The significant accounting policies applied by the Company in preparation of its consolidated financial statements are included below. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, except for those as disclosed in note 2.

Basis of consolidation

(a) Business combinations

The Company accounts for business combinations using the acquisition method when control is transferred to the Company.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-combination service.

(b) Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

F-34

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(c) Subsidiaries

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(d) Loss of control

When the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(e) Interests in equity-accounted investees

The Company’s interests in equity-control investees comprise interests in associates and joint ventures. Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Company has joint control, whereby the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees, until the date on which significant influence or joint control ceases.

(f) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Foreign currency transactions and translation

(a) Foreign currency transactions

Foreign currency transactions are initially recorded using the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of each reporting period, foreign currency monetary items are translated using the closing rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the original transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date fair value was initially determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in profit or

F-35

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

loss in the period in which they arise. When gains or losses on non-monetary items are recognized in other comprehensive income, exchange components of those gains or losses are recognized in other comprehensive income. Conversely, when gains or losses on non-monetary items are recognized in profit or loss, exchange components of those gains or losses are recognized in profit or loss.

(b) Foreign operations

If the presentation currency of the Company is different from a foreign operation’s functional currency, the financial statements of the foreign operation are translated into the presentation currency using the following methods:

The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at the closing rate.

When a foreign operation is disposed of, the relevant amount in the translation is transferred to profit or loss as part of the profit or loss on disposal. On the partial disposal of a subsidiary that includes a foreign operation, the relevant proportion of such cumulative amount is reattributed to non-controlling interest. In any other partial disposal of a foreign operation, the relevant proportion is reclassified to profit or loss.

Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other comprehensive income in the translation reserve.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term investments in highly liquid securities that are readily convertible to known amounts of cash with maturities of three months or less from the acquisition date and which are subject to an insignificant risk of changes in value. Equity investments are excluded from cash and cash equivalents.

Non-derivative financial assets

The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. The Company recognizes financial assets in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

F-36

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Upon initial recognition, non-derivative financial assets are measured at their fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the asset’s acquisition or issuance.

(a) Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss if they are held for trading or designated as such upon initial recognition. Upon initial recognition, transaction costs are recognized in profit or loss when incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

(b) Held-to-maturity financial assets

A non-derivative financial asset with a fixed or determinable payment and fixed maturity, for which the Company has the positive intention and ability to hold to maturity, is classified as held-to-maturity. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest rate method.

(c) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method unless the effect of discounting is immaterial.

(d) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity financial assets or loans and receivables. Subsequent to initial recognition, they are measured at fair value, with changes in fair value, net of any tax effect, recorded in other comprehensive income in equity. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost. When a financial asset is derecognized or impairment losses are recognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Dividends on an available-for-sale equity instrument are recognized in profit or loss when the Company’s right to receive payment is established.

(e) Derecognition of non-derivative financial assets

The Company derecognizes non-derivative financial assets when the contractual rights to the cash flows from the financial asset expire, or the Company transfers the rights to receive the contractual cash flows from the financial asset as well as substantially all the risks and rewards of ownership of the financial asset. Any interest in a transferred financial asset that is created or retained by the Company is recognized as a separate asset or liability.

If the Company retains substantially all the risks and rewards of ownership of the transferred financial assets, the Company continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.

(f) Offsetting a financial asset and a financial liability

Financial assets and financial liabilities are offset and the net amount is presented in the consolidated statement of financial position only when the Company currently has a legally enforceable

F-37

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

right to offset the recognized amounts, and there is the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

Inventories

Inventory costs, except materials-in-transit in which costs are determined by using specific identification method, are determined by using the moving-weighted average method. The cost of inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The allocation of fixed production overheads to the costs of finished goods or work in progress are based on the normal capacity of the production facilities.

Inventories are measured at the lower of cost or net realizable value. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories arising from an increase in net realizable value is recognized as a reduction in the amount of inventories recognized as a cost of goods sold in the period in which the reversal occurs.

The carrying amount of those inventories is recognized as cost of goods sold in the period in which the related revenue is recognized.

Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. In order to be classified as held for sale, the assets or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable. The assets or disposal groups that are classified as non-current assets held for sale are measured at the lower of their carrying amount and fair value less cost to sell.

The Company recognizes an impairment loss for any initial or subsequent write-down of an asset or disposal group to fair value less costs to sell, and a gain for any subsequent increase in fair value less costs to sell, up to the cumulative impairment loss previously recognized in accordance with IAS No. 36 “Impairment of Assets”.

A non-current asset that is classified as held for sale or part of a disposal group classified as held for sale is not depreciated (or amortized).

Investment property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment property is measured initially at its cost. Transaction costs are included in the initial measurement. Subsequently, investment property is carried at depreciated cost less any accumulated impairment losses.

Subsequent costs are recognized in the carrying amount of investment property at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

F-38

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate.

Property, plant and equipment

Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and any accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and, when the Company has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The cost of replacing a part of an item is recognized in the carrying amount of the item of property, plant and equipment, if the following recognition criteria are met:

(a) it is probable that future economic benefits associated with the item will flow to the Company, and

(b) the cost can be measured reliably.

The carrying amount of the replaced part is derecognized at the time the replacement part is recognized. The costs of the day-to-day servicing of the item are recognized in profit or loss as incurred.

Items of property, plant and equipment are depreciated from the date they are available for use or, in respect of self-constructed assets, from the date that the asset is completed and ready for use. Other than land, the costs of an asset less its estimated residual value are depreciated. Depreciation of property, plant and equipment is recognized in profit or loss on a straight-line basis, which most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset, over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognized.

The estimated useful lives for the current and comparative periods are as follows:

Buildings	3-50 years
Structures	4-50 years
Machinery and equipment	4-25 years
Vehicles	3-20 years
Tools	3-10 years
Furniture and fixtures	3-20 years
Lease assets	3-30 years
Bearer plants	20 years

The estimated residual value, useful lives and the depreciation method are reviewed at least at the end of each reporting period and, if expectations differ from previous estimates, the changes are accounted for as changes in accounting estimates.

F-39

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Borrowing costs

The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale. Financial assets and inventories that are manufactured or otherwise produced over a short period of time are not qualifying assets. Assets that are ready for their intended use or sale when acquired are not qualifying assets.

To the extent that the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Company immediately recognizes other borrowing costs as an expense. To the extent that the Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company shall determine the amount of borrowing costs eligible for capitalization by applying a capitalization rate to the expenditures on that asset. The capitalization rate shall be the weighted average of the borrowing costs applicable to the borrowings of the Company that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs that the Company capitalizes during a period shall not exceed the amount of borrowing costs incurred during that period.

Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses.

Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which club memberships are expected to be available for use, this intangible asset is determined as having an indefinite useful life and not amortized.

Intellectual property rights	4-25 years
Development costs	3-5 years
Port facilities usage rights	4-75 years
Other intangible assets	2-15 years

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the end of each reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the end of each reporting period to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. Changes are accounted for as changes in accounting estimates.

Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in profit or loss as incurred. Development expenditures are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditures are recognized in profit or loss as incurred.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

F-40

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Exploration for and evaluation of mineral resources

POSCO is engaged in exploration projects for mineral resources through subsidiaries, associates and joint ventures or other contractual arrangements. Expenditures related to the development of mineral resources are recognized as exploration or development intangible assets. The nature of these intangible assets are as follows:

(a) Exploration and evaluation assets

Exploration and evaluation assets consist of expenditures for topographical studies, geophysical studies and trenching. These assets are reclassified as development assets when it is proved that the exploration has identified commercially viable mineral deposit.

(b) Development assets

When proved reserves are determined and development is sanctioned, development expenditures incurred are capitalized. These expenditures include evaluation of oil fields, construction of oil/gas wells, drilling for viability and others. On completion of development and inception of extraction for commercial production of developed proved reserves, the development assets are reclassified as either property, plant and equipment or as intellectual property rights (mining rights) under intangible assets based on the nature of the capitalized expenditure.

The respective property, plant and equipment and intellectual property (mining rights) are each depreciated and amortized based on proved reserves on a unit of production basis.

Government grants

Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grant’s conditions and that the grant will be received.

(a) Grants related to assets

Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted from the carrying amount of the assets and recognized in profit or loss on a systematic and rational basis over the life of the depreciable assets.

(b) Grants related to income

Government grants which are intended to compensate the Company for expenses incurred are deducted from the related expenses.

Leases

The Company classifies and accounts for leases as either a finance or operating lease, depending on the terms. Leases where the Company assumes substantially all of the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

(a) Finance leases

At the commencement of the lease term, the Company recognizes as finance assets and finance liabilities the lower amount of the fair value of the leased property and the present value of the minimum lease payments, each determined at the inception of the lease. Any initial direct costs are added to the amount recognized as an asset.

F-41

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use on a systematic basis consistent with the depreciation policy the Company adopts for similar depreciable assets that are owned. If there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life.

(b) Operating leases

Lease obligations under operating leases are recognized as an expense on a straight-line basis over the lease term. Contingent rents are charged as expenses in the periods in which they are incurred.

(c) Determining whether an arrangement contains a lease

Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfillment of the arrangement is dependent on the use of a specific asset or assets (the asset) and the arrangement conveys a right to use the asset.

At inception or reassessment of the arrangement, management of the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If management of the Company concludes for a financial lease that it is impracticable to separate the payments reliably, the Company recognizes an asset and a liability at an amount equal to the fair value of the underlying asset that was identified as the subject of the lease. Subsequently, the liability shall be reduced as payments are made and an imputed finance charge on the liability recognized using the purchaser’s incremental borrowing rate of interest.

Impairment for financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. However, losses expected as a result of future events, regardless of likelihood, are not recognized.

Objective evidence that a financial asset or group of financial assets are impaired includes:

(a) significant financial difficulty of the issuer or obligor;

(b) a breach of contract, such as a default or delinquency in interest or principal payments;

(c) the lender, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;

(d) it becoming probable that the borrower will enter bankruptcy or other financial reorganization;

F-42

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(e) the disappearance of an active market for that financial asset because of financial difficulties; or

(f) observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group.

In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

If there is objective evidence that financial assets are impaired, impairment losses are measured and recognized.

(a) Financial assets measured at amortized cost

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of its estimated future cash flows discounted at the asset’s original effective interest rate. If it is not practicable to obtain the instrument’s estimated future cash flows, impairment losses would be measured by using prices from any observable current market transactions. The Company can recognize impairment losses directly or establish a provision to cover impairment losses. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss shall be reversed either directly or by adjusting an allowance account.

(b) Financial assets carried at cost

If there is objective evidence that an impairment loss has occurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed.

(c) Available-for-sale financial assets

When a decline in the fair value of an available-for-sale financial asset has been recognized in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment even though the financial asset has not been derecognized. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognized in profit or loss.

Impairment for non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from construction contracts, employee benefits, inventories, deferred tax assets and non-current assets held

F-43

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

for sale, are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amount to their carrying amount.

Management estimates the recoverable amount of an individual asset. If it is impossible to measure the individual recoverable amount of an asset, then management estimates the recoverable amount of cash-generating unit (“CGU”). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The Company determined that individual operating entities are CGUs.

The recoverable amount of an asset or CGU is the greater of its value-in-use and its fair value less costs to sell. The value-in-use is estimated by applying a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies arising from the goodwill acquired. Any impairment identified at the CGU level will first reduce the carrying amount of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Derivative financial instruments and hedges

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(a) Hedge accounting

The Company holds forward exchange contracts, currency swaps and commodity future contracts to manage foreign exchange risk and commodity fair value risk. The Company designated derivatives as hedging instruments to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Company formally documents the relationship between the hedging instruments and hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

① Fair value hedge

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument and the gain or loss on the

F-44

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the consolidated statement of comprehensive income.

The Company discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, or if the hedge no longer meets the criteria for hedge accounting. Any adjustment arising from gain or loss on the hedged item attributable to the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.

② Cash flow hedge

When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

(b) Embedded derivatives

Embedded derivatives are separated from the host contract and accounted for separately only if the following criteria have been met: (a) the economic characteristics and risks of the host contract and the embedded derivatives are not clearly and closely related to a separate instrument with the same terms as the embedded derivative that would meet the definition of a derivative, and (b) the hybrid (combined) instrument is not measured at fair value through profit or loss. Changes in the fair value of separable embedded derivatives from the host contract are recognized immediately in profit or loss. However, convertible rights of convertible bonds are not separated from the host contract and the compound financial instruments of bonds and convertible rights are designated and measured at fair value through profit and loss.

(c) Other derivatives

Changes in the fair value of a derivative that is not designated as a hedging instrument are recognized immediately in profit or loss.

Non-derivative financial liabilities

The Company classifies non-derivative financial liabilities into financial liabilities at fair value through profit or loss or other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities. The Company recognizes financial liabilities in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the financial liability.

F-45

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading or designated as such upon initial recognition. Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the acquisition are recognized in profit or loss as incurred.

(b) Other financial liabilities

Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as other financial liabilities. At the date of initial recognition, other financial liabilities are measured at fair value minus transaction costs that are directly attributable to the acquisition. Subsequent to initial recognition, other financial liabilities are measured at amortized cost using the effective interest method. The Company derecognizes a financial liability from the consolidated statement of financial position when it is extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

Construction work in progress

The gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits (less recognized losses) exceed progress billings. If progress billings exceed costs incurred plus recognized profits (less recognized losses), then the gross amount due to customers for contract work is presented. Cost includes all expenditures related directly to specific projects and an allocation of fixed and variable overheads incurred in the Company’s contract activities based on normal operating capacity.

The Company recognizes advances received regarding the amount received from the ordering organization before the commencement of the construction. Also, the Company recognized trade accounts and notes receivable with respect to the amount billed to the ordering organization.

Employee benefits

(a) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service. When an employee has rendered service to the Company during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as profit or loss. If the Company has a legal or constructive obligation which can be reliably measured, the Company recognizes the amount of expected payment for profit-sharing and bonuses payable as liabilities.

(b) Other long-term employee benefits

Other long-term employee benefits include employee benefits that are settled beyond 12 months after the end of the period in which the employees render the related service, and are calculated at the present value of the amount of future benefit that employees have earned in return for their service in the current and prior periods, less the fair value of any related assets. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.

F-46

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(c) Retirement benefits: Defined contribution plans

For defined contribution plans, when an employee has rendered service to the Company during a period, the Company recognizes the contribution payable to a defined contribution plan in exchange for that service as an accrued expense, after deducting any contributions already paid. If the contributions already paid exceed the contribution due for service before the end of the reporting period, the Company recognizes that excess as an asset (prepaid expense) to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

(d) Retirement benefits: Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of plan assets is deducted. The calculation is performed annually by an independent actuary using the projected unit credit method.

The discount rate is the yield at the reporting date on corporate bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from actuarial assumption changes and experiential adjustments in other comprehensive income when incurred.

When the fair value of plan assets exceeds the present value of the defined benefit obligation, the Company recognizes an asset, to the extent of the present value of the total of cumulative any economic benefits available in the form of refunds from the plan or reduction in the future contributions to the plan.

Remeasurements of net defined benefit liabilities, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments, net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss in curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

F-47

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

Where some or all of the expenditures required to settle a provision are expected to be reimbursed by another party, the reimbursement shall be recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

A provision for warranties is recognized when the underlying products are sold. The provision is based on historical warranty.

Regarding provision for construction warranties, warranty period starts from the completion of construction in accordance with construction contracts. If the Company has an obligation for warranties, provision for warranties which are estimated based on historical warranty data are recorded as cost of construction and provision for warranties during the construction period.

A provision for restoration regarding contamination of land is recognized in accordance with the Company’s announced Environment Policy and legal requirement as needed.

A provision is used only for expenditures for which the provision was originally recognized.

Emission Rights

The Company accounts for greenhouse gases emission right and the relevant liability as follows pursuant to the Act on Allocation and Trading of Greenhouse Gas Emission which became effective in Korea in 2015.

(a) Greenhouse Gases Emission Right

Greenhouse Gases Emission Right consists of emission allowances which are allocated from the government free of charge and those purchased from the market. The cost includes any directly attributable costs incurred during the normal course of business.

Emission rights held for the purpose of performing the obligation are classified as intangible asset and initially measured at cost and subsequently carried at cost less accumulated impairment losses. Emission rights held for short-swing profits are classified as current asset and are measured at fair value with any changes in fair value recognized as profit or loss in the respective reporting period.

The Company derecognizes an emission right asset when the emission allowance is unusable, disposed or submitted to government when the future economic benefits are no longer expected to be probable.

(b) Emission liability

Emission liability is a present obligation of submitting emission rights to the government with regard to emission of greenhouse gas. Emission liability is recognized when there is a high possibility of outflows of resources in performing the obligation and the costs required to perform the obligation are reliably estimable. Emission liability is an amount of estimated

F-48

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

obligations for emission rights to be submitted to the government for the performing period. The emission liability is measured based on the expected quantity of emission for the performing period in excess of emission allowance in possession and the unit price for such emission rights in the market at the end of the reporting period.

Equity instruments

(a) Share capital

Common stock is classified as equity and the incremental costs arising directly attributable to the issuance of common stock less their tax effects are deducted from equity.

If the Company reacquires its own equity instruments, the amount of those instruments (“treasury shares”) are presented as a contra equity account. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of its own equity instruments. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase to equity, and the resulting surplus or deficit on the transaction is recorded in capital surplus.

(b) Hybrid Bonds

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and an equity instrument. When the Company has an unconditional right to avoid delivering cash or another financial asset to settle a contractual obligation, the instruments are classified as equity instruments.

Revenue

Revenue from the sale of goods, services provided and the use of assets is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates, which are not significant for all periods presented.

(a) Sale of goods

Revenue from the sale of goods in the ordinary course of activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. The appropriate timing for transfer of risks and rewards varies depending on the individual terms and conditions of the sales contract. For international sales, this timing depends on the type of international commercial terms of the contract.

(b) Construction contracts

Construction contracts of the Company primarily consist of contracts for the construction of plants and infrastructure facilities, and revenue recognition for different types of contracts is as follows:

When the outcome of a construction contract can be estimated reliably, contract revenue is recognized in profit or loss in proportion to the stage of completion of the contract. The

F-49

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

stage of completion of a contract is determined based on the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Contract revenue includes the initial amount agreed in the contract plus any variation in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably.

When the outcome of a construction contract cannot be estimated reliably, the revenue is recognized only to the extent of contract costs incurred that it is probable will be recoverable. An expected loss on the construction contract is recognized as an expense immediately.

The Company has construction contracts in which control and the significant risks and rewards of ownership of the residential real estate are transferred to the buyer upon the delivery. Revenue and expenses from development and sale of these residential real estate are recognized when an individual unit of residential real estate is delivered to the buyer.

(c) Services rendered

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.

(d) Rental income

Rental income from investment property, net of lease incentives granted, is recognized in profit or loss on a straight-line basis over the term of the lease.

Finance income and finance costs

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on valuations of hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest rate method. Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established.

Finance costs comprise interest expense on borrowings and changes in the fair value of financial assets at fair value through profit or loss and loss on valuations of hedging instruments that are recognized in profit or loss. Borrowing costs are recognized in profit or loss using the effective interest rate method.

Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

The Company recognizes interest and penalties related to corporate income tax as if it is related to the income taxes, the Company applies IAS No. 12 “Income Taxes”, if it is not related to the income taxes, the Company applies IAS No. 37 “Provisions Contingent Liabilities and Contingent Assets”.

(a) Current income tax

Current income tax is the expected income tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the

F-50

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

reporting period and any adjustment to tax payable in respect of previous years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit of future periods, and non-taxable or non-deductible items from the accounting profit.

(b) Deferred income tax

The measurement of deferred income tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company recognizes a deferred income tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The Company recognizes a deferred income tax asset for deductible temporary differences arising from investments in subsidiaries, associates and joint ventures, to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized. However, deferred income tax is not recognized for the following temporary differences: taxable temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income.

The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and deferred income tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax assets and liabilities are offset only if there is a legally enforceable right to offset the related current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority and they intend to settle current income tax liabilities and assets on a net basis.

Earnings per share

Management calculates basic earnings per share (“EPS”) data for POSCO’s ordinary shares, which is presented at the end of the statement of comprehensive income. Basic EPS is calculated by dividing profit attributable to ordinary shareholders of POSCO by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

F-51

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Operating segments

An operating segment is a component of the Company that: a) engages in business activities from which it may earn revenues and incur expenditures, including revenues and expenses that relate to transactions with any of the Company’s other components, b) whose operating results are regularly reviewed by the Company’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Management has determined that the CODM of the Company is the CEO.

With regard to construction segment, segment profit and loss is determined in the same way that consolidated profit after tax for the period is generally determined under IFRS except that revenues and expenses from the development and sale of certain residential real estate are determined by reference to the stage of completion of the contact activity at the end of the reporting period, while in the consolidated financial statements, they are recognized when an individual unit of residential real estate is delivered to the buyer. No adjustments are made for corporate allocations to segment profit and loss. In addition, segment assets and liabilities are generally measured based on total assets and liabilities in accordance with IFRS without any adjustment for corporate allocations, except that assets and liabilities in connection with the construction and sale of residential real estate are determined by reference to the stage of completion of the contract activity at the end of each period.

For the other segments, segment profit and loss is determined the same way that consolidated net after tax profit for the period is generally determined under IFRS without any adjustment for corporate allocations. The accounting policies used by each segment are consistent with the accounting policies used in the preparation of the consolidated financial statements. Segment assets and liabilities are generally measured based on total assets and liabilities in accordance with IFRS without any adjustment for corporate allocations. Also, segment assets and liabilities are based on the separate financial statements of the entities instead of on consolidated basis.

In addition, there are varying levels of transactions amongst the reportable segments. These transactions include sales of property, plant and assets, and rendering of construction service and so on.

Segment results that are reported to the CEO include items directly attributable to a segment and items allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

F-52

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

New standards and interpretations not yet adopted

The Company will apply IFRS No. 9 “Financial Instruments” and IFRS No. 15 “Revenue from Contracts with Customers” for the year beginning on January 1, 2018. The Company has completed an analysis of the financial impacts resulting from adoption of new standards and the estimated effect on equity in the consolidated financial statements at the date of initial application based on available information which are summarized as follows.

	December 31, 2017			IFRS No. 9			IFRS No. 15			Date of initial application (January 1, 2018)
	(in millions of Won)
Reserves	￦	(682,556	)		(401,344	)		—			(1,083,900	)
Retained earnings		42,974,658			368,612			(71,066	)		43,272,204
Non-controlling interests		3,666,334			(19,545	)		(59,060	)		3,587,729
	￦	45,958,436			(52,277	)		(130,126	)		45,776,033

The above estimated amounts could differ from the actual impact when the Company adopts the new standards in 2018 for the following reasons.

• Changes in internal controls related to application of new standards

• Changes in the Company’s selection in accounting policy during the year ending December 31, 2018 when initial disclosure of the consolidated financial statements at the date of initial application is made

The following new standards, including IFRS No. 9 and IFRS No. 15, interpretations and amendments to existing standards have been published but are not mandatory for the Company for annual periods beginning on January 1, 2017, and the Company has not early adopted them.

(a) IFRS No. 9 “Financial Instruments”

IFRS No. 9 “Financial Instruments” regulates requirements for measurement and recognition of certain contracts in relation to trading financial assets and liabilities or non-financial items. It replaces existing guidance in IAS No. 39 “Financial Instruments: Recognition and Measurement”.

The standard will generally be applied retrospectively with some exemptions allowing an entity not to restate the comparative information for prior periods in relation to classification and measurement (including impairment) changes. Such exemptions will be applied by the Company. The Company will recognize the accumulated effect resulting from initial application of IFRS No. 9 as reserves, retained earnings and non-controlling interests of the Company at the date of initial application.

The standard’s expected impact on the consolidated financial statements are as follows.

1) Classification and measurement of financial assets

When applying IFRS No. 9, the classification of financial assets will be driven by the Company’s business model for managing the financial assets and contractual terms of cash flow.

F-53

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

The following table shows the classification of financial assets measured subsequently at amortized cost, at fair value through other comprehensive income and at fair value through profit or loss. If a hybrid contract contains a host that is a financial asset, the classification of the hybrid contract shall be determined for the entire contract without separating the embedded derivative.

Business model	Contractual cash flows are solely payments of principal and interests	All other cases
To collect contractual cash flows	Amortized cost (*1)	Fair value through profit or loss (*2)
Both to collect contractual cash flows and sell financial assets	Fair value through other comprehensive income (*1)
For trading, and others	Fair value through profit or loss

(*1) The Company may irrevocably designate as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch.

(*2) The Company may irrevocably designate equity investments that are not held for trading as at fair value through other comprehensive income.

As of December 31, 2017, the Company had financial asset at fair value through profit or loss of ￦67,021 million, available-for-sale financial assets of ￦1,978,115 million, financial assets held-to-maturity of ￦5,211 million, and loans and receivables of ￦21,268,107 million.

As a result of analysis of the impact on the consolidated financial statements, the Company expects that debt instruments whose contractual cash flows do not solely represent payments of principal and interest and those held for trading will be measured at fair value through profit or loss; loans and receivables whose contractual cash flows solely represent receipt of principal and interest but are not owned for the purpose of collection of contractual cash flows will be measured at fair value through other comprehensive income or fair value through profit or loss. Accordingly, the financial assets at fair value through profit or loss may increase upon adoption of IFRS No. 9 which may increase the volatility in profit or loss. The Company expects the application of IFRS No. 9 on these financial assets will not have a material impact on the consolidated financial statements.

In accordance with IFRS No. 9, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument which is not held for trading at initial recognition. As of December 31, 2017, the Company had equity instruments classified as financial assets available-for-sale for the purpose of long-term strategic plan and the fair value of the accompanying asset is ￦1,730,753 million. In accordance with IFRS No. 9, the Company expects to make an irrevocable election to classify the equity instrument as assets measured at fair value through other comprehensive income, for which all subsequent changes in fair value are recognized in other comprehensive income and not subsequently recycled to profit or loss. As of January 1, 2018, the date of initial application, the Company expects to recognize a decrease in reserves of ￦401,344 million and an increase in retained earnings of ￦401,344 million due to designation of equity instruments to fair value through other comprehensive income.

F-54

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) Impairment: Financial Assets and Contract Assets

IFRS No. 9 replaces the incurred loss model in the existing standard with a forward-looking expected credit loss model for debt instruments, lease receivables, contractual assets, loan commitments, and financial guarantee contracts.

Under IFRS No. 9, impairment losses are likely to be recognized earlier than using the incurred loss model under the existing guidance in IAS No. 39 as loss allowances will be measured either 12-month or lifetime expected credit loss based on the extent of increase in credit risk.

If credit risk has increased significantly since the initial recognition, a loss allowance for lifetime expected credit loss is required to be measured at the end of every reporting period. If credit risk has not increased significantly since the initial recognition, a loss allowance is measured based on 12-month expected credit loss.

If the financial instrument has low credit risk at the end of the reporting period, the Company may assume that the credit risk has not increased significantly since initial recognition. However, a loss allowance for lifetime expected credit losses is required for contract assets or trade receivables that do not contain a significant financing component. Additionally, the Company has elected to recognize lifetime expected credit losses for contract assets or trade receivables that contain a significant financing component.

The Company expects impairment losses of financial assets under IFRS No. 9 to be recognized earlier. As of January 1, 2018, the date of initial application, the Company expects to recognize an increase in loss allowance of ￦66,637 million and a decrease in retained earnings and non-controlling interests of ￦32,732 million and ￦19,545 million, respectively.

3) Classification and Measurement of Financial Liabilities

IFRS No. 9 mostly adheres to the existing requirements under IAS No. 39 regarding the classification of financial liabilities.

Under IAS No. 39, all financial liabilities designated at fair value through profit or loss recognized their fair value movements in profit or loss. However, IFRS No. 9 requires the amount of the change in the liability’s fair value attributable to changes in the credit risk to be recognized in other comprehensive income. Amounts presented in other comprehensive income are not subsequently transferred to profit or loss.

The Company did not designate financial liabilities as financial liability at fair value through profit or loss as of December 31, 2017 and expects the adoption of IFRS No. 9 will not have significant impact on the classification of financial liabilities.

4) Hedge Accounting

Regarding the initial application of IFRS No. 9, the Company may choose as its accounting policy choice to continue to apply all of the hedge accounting requirements of IAS No. 39 instead of the requirements of IFRS No. 9. The Company determined to consistently apply hedge accounting requirements of IAS No. 39.

F-55

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) IFRS No. 15 “Revenue from Contracts with Customers”

IFRS No. 15 “Revenue from Contracts with Customers” provides a unified five-step model for determining the timing, measurement and recognition of revenue. It replaces existing revenue recognition guidance, including IAS No. 18 “Revenue”, IAS No. 11 “Construction Contracts”, SIC No. 31 “Revenue- Barter Transactions Involving Advertising Services”, IFRIC No. 13 “Customer Loyalty Programs”, IFRIC No. 15 “Agreements for the Construction of Real Estate”, and IFRIC No. 18 “Transfers of Assets from Customers”.

The Company intends to apply the modified retrospective approach by recognizing the cumulative impact of initially applying the revenue standard as of January 1, 2018, the date of initial application and the Company also decided to apply the practical expedients as allowed by IFRS No. 15 by applying the new standard only to those contracts that are not considered as completed contracts at the date of initial application. Accordingly, upon adoption of IFRS No. 15, the Company will not restate the financial statements for comparative periods.

Existing IFRS standards and interpretations including IAS No. 18 provide revenue recognition guidance by transaction types such as sales of goods, rendering of services, interest income, royalty income, dividend income and construction revenue; however, under the new standard, IFRS No. 15, the five-step approach (Step 1: Identify the contract(s) with a customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract, Step 5: Recognize revenue when the entity satisfied a performance obligation) is applied for all types of contracts or agreements.

The standard’s expected impact on the consolidated financial statements are as follows.

1) Identification of performance obligations

The Company holds certain contracts for sales of manufactured product and merchandise which include transportation service. When applying IFRS No. 15, sales of manufactured products or merchandise and delivery of products (i.e. shipping service) are identified as separate performance obligations in the contracts with customers. For transactions for which the shipping terms are on shipment basis and the customer pays shipping costs, the two performance obligations are separately accounted for because delivery of products is performed after the control over the products is transferred to the customer. The transaction price allocated to the performance obligation of delivery service will be recognized when the obligation of delivery of the product is completed.

The Company identified shipping service included in the sales contract as a separate performance obligation that will be satisfied over the promised service period. As of January 1, 2018, the date of initial application, change in relevant accounting policy is expected to result in decrease in retained earnings and non-controlling interests of ￦949 million and ￦156 million, respectively.

Certain construction contracts of the Company include design, purchase and construction services through separate service contracts. According to IFRS No. 15, if service or goods provided by the Company are highly dependent or correlated, the

F-56

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

Company should identify them as a single performance obligation regardless of the number of contracts made.

The Company considered each service contract as a combined single obligation and therefore, upon adoption of IFRS No. 15 as of January 1, 2018, the date of initial application, the Company expects to recognize increases in retained earnings and non-controlling interests of ￦452 million and ￦628 million, respectively.

2) Variable consideration

Under IFRS No. 15, the Company estimates the amount of variable consideration by using the expected value which the Company expects to better predict the amount of consideration. The Company recognizes revenue with transaction price including variable consideration only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the refund period has lapsed.

In certain sales arrangements, unit price is subject to adjustment due to quality of products. A certain percentage of sales discount is also provided in case customers make payment before the settlement due date. In addition, certain service contracts are subject to compensation payment if the Company fails to achieve a promised level of obligation.

As of January 1, 2018, the date of initial application of IFRS No. 15, the adoption is expected to result in decrease in retained earnings of ￦2,773 million and increase in non-controlling interests of ￦88 million.

3) Performance obligation satisfied over time

In accordance with IFRS No. 15, revenue is recognized over time by measuring progress only if the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

The Company analyzed certain service contracts, where the Company provides manufacturing services for customized machinery. Currently the related revenue is recognized over the period when such services are provided. Under IFRS No. 15, as the Company does not have an enforceable right to payment for performance completed to date, the related revenue is recognized at the time when the machinery is delivered. As of January 1, 2018, the date of initial application, changes in accounting policy due to enforceable right to payment are expected to result in decreases in retained earnings and non-controlling interests of ￦1,188 million and ￦1,115 million, respectively.

According to IFRS No. 15, the effects of any inputs that do not depict the transfer of control of goods or services to the customer such as the costs of wasted materials, labor or other resources to fulfill the contract that were not reflected in the price of the contract should be excluded from calculating percentage of completion. As of January 1, 2018, the date of initial application, change in percentage of completion due to excessive use of materials is expected to result in decreases in retained earnings and non-controlling interests of ￦2,855 million and ￦1,512 million, respectively.

F-57

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

4) Incremental costs of obtaining a contract

In accordance with IFRS No. 15, the Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs, and costs that are recognized as assets are amortized over the period that the related goods or services are transferred to the customer.

Certain costs incurred in construction segment such as costs to obtain a contract that would have been incurred regardless of whether the contract was obtained should be recognized as an expense immediately, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained. Such costs have been previously capitalized if it is probable the related contracts will be entered into. As of January 1, 2018, the date of initial application, change in accounting policy regarding incremental costs of obtaining a contract is expected to result in decreases in retained earnings and non-controlling interests of ￦63,753 million and ￦56,993 million, respectively.

(c) IFRS No. 16 “Leases”

IFRS No. 16 “Leases” will replace IAS No. 17 “Leases” and IFRIC No. 4 “Determining whether an Arrangement contains a Lease”. It is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for a Company which has adopted IFRS No. 15.

As a lessee, the Company shall apply this standard using one of the following two methods; (a) retrospectively to each prior reporting period presented in accordance with IAS No. 8 “Accounting Policies, Changes in Accounting Estimates and Errors” but using the practical expedients for completed contracts- i.e. completed contracts as of the beginning of the earliest prior period presented are not restated; or (b) retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application.

IFRS No. 16 suggests a single accounting model that requires a lessee to recognize lease related asset and liability in the consolidated financial statements. A lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. The lessee may elect not to apply the requirements to short-term lease of which has a term of 12 months or less at the commencement date and low value assets. Accounting treatment for lessor is similar to the existing standard which classifies lease into finance and operating lease.

Application of IFRS No. 16 will change current operating lease expense which has been recognized in straight-line method into depreciation expense of right-of-use asset and interest expense of lease liability, and therefore, nature of expense recognized in relation to lease will change. However, it is expected that there will be no significant impact on finance lease.

The Company has not yet initiated the preparation for the application of IFRS No. 16 and has not performed an assessment of the impact resulting from the application of IFRS No. 16. The Company will complete the analysis of financial impacts arising from applying this standard in 2018.

F-58

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

4. Financial risk management

The Company has exposure to the following risks from its use of financial instruments:

• credit risk

• liquidity risk

• market risk

• capital risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

(a) Financial risk management

1) Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

2) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. In addition, credit risk arises from finance guarantees.

The Company implements a credit risk management policy under which the Company only transacts business with counterparties that have a certain level of credit rate evaluated based on financial condition, historical experience, and other factors. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The default risk of a nation or an industry in which a customer operates its business does not have a significant influence on credit risk. The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for companies of similar assets in respect of losses that have been incurred but not yet identified. The collective

F-59

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

loss allowance is determined based on historical data of payment statistics for similar financial assets. Debt securities are analyzed individually, and an expected loss shall be directly deducted from debt securities.

Credit risk also arises from transactions with financial institutions, and such transactions include transactions of cash and cash equivalents, various deposits, and financial instruments such as derivative contracts. The Company manages its exposure to this credit risk by only entering into transactions with banks that have high international credit ratings. The Company’s treasury department authorizes, manages, and overseas new transactions with financial institutions with whom the Company has no previous relationship.

Furthermore, the Company limits its exposure to credit risk of financial guarantee contracts by strictly evaluating their necessity based on internal decision making processes, such as the approval of the board of directors.

3) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company’s cash flow from business, borrowing or financing is sufficient to meet the cash requirements for the Company’s strategic investments. Management believes that the Company is capable of raising funds by borrowing or financing if the Company is not able to generate cash flow requirements from its operations. The Company has committed borrowing facilities with various banks.

4) Market risk

Market risk means that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The goal of market risk management is optimization of profit and controlling the exposure to market risk within acceptable limits.

① Currency risk

The Company’s policy in respect of foreign currency risks is a natural hedge whereby foreign currency income is offset with foreign currency expenditures. The remaining net exposures after the natural hedge have been hedged using derivative contracts such as forward exchange contracts. In addition, the Company’s derivative transactions are limited to hedging actual foreign currency transactions and speculative hedging is not permitted. Based on this policy, the Company has performed currency risk management specific to various characteristics of different segments. The entities in the steel segment reduces the foreign currency exposure by repayment of foreign currency borrowings subjected to investment in overseas when its maturities come. The entities in the engineering and construction segment have hedged foreign currency risks by using forward

F-60

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

exchange contracts. Entities in the trading segment have hedged foreign currency risks by using forward exchange contracts when the foreign currencies received and paid are different.

② Interest rate risk

The Company manages the exposure to interest rate risk by adjusting of borrowing structure ratio between borrowings at fixed interest rates and variable interest rate. The Company monitors interest rate risks regularly in order to avoid exposure to interest rate risk on borrowings at variable interest rate.

③ Other market price risk

Equity price risk arises from listed equity securities among available-for-sale equity securities. Management of the Company measures regularly the fair value of listed equity securities and the risk of variance in future cash flow caused by market price fluctuations. Significant investments are managed separately and all buy and sell decisions are approved by management of the Company.

(b) Management of capital

The fundamental goal of capital management is the maximization of shareholders’ value by means of the stable dividend policy and the retirement of treasury shares. The capital structure of the Company consists of equity and net borrowings (after deducting cash and cash equivalents) and current financial instruments from borrowings. The Company applied the same capital risk management strategy that was applied in the previous period.

Net borrowing-to-equity ratio as of December 31, 2016 and 2017 is as follows:

	2016			2017
	(in millions of Won)
Total borrowings	￦	22,704,998			21,063,657
Less: Cash and cash equivalents		2,447,619			2,612,530
Net borrowings		20,257,379			18,451,127
Total equity		45,765,269			47,326,725
Net borrowings-to-equity ratio		44.26	%		38.99	%

5. Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2016 and 2017 are as follows:

	2016		2017 (*1)
	(in millions of Won)
Cash	￦	11,960		1,896
Demand deposits and checking accounts		1,312,426		1,259,813
Time deposits		254,888		360,985
Other cash equivalents		868,345		989,836
	￦	2,447,619		2,612,530

(*1) As of December 31, 2017, cash equivalents amounting to ￦36,302 million of POSCO ENGINEERING & CONSTRUCTION CO., LTD., a subsidiary of the Company, are restricted for use related to the joint account of joint operations and others.

F-61

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

6. Trade Accounts and Notes Receivable

(a) Trade accounts and notes receivable as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Current
Trade accounts and notes receivable	￦	9,320,915			8,579,620
Finance lease receivables		10,300			10,469
Unbilled due from customers for contract work		860,287			728,007
Less: Allowance for doubtful accounts		(517,476	)		(493,533	)
	￦	9,674,026			8,824,563
Non-current
Trade accounts and notes receivable	￦	80,447			871,432
Finance lease receivables		11,326			734
Less: Allowance for doubtful accounts		(40,649	)		(140,596	)
	￦	51,124			731,570

Trade accounts and notes receivable sold to financial institutions, for which the derecognition conditions were not met, amounted to ￦344,410 million and ￦309,964 million as of December 31, 2016 and 2017, respectively. The fair value of trade accounts and notes receivable approximates the carrying amounts and trade accounts and notes receivable are included in short-term borrowings from financial institutions (Note 17).

(b) Finance lease receivables are as follows:

Customer	Contents	2016		2017
	(in millions of Won)
Korea Electric Power Corporation	Combined thermal power plant 3~4	￦	20,648		10,469
KC Chemicals CORP	Machinery and equipment		244		—
Hystech.Co. Ltd.	Machinery and equipment		734		734
		￦	21,626		11,203

(c) The gross amount and present value of minimum lease payments as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Less than 1 year	￦	13,114			11,771
1 year – 5 years		12,547			828
Unrealized interest income		(4,035	)		(1,396	)
Present value of minimum lease payment	￦	21,626			11,203

F-62

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

7. Other Receivables

Other receivables as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Current
Loans	￦	421,818			617,696
Other accounts receivable		1,131,492			960,543
Accrued income		139,618			179,971
Deposits		93,891			107,137
Others		13,606			18,925
Less: Allowance for doubtful accounts		(260,683	)		(248,266	)
	￦	1,539,742			1,636,006
Non-current
Loans	￦	733,974			874,158
Other accounts receivable		81,938			92,939
Accrued income		1,746			1,663
Deposits		104,217			122,485
Less: Allowance for doubtful accounts		(158,963	)		(212,069	)
	￦	762,912			879,176

8. Other Financial Assets

Other financial assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Derivatives assets held for trading	￦	49,281		63,912
Financial assets held for trading		—		1,970
Available-for-sale securities (bonds)		2,952		136,141
Current portion of held-to-maturity securities		422		421
Short-term financial instruments (*1,2)		5,172,256		6,843,436
	￦	5,224,911		7,045,880
Non-current
Derivatives assets held for trading	￦	98,301		4,378
Available-for-sale securities (equity instruments) (*3,4)		2,392,534		1,730,753
Available-for-sale securities (bonds)		46,330		54,439
Available-for-sale securities (others)		73,108		56,782
Held-to-maturity securities		2,048		4,790
Long-term financial instruments (*2)		45,371		60,542
	￦	2,657,692		1,911,684

(*1) As of December 31, 2016 and 2017, ￦6,813 million and ￦10,080 million, respectively, are restricted for use in a government project.

(*2) As of December 31, 2016 and 2017, financial instruments amounting to ￦82,008 million and ￦78,477 million, respectively, are restricted for use in financial arrangements, pledge and others.

(*3) During the year ended December 31, 2017, there were objective evidences of impairment for listed equity securities such as FINE BESTEEL CO., LTD and others and for non-listed equity securities such as Congonhas Minerios S.A. and others due to the significant or prolonged decline in the fair value below cost of the shares. As a result, an impairment losses of ￦123,214 million was recognized in profit or loss for the year ended December 31, 2017.

F-63

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*4) As of December 31, 2016 and 2017, ￦123,220 million and ￦136,099 million of available-for-sale securities, respectively, have been provided as collateral for borrowings, construction projects and others.

9. Inventories

(a) Inventories as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Finished goods	￦	1,200,344			1,526,628
Merchandise		851,325			930,558
Semi-finished goods		1,552,988			1,721,130
Raw materials		1,939,539			2,329,268
Fuel and materials		817,397			808,016
Construction inventories		1,455,115			1,692,092
Materials-in-transit		1,807,816			1,818,576
Others		94,535			103,144
		9,719,059			10,929,412
Less: Allowance for inventories valuation		(203,164	)		(135,631	)
	￦	9,515,895			10,793,781

(b) The changes of allowance for inventories valuation for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	161,940			231,378			203,164
Loss on valuation of inventories		152,952			152,249			78,560
Realization on disposal of inventories		(77,102	)		(161,458	)		(138,967	)
Others		(6,412	)		(19,005	)		(7,126	)
Ending	￦	231,378			203,164			135,631

10. Assets Held for Sale

Details of assets held for sale as of December 31, 2016 and 2017 are as follows:

	2016						2017
	Controlling company		Subsidiaries (*1)		Total		Controlling company		Subsidiaries (*2)		Total
	(in millions of Won)
Assets
Property, plant and equipment		764		305,864		306,628		392		71,340		71,732
Others		—		5,330		5,330		—		36		36
	￦	764		311,194		311,958		392		71,376		71,768

(*1) During the year ended December 2016, Posco e&c Songdo International Building, a subsidiary of the Company, entered into a sales contract regarding disposal of the office building of POSCO ENGINEERING & CONSTRUCTION CO., LTD. in Songdo and classified the accompanying property, plant and equipment as assets held for sale. During the year ended December 2017, disposal of the accompanying assets held for sale was completed.

(*2) During the year ended December 2017, POSCO ENGINEERING & CONSTRUCTION CO., LTD., a subsidiary of the Company, determined to dispose of the office building, Seomyeon Fiesta, in Busan and classified the related property, plant and equipment amounting to ￦71,340 million as assets held for sale.

F-64

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

11. Investments in Associates and Joint ventures

(a) Investments in associates and joint ventures as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Investments in associates	￦	1,595,441		1,520,441
Investments in joint ventures		2,286,948		2,037,491
	￦	3,882,389		3,557,932

(b) Details of investments in associates as of December 31, 2016 and 2017 are as follows:

	Number of shares		Ownership (%)		Acquisition cost		Book value
Company							2016		2017
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF		178,713,975,892		31.14	￦	178,787	￦	175,690		175,553
SNNC		18,130,000		49.00		90,650		107,859		110,424
QSONE Co.,Ltd.		200,000		50.00		84,395		84,799		85,049
Chun-cheon Energy Co., Ltd. (*1)		16,098,143		45.67		80,491		45,077		74,378
Incheon-Gimpo Expressway Co., Ltd. (*1)		9,032,539		18.26		45,163		37,372		31,660
BLUE OCEAN Private Equity Fund		333		27.52		33,300		35,752		19,620
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		2,008,000		29.53		10,040		12,551		17,252
UITrans LRT Co., Ltd. (*1)		7,714,380		38.19		38,572		17,851		15,841
Daesung Steel		108,038		17.54		14,000		12,302		15,500
Keystone NO. 1. Private Equity Fund		13,800,000		40.45		13,800		13,314		12,379
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		6,485		12.50		6,485		11,890		6,828
KONES, Corp.		3,250,000		41.67		6,893		5,641		2,827
Others (35 companies) (*1)								55,061		67,325
								615,159		634,636
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		135,219,000		25.04		150,779		215,996		197,069
AES-VCM Mong Duong Power Company Limited (*2)		—		30.00		164,303		167,141		142,348
7623704 Canada Inc.		114,452,000		10.40		124,341		137,512		121,702
Eureka Moly LLC		—		20.00		240,123		89,601		79,398
AMCI (WA) PTY LTD		49		49.00		209,664		70,501		63,378
Nickel Mining Company SAS		3,234,698		49.00		157,585		45,138		45,905
NCR LLC		—		29.41		37,634		36,738		33,738
KOREA LNG LTD.		2,400		20.00		135,205		63,058		33,422
PT. Batutua Tembaga Raya		128,285		22.00		21,824		22,723		21,823
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		10,200,000		34.00		9,517		18,008		15,617
PT. Wampu Electric Power (*1)		8,708,400		20.00		10,054		8,706		13,391
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		50		25.00		4,723		6,840		6,517
Others (26 companies) (*1)								98,320		111,497
								980,282		885,805
							￦	1,595,441		1,520,441

F-65

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*1) As of December 31, 2016 and 2017, investments in associates amounting to ￦124,963 million and ￦158,370 million, respectively, are provided as collateral in relation to the associates’ borrowings.

(*2) As of December 31, 2016 and 2017, shares of PSC Energy Global Co., Ltd., a subsidiary of the Company, are provided as collateral in relation to the associates’ borrowings.

(c) Details of investments in joint ventures as of December 31, 2016 and 2017 are as follows:

	Number of shares		Ownership (%)		Acquisition cost		Book value
Company							2016		2017
	(in millions of Won)
[Domestic]
POSCO MITSUBISHI CARBON TECHNOLOGY		11,568,000		60.00	￦	115,680	￦	83,113		110,760
Others (5 companies)								—		6,094
								83,113		116,854
[Foreign]
Roy Hill Holdings Pty Ltd (*1)		13,117,972		12.50		1,528,672		1,186,859		1,125,133
POSCO-NPS Niobium LLC		325,050,000		50.00		364,609		393,570		348,836
CSP — Compania Siderurgica do Pecem		1,108,696,532		20.00		558,821		330,463		146,427
KOBRASCO		2,010,719,185		50.00		32,950		88,308		108,485
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		25.00		61,961		97,369		88,305
DMSA/AMSA (*1)		—		4.00		304,623		74,935		56,735
Others (14 companies)								32,331		46,716
								2,203,835		1,920,637
							￦	2,286,948		2,037,491

(*1) As of December 31, 2016 and 2017, the investments in joint ventures are provided as collateral in relation to the joint ventures’ borrowings.

F-66

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) The movements of investments in associates and joint ventures for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

Company	December 31, 2015 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease) (*1)			December 31, 2016 Book value
						(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	175,676		222		—			(399	)		191			175,690
SNNC		111,326		—		—			(3,417	)		(50	)		107,859
QSONE Co.,Ltd.		83,919		—		—			880			—			84,799
Chun-cheon Energy Co., Ltd		30,420		19,832		—			(5,175	)		—			45,077
Incheon-Gimpo Expressway Co., Ltd.		39,447		—		—			(2,758	)		683			37,372
BLUE OCEAN Private Equity Fund		35,437		—		—			643			(328	)		35,752
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		12,265		—		—			286			—			12,551
UITrans LRT Co., Ltd.		40,903		6,817		—			(29,825	)		(44	)		17,851
Daesung Steel		14,000		—		—			(2,272	)		574			12,302
Keystone NO. 1. Private Equity Fund		13,015		—		—			281			18			13,314
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		14,829		1,875		—			1,186			(6,000	)		11,890
KONES, Corp.		5,775		—		—			(256	)		122			5,641
POSCO MITSUBISHI CARBON TECHNOLOGY		104,970		—		—			(21,929	)		72			83,113
POSCO PLANTEC Co., Ltd.		171,218		—		—			(171,927	)		709			—
SeAH Changwon Integrated Special Steel		165,754		—		—			4,797			(170,551	)		—
POSCO ES MATERIALS CO.,LTD		38,447		—		—			(2,061	)		(36,386	)		—
Others (33 companies)		33,933		20,061		(200	)		(2,802	)		4,069			55,061
		1,091,334		48,807		(200	)		(234,748	)		(206,921	)		698,272
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		222,269		—		(59,717	)		46,855			6,589			215,996
AES-VCM Mong Duong Power Company Limited		153,271		—		—			27,031			(13,161	)		167,141
7623704 Canada Inc.		134,034		—		(921	)		175			4,224			137,512
Eureka Moly LLC		87,878		—		—			(18	)		1,741			89,601
AMCI (WA) PTY LTD		72,289		—		—			(3,358	)		1,570			70,501
Nickel Mining Company SAS		76,445		—		—			(31,047	)		(260	)		45,138
NCR LLC		35,447		—		—			(41	)		1,332			36,738
KOREA LNG LTD.		53,548		—		(6,342	)		6,392			9,460			63,058
PT. Batutua Tembaga Raya		15,382		7,040		—			—			301			22,723
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		19,311		—		—			(412	)		(891	)		18,008
PT. Wampu Electric Power		8,855		—		—			(397	)		248			8,706
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		7,061		—		—			242			(463	)		6,840
Roy Hill Holdings Pty Ltd		1,153,434		—		—			12,643			20,782			1,186,859
POSCO-NPS Niobium LLC		381,461		—		(10,893	)		11,499			11,503			393,570
CSP - Compania Siderurgica do Pecem		80,805		88,930		—			116,694			44,034			330,463
KOBRASCO		78,364		—		(29,297	)		20,761			18,480			88,308
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		100,908		—		—			258			(3,797	)		97,369
DMSA/AMSA		105,964		24,624		—			(60,415	)		4,762			74,935
Others (37 companies)		67,273		28,993		(4,252	)		(791	)		39,428			130,651
		2,853,999		149,587		(111,422	)		146,071			145,882			3,184,117
	￦	3,945,333		198,394		(111,622	)		(88,677	)		(61,039	)		3,882,389

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals, change in capital adjustments effect from translations of financial statements of foreign investees and others.

F-67

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) For the year ended December 31, 2017

Company	December 31, 2016 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease) (*1)			December 31, 2017 Book value
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	175,690		—		—			418			(555	)		175,553
SNNC		107,859		—		—			2,370			195			110,424
QSONE Co.,Ltd.		84,799		—		(368	)		618			—			85,049
Chun-cheon Energy Co., Ltd		45,077		27,791		—			1,510			—			74,378
Incheon-Gimpo Expressway Co., Ltd.		37,372		—		—			(6,463	)		751			31,660
BLUE OCEAN Private Equity Fund		35,752		—		—			(8,154	)		(7,978	)		19,620
CHUNGJU ENTERPRISE CITY
DEVELOPMENT Co.,Ltd		12,551		—		—			4,701			—			17,252
UITrans LRT Co., Ltd.		17,851		—		—			(2,010	)		—			15,841
Daesung Steel		12,302		—		—			3,198			—			15,500
Keystone NO. 1. Private Equity Fund		13,314		—		—			(886	)		(49	)		12,379
KoFC POSCO HANWHA KB Shared Growth
NO. 2. Private Equity Fund		11,890		—		—			(197	)		(4,865	)		6,828
KONES, Corp.		5,641		—		—			(2,774	)		(40	)		2,827
POSCO MITSUBISHI CARBON TECHNOLOGY		83,113		—		—			27,582			65			110,760
Others (40 companies)		55,061		28,348		(137	)		(7,995	)		(1,858	)		73,419
		698,272		56,139		(505	)		11,918			(14,334	)		751,490
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		215,996		—		(37,016	)		42,896			(24,807	)		197,069
AES-VCM Mong Duong Power Company Limited		167,141		—		(30,798	)		19,644			(13,639	)		142,348
7623704 Canada Inc.		137,512		—		(7,563	)		7,468			(15,715	)		121,702
Eureka Moly LLC		89,601		—		—			(35	)		(10,168	)		79,398
AMCI (WA) PTY LTD.		70,501		—		—			(4,299	)		(2,824	)		63,378
Nickel Mining Company SAS		45,138		—		—			424			343			45,905
NCR LLC		36,738		276		—			(60	)		(3,216	)		33,738
KOREA LNG LTD.		63,058		—		(6,466	)		(70,180	)		47,010			33,422
PT. Batutua Tembaga Raya		22,723		—		—			260			(1,160	)		21,823
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		18,008		—		—			(1,268	)		(1,123	)		15,617
PT. Wampu Electric Power		8,706		—		—			5,927			(1,242	)		13,391
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		6,840		—		—			303			(626	)		6,517
Roy Hill Holdings Pty Ltd.		1,186,859		—		—			46,020			(107,746	)		1,125,133
POSCO-NPS Niobium LLC		393,570		—		(17,277	)		17,173			(44,630	)		348,836
CSP-Compania Siderurgica do Pecem		330,463		—		—			(147,847	)		(36,189	)		146,427
KOBRASCO		88,308		—		(22,135	)		56,445			(14,133	)		108,485
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		97,369		—		(5,542	)		1,555			(5,077	)		88,305
DMSA/AMSA		74,935		13,712		—			(22,339	)		(9,573	)		56,735
Others (40 companies)		130,651		22,209		(4,408	)		46,535			(36,774	)		158,213
		3,184,117		36,197		(131,205	)		(1,378	)		(281,289	)		2,806,442
	￦	3,882,389		92,336		(131,710	)		10,540			(295,623	)		3,557,932

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals, change in capital adjustments effect from translations of financial statements of foreign investees and others.

F-68

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(e) Summarized financial information of associates and joint ventures as of and for the years ended December 31, 2016 and 2017 are as follows:

1) December 31, 2016

Company	Assets		Liabilities		Equity (deficit)			Sales		Net income (loss)
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	597,767		864		596,903			—		(1,349	)
SNNC		725,987		482,429		243,558			527,101		2,022
QSONE Co.,Ltd.		247,385		77,786		169,599			15,961		1,760
Chun-cheon Energy Co., Ltd		547,805		378,613		169,192			—		(3,748	)
Incheon-Gimpo Expressway Co., Ltd.		929,539		718,107		211,432			—		(1,910	)
BLUE OCEAN Private Equity Fund		357,723		220,895		136,828			456,311		2,335
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		136,857		124,666		12,191			19,028		967
UITrans LRT Co., Ltd.		400,761		307,625		93,136			—		(822	)
Daesung Steel		150,944		112,194		38,750			60,772		(12,955	)
Keystone NO. 1. Private Equity Fund		119,378		79,946		39,432			197		694
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		96,213		1,094		95,119			14,157		9,561
KONES, Corp.		2,627		1,519		1,108			3,952		(615	)
POSCO MITSUBISHI CARBON TECHNOLOGY		448,618		311,070		137,548			53,908		(36,572	)
POSCO PLANTEC Co., Ltd.		501,659		678,004		(176,345	)		361,351		(43,195	)
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		2,171,689		1,305,942		865,747			491,011		187,114
7623704 Canada Inc.		1,334,391		1		1,334,390			—		19,485
Nickel Mining Company SAS		491,458		347,194		144,264			145,571		(61,473	)
KOREA LNG LTD.		303,389		19,704		283,685			33,035		31,962
PT. Batutua Tembaga Raya		351,119		332,037		19,082			—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		83,291		24,676		58,615			117,387		(1,216	)
PT. Wampu Electric Power		206,052		165,618		40,434			3,405		(1,984	)
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		67,905		40,451		27,454			81,260		938
Roy Hill Holdings Pty Ltd		10,962,261		8,059,714		2,902,547			845,243		129,968
POSCO-NPS Niobium LLC		786,937		—		786,937			—		24,719
CSP - Compania Siderurgica do Pecem		5,682,161		4,237,247		1,444,914			226,669		243,151
KOBRASCO		178,853		2,236		176,617			72,274		41,522
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		789,336		427,475		361,861			948,488		1,033
DMSA/AMSA		6,570,172		4,842,560		1,727,612			579,388		(519,969	)

F-69

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) December 31, 2017

Company	Assets		Liabilities		Equity		Sales		Net income (loss)
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	562,698		866		561,832		—		1,261
SNNC		705,975		459,519		246,456		576,023		2,417
QSONE Co.,Ltd.		248,779		78,680		170,099		15,297		1,236
Chun-cheon Energy Co., Ltd		700,079		539,137		160,942		164,294		(8,250	)
Incheon-Gimpo Expressway Co., Ltd.		1,132,233		922,338		209,895		—		(23,221	)
BLUE OCEAN Private Equity Fund		311,129		188,512		122,617		445,238		(3,345	)
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		76,184		48,072		28,112		77,093		15,921
UITrans LRT Co., Ltd.		464,074		384,202		79,872		3,689		(13,263	)
Daesung Steel		169,774		112,795		56,979		70,434		18,230
Keystone NO. 1. Private Equity Fund		170,155		133,033		37,122		5,391		(2,070	)
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		55,936		1,315		54,621		10,212		(1,578	)
KONES, Corp.		2,766		1,616		1,150		5,379		139
POSCO MITSUBISHI CARBON TECHNOLOGY		478,847		295,052		183,795		154,312		46,138
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		1,911,942		1,121,783		790,159		445,682		171,303
7623704 Canada Inc.		1,182,376		9		1,182,367		—		82,344
Nickel Mining Company SAS		465,700		324,687		141,013		179,683		(4,450	)
KOREA LNG LTD.		179,269		86		179,183		34,640		32,446
PT. Batutua Tembaga Raya		336,085		272,542		63,543		195,520		49,091
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		70,437		18,722		51,715		85,850		(3,736	)
PT. Wampu Electric Power		212,095		148,177		63,918		779		29,634
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		70,701		43,588		27,113		84,973		1,210
Roy Hill Holdings Pty Ltd		10,148,416		6,600,900		3,547,516		2,988,372		797,008
POSCO-NPS Niobium LLC		697,470		—		697,470		—		32,481
CSP - Compania Siderurgica do Pecem		4,805,353		4,223,392		581,961		1,290,767		(740,591	)
KOBRASCO		252,813		35,843		216,970		179,453		112,890
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		717,472		391,871		325,601		1,245,178		5,978
DMSA/AMSA		5,586,171		4,167,906		1,418,265		630,229		(475,958	)

F-70

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

12. Joint Operations

Details of significant joint operations that the Company is participating in as a party to a joint arrangement as of December 31, 2017 are as follows:

Joint operations	Operation	Ownership (%)	Location
Myanmar A-1/A-3 mine	Mineral development and gas production	51.00	Myanmar
Offshore midstream	Gas transportation facility	51.00	Myanmar
Greenhills mine	Mine development	20.00	Canada
Arctos Anthracite coal project	Mine development	50.00	Canada
Mt. Thorley J/V	Mine development	20.00	Australia
POSMAC J/V	Mine development	20.00	Australia
RUM J/V	Mine development	10.00	Australia
Hanam-Gamil package public housing project	Construction	7.70	Korea
Sejong 2-1 P3 Block public housing project	Construction	37.00	Korea
Yongin-Giheung Station area city development project	Construction	61.00	Korea
Korean wave world complex land multi-purpose building development project	Construction	33.30	Korea
Sejong 4-1 P3 Block public housing project	Construction	60.00	Korea

13. Investment Property, Net

(a) Investment property as of December 31, 2016 and 2017 are as follows:

	2016							2017
	Acquisition cost		Accumulated depreciation and impairment loss			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Book value
	(in millions of Won)
Land	￦	423,910		(31,187	)		392,723		360,402		—			360,402
Buildings		807,657		(136,118	)		671,539		727,022		(92,982	)		634,040
Structures		3,148		(1,001	)		2,147		7,717		(1,436	)		6,281
Construction-in-progress		51,311		—			51,311		64,191		—			64,191
	￦	1,286,026		(168,306	)		1,117,720		1,159,332		(94,418	)		1,064,914

As of December 31, 2017, the fair value of investment property is ￦1,663,682 million, among which the Company believed the fair value of its investment property of six subsidiaries, including POSCO (Dalian) IT Center Development Co., Ltd. approximate its book value of ￦126,026 million. Also, the Company used the prior year’s fair value for some of the investment property since it is believed that the fair value has not changed significantly.

(b) Changes in the carrying amount of investment property for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	346,879		24,116		(8,056	)		—			29,784			392,723
Buildings		696,526		7,548		(3,339	)		(24,043	)		(5,153	)		671,539
Structures		1,819		1		—			(288	)		615			2,147
Construction-in-progress		39,068		13,910		—			—			(1,667	)		51,311
	￦	1,084,292		45,575		(11,395	)		(24,331	)		23,579			1,117,720

F-71

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*1) Impairment loss on investment property amounting to ￦318 million is included.

(*2) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Disposals			Depreciation			Others (*1)			Ending
	(in millions of Won)
Land	￦	392,723		20,941		(37,725	)		—			(15,537	)		360,402
Buildings		671,539		38,831		(9,506	)		(23,450	)		(43,374	)		634,040
Structures		2,147		—		—			(591	)		4,725			6,281
Construction-in-progress		51,311		17,648		—			—			(4,768	)		64,191
	￦	1,117,720		77,420		(47,231	)		(24,041	)		(58,954	)		1,064,914

(*1) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

14. Property, Plant and Equipment, Net

(a) Property, plant and equipment as of December 31, 2016 and 2017 are as follows:

	2016										2017
	Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value
	(in millions of Won)
Land	￦	2,607,660		(6,452	)		—			2,601,208		2,534,102		(6,452	)		—			2,527,650
Buildings		9,180,028		(4,183,974	)		(423	)		4,995,631		9,311,426		(4,433,996	)		(412	)		4,877,018
Structures		5,385,365		(2,476,818	)		(67	)		2,908,480		5,452,713		(2,686,802	)		(59	)		2,765,852
Machinery and equipment		46,698,254		(26,379,544	)		(320	)		20,318,390		46,669,612		(27,301,410	)		(245	)		19,367,957
Vehicles		306,770		(259,986	)		(85	)		46,699		296,815		(263,884	)		(70	)		32,861
Tools		385,960		(312,266	)		(2,314	)		71,380		380,144		(315,446	)		(1,058	)		63,640
Furniture and fixtures		609,736		(477,064	)		(266	)		132,406		643,779		(498,192	)		(148	)		145,439
Finance lease assets		248,590		(89,577	)		—			159,013		243,160		(97,903	)		—			145,257
Bearer plants		—		—			—			—		70,031		(4,516	)		—			65,515
Construction-in-progress		2,542,233		—			(5,101	)		2,537,132		1,897,885		—			(5,539	)		1,892,346
	￦	67,964,596		(34,185,681	)		(8,576	)		33,770,339		67,499,667		(35,608,601	)		(7,531	)		31,883,535

F-72

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) Changes in the carrying amount of property, plant and equipment for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Business combination		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	2,572,807		8,901		15,687		(16,176	)		(6,452	)		26,441			2,601,208
Buildings		5,165,725		37,493		277,242		(12,857	)		(396,899	)		(75,073	)		4,995,631
Structures		2,949,413		19,043		—		(1,994	)		(216,631	)		158,649			2,908,480
Machinery and equipment		21,093,743		193,856		47,021		(36,095	)		(2,277,740	)		1,297,605			20,318,390
Vehicles		52,005		8,967		88		(1,990	)		(18,484	)		6,113			46,699
Tools		73,478		17,546		635		(848	)		(27,396	)		7,965			71,380
Furniture and fixtures		148,099		30,650		32		(4,248	)		(51,361	)		9,234			132,406
Finance lease assets		92,796		79,556		—		(38	)		(13,409	)		108			159,013
Construction-in-progress		2,374,789		1,935,339		2,181		(4,255	)		—			(1,770,922	)		2,537,132
	￦	34,522,855		2,331,351		342,886		(78,501	)		(3,008,372	)		(339,880	)		33,770,339

(*1) Includes impairment losses on property, plant and equipment amounting to ￦196,882 million. During the year ended December 31, 2016, due to the existence of indicators for impairment, such as continuing operating loss on fuel cell business of the POSCO ENERGY CO., LTD., which is included in other reportable segment, the Company performed impairment test and recognized impairment loss of ￦61,565 million. Recoverable amount was determined based on value-in-use, which was calculated by applying a 14.0% discount rate. The impairment recorded in 2016 also included ￦58,388 million related to POSCO for individual assets based on disposal plans.

(*2) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	2,601,208		3,477		(18,226	)		—			(58,809	)		2,527,650
Buildings		4,995,631		53,961		(5,782	)		(361,531	)		194,739			4,877,018
Structures		2,908,480		18,943		(2,558	)		(246,229	)		87,216			2,765,852
Machinery and equipment		20,318,390		194,653		(93,210	)		(2,217,435	)		1,165,559			19,367,957
Vehicles		46,699		9,982		(1,623	)		(22,340	)		143			32,861
Tools		71,380		16,424		(976	)		(28,539	)		5,351			63,640
Furniture and fixtures		132,406		61,597		(1,296	)		(48,416	)		1,148			145,439
Finance lease assets		159,013		4,760		(453	)		(14,810	)		(3,253	)		145,257
Bearer plants		—		—		—			(4,830	)		70,345			65,515
Construction-in-progress		2,537,132		1,894,067		(817	)		(36,706	)		(2,501,330	)		1,892,346
	￦	33,770,339		2,257,864		(124,941	)		(2,980,836	)		(1,038,891	)		31,883,535

(*1) Includes impairment losses on property, plant and equipment amounting to ￦117,231 million. During the year ended December 31, 2017, due to the existence of indicators for impairment, such as continuing operating loss on Suncheon Bay Personal Rapid Transit business of the Suncheon Eco Trans Co., Ltd, a subsidiary of the Company, the Company performed impairment test and recognized impairment loss of ￦48,070 million. The impairment recorded in 2017 also included ￦17,651 million related to POSCO for individual assets due to a decline in economic result and others.

(*2) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

F-73

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(c) Borrowing costs capitalized and the capitalized interest rate for the years ended December 31, 2016 and 2017 were as follows:

	2016		2017
	(in millions of Won)
Weighted average expenditure	￦	1,070,280		1,180,563
Borrowing costs capitalized		40,321		37,261
Capitalization rate (%)		3.32 ~ 3.82		1.74 ~ 3.45

(d) Property, plant and equipment and investment property pledged as collateral as of December 31, 2016 and 2017 are as follows:

		Book value
	Collateral right holder	2016		2017 (*2)
		(in millions of Won)
Land (*1)	Korean Development Bank and others	￦	925,670		822,057
Buildings and structures (*1)	Korean Development Bank and others		1,734,543		1,678,403
Machinery and equipment	Korean Development Bank and others		4,037,813		3,527,420
Construction-in-progress	Korean Development Bank and others		—		15,389
		￦	6,698,026		6,043,269

(*1) Investment property and other assets(land-use right) are included.

(*2) As of December 31, 2017, the pledged amount is ￦4,984,841 million.

15. Goodwill and Other Intangible Assets, Net

(a) Goodwill and other intangible assets as of December 31, 2016 and 2017 are as follows:

	2016										2017
	Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value		Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value
	(in millions of Won)
Goodwill	￦	1,669,556		(294,425	)		—			1,375,131		1,604,288		(254,450	)		—			1,349,838
Intellectual property rights		2,923,030		(401,156	)		(703	)		2,521,171		3,140,159		(690,966	)		—			2,449,193
Premium in rental		139,843		(20,804	)		—			119,039		139,873		(21,563	)		—			118,310
Development expense		376,327		(259,184	)		(131	)		117,012		397,129		(316,892	)		(19	)		80,218
Port facilities usage rights		633,025		(376,408	)		—			256,617		705,692		(396,319	)		—			309,373
Exploration and evaluation assets		196,124		(33,856	)		—			162,268		296,320		(90,376	)		—			205,944
Customer relationships		859,643		(345,398	)		—			514,245		857,624		(390,679	)		—			466,945
Power generation permit		539,405		—			—			539,405		539,405		—			—			539,405
Other intangible assets		1,007,871		(524,000	)		(30	)		483,841		1,006,219		(573,152	)		(24	)		433,043
	￦	8,344,824		(2,255,231	)		(864	)		6,088,729		8,686,709		(2,734,397	)		(43	)		5,952,269

F-74

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) The changes in carrying amount of goodwill and other intangible assets for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Disposals			Amortization			Impairment loss			Others (*2)			Ending
	(in millions of Won)
Goodwill	￦	1,461,954		—		—			—			(95,984	)		9,161			1,375,131
Intellectual property rights		2,667,086		56,849		(753	)		(204,112	)		(16,786	)		18,887			2,521,171
Premium in rental (*1)		127,949		1,964		(7,526	)		(243	)		(1,559	)		(1,546	)		119,039
Development expense		135,796		4,027		(60	)		(61,732	)		(298	)		39,279			117,012
Port facilities usage rights		264,801		—		—			(15,217	)		—			7,033			256,617
Exploration and evaluation assets		151,144		45,524		—			—			(3,290	)		(31,110	)		162,268
Customer relationships		559,809		—		—			(47,790	)		—			2,226			514,245
Power generation permit		539,405		—		—			—			—			—			539,405
Other intangible assets		497,810		52,350		(1,454	)		(48,910	)		(7,353	)		(8,602	)		483,841
	￦	6,405,754		160,714		(9,793	)		(378,004	)		(125,270	)		35,328			6,088,729

(*1) Premium in rental includes memberships with indefinite useful lives.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Business combination		Disposals			Amortization			Impairment loss			Others (*2)			Ending
	(in millions of Won)
Goodwill	￦	1,375,131		—		—		—			—			(21,750	)		(3,543	)		1,349,838
Intellectual property rights		2,521,171		167,580		47,625		(450	)		(217,932	)		(74,524	)		5,723			2,449,193
Premium in rental (*1)		119,039		6,006		—		(3,666	)		(611	)		(1,661	)		(797	)		118,310
Development expense		117,012		3,479		—		(1,179	)		(66,847	)		(694	)		28,447			80,218
Port facilities usage rights		256,617		—		—		—			(19,912	)		—			72,668			309,373
Exploration and evaluation assets		162,268		91,548		—		—			—			(56,519	)		8,647			205,944
Customer relationships		514,245		—		—		—			(46,508	)		—			(792	)		466,945
Power generation permit		539,405		—		—		—			—			—			—			539,405
Other intangible assets		483,841		84,502		—		(1,641	)		(57,964	)		(11,829	)		(63,866	)		433,043
	￦	6,088,729		353,115		47,625		(6,936	)		(409,774	)		(166,977	)		46,487			5,952,269

(*1) Premium in rental includes memberships with indefinite useful lives.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

F-75

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(c) For the purpose of impairment testing, goodwill is allocated to individually operating entities which are determined to be CGUs. The goodwill amounts as of December 31, 2016 and 2017 are as follows:

Reportable segments	Total number of CGUs
	2016		2017		CGUs	2016		2017
						(in millions of Won)
Steel		9		7	POSCO VST CO., LTD.	￦	36,955		36,955
					Others (*1)		13,151		12,494
Trading		2		2	POSCO DAEWOO Corporation (*1)		1,163,922		1,165,030
					PT. Bio Inti Agrindo		8,070		7,099
E&C		4		2	POSCO ENGINEERING & CONSTRUCTION CO., LTD. (*2)		—		90,426
					POSCO Engineering CO.,Ltd (*2)		111,309		—
					DONG FANG JIN HONG		166		157
Others		6		5	POSCO ENERGY CO., LTD.		26,471		26,471
					Others		15,087		11,206
Total		21		16		￦	1,375,131		1,349,838

(*1) For the year ended December 31, 2017, POSCO DAEWOO Corporation has taken over steel marketing and other business unit of POSCO Processing & Service. As a result, goodwill of POSCO Processing & Service amounting to ￦1,108 million was transferred to POSCO DAEWOO Corporation.

Recoverable amounts of POSCO DAEWOO Corporation are determined based on its value in use. As of December 31, 2017, value in use is estimated by applying 8.1% discount rate and 1.9% terminal growth rate within 5 years, the period for the estimated future cash flows, based on management’s business plan. The terminal growth rate does not exceed long-term average growth rate of its industry. No impairment loss on goodwill was recognized for the year ended December 31, 2017 as the recoverable amount exceeded the carrying amount of the CGU.

The estimated recoverable amount of the CGU exceeded the carrying amount by ￦117,324 million. Value in use of the CGU was affected by the assumptions such as discount rate and terminal growth used in discount cash flow model. When the discount rate increases by 0.25%, value in use will be decreased by 3.45% and when the terminal growth rate decreases by 0.25%, value in use will be decreased by 1.78%. Management believes that any reasonably possible negative change in the key assumptions on which the recoverable amount is based would result in impairment loss of goodwill.

(*2) For the year ended December 31, 2017, POSCO Engineering CO., Ltd was merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD, resulting in transfer of its goodwill to POSCO ENGINEERING & CONSTRUCTION CO., LTD.

Recoverable amounts of POSCO ENGINEERING & CONSTRUCTION CO., LTD are determined based on its value in use. As of December 31, 2017, value in use is estimated by applying 8.2% discount rate and 1.0% terminal growth rate within 5 years, the period for the estimated future cash flows, based on management’s business plan. The terminal growth rate does not exceed long-term average growth rate of its industry. Impairment loss on goodwill of ￦20,883 million was recognized for the year ended December 31, 2017 as the recoverable amount is lower than the carrying amount of the CGU.

Value in use of the CGU was affected by the assumptions such as discount rate and terminal growth used in discount cash flow model. When the discount rate increases by 0.25%, value in use will be decreased by 3.02% and when the terminal growth rate decreases by 0.25%, value in use will be decreased by 2.06%.

F-76

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

16. Other Assets

Other current assets and other non-current assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Advance payment	￦	787,452		661,779
Prepaid expenses		105,102		143,032
Firm commitment asset		—		15,115
Others		1,930		1,316
		894,484		821,242
Non-current
Long-term advance payment		27,189		24,201
Long-term prepaid expenses		380,678		333,153
Others (*1)		159,813		131,657
	￦	567,680		489,011

(*1) As of December 31, 2016 and 2017, the Company recognized tax assets amounting to ￦100,693 million and ￦88,633 million, respectively, based on the Company’s best estimate of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years’ tax audits that were finalized and claim for rectification are finalized.

17. Borrowings

(a) Short-term borrowings and current portion of long-term borrowings as of December 31, 2016 and 2017 are as follows:

	Bank	Issuance date	Maturity date	Interest rate (%)		2016			2017
	(in millions of Won)
Short-term borrowings
Bank overdrafts	JP Morgan and others	January, 2017~ December, 2017	January, 2018~ December, 2018		1.2~9.0	￦	254,036			217,879
Short-term borrowings	HSBC and others	January, 2017~ December, 2017	January, 2018~ December, 2018		0.3~10.5		7,725,691			7,956,939
							7,979,727			8,174,818
Current portion of long-term liabilities
Current portion of long-term borrowings	Export-Import Bank of Korea and others	September, 2001~ November, 2017	February, 2018~ December, 2018		0.4~8.5		1,390,733			1,407,123
Current portion of debentures	Korean Development Bank and others	August, 2009~ November, 2016	February, 2018~ December, 2018		1.4~6.1		825,176			1,693,974
Less: Current portion of discount on debentures issued							(829	)		(1,399	)
							2,215,080			3,099,698
						￦	10,194,807			11,274,516

F-77

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) Long-term borrowings, excluding current portion as of December 31, 2016 and 2017 are as follows:

	Bank	Issuance date	Maturity date	Interest rate (%)		2016			2017
	(in millions of Won)
Long-term borrowings	Export-Import bank of Korea and others	September, 2001~ December, 2017	March, 2019~ March, 2037		0.5~8.4	￦	6,420,612			4,839,199
Less: Present value discount							(55,799	)		(36,459	)
Bonds	Korea Development Bank and others	August, 2009~ November, 2017	February, 2019~ July, 2025		1.8~6.3		6,163,896			4,999,575
Less: Discount on debentures issued							(18,518	)		(13,174	)
						￦	12,510,191			9,789,141

(c) Assets pledged as collateral in regards to the borrowings as of December 31, 2017 are as follows:

	Bank	Book value		Pledged amount
	(in millions of Won)
Property, plant and equipment and Investment property (*1)	Korea Development Bank and others	￦	5,777,330		4,969,201
Trade accounts and notes receivable	Korea Development Bank and others		147,581		147,581
Inventories	Export-Import Bank of Korea and others		162,198		116,378
Financial instruments	Woori Bank and others		56,491		55,048
		￦6,143,600		5,288,208

(*1) Includes other assets(land-use right).

18. Other Payables

Other payables as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Accounts payable	￦	854,623		800,374
Accrued expenses		665,295		653,923
Dividend payable		7,770		7,213
Finance lease liabilities		24,523		17,763
Withholdings		299,448		274,188
	￦	1,851,659		1,753,461
Non-current
Accounts payable	￦	6,823		4,632
Accrued expenses		41,082		14,234
Finance lease liabilities		89,886		75,255
Long-term withholdings		70,768		53,629
	￦	208,559		147,750

F-78

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

19. Other Financial Liabilities

Other financial liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Derivatives liabilities	￦	85,786		69,872
Financial guarantee liabilities		63,962		59,940
	￦	149,748		129,812
Non-current
Derivatives liabilities	￦	37,110		85,638
Financial guarantee liabilities		44,199		28,467
	￦	81,309		114,105

20. Provisions

(a) Provisions as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Current		Non-current		Current		Non-current
	(in millions of Won)
Provision for bonus payments	￦	42,986		—		49,171		—
Provision for construction warranties		10,551		86,158		11,804		106,232
Provision for legal contingencies and claims (*1)		4,348		80,498		495		36,269
Provision for the restoration (*2)		10,169		52,425		12,273		121,917
Others (*3,4)		46,811		118,658		37,203		212,754
	￦	114,865		337,739		110,946		477,172

(*1) The Company recognized probable outflow of resources amounting to ￦30,425 million and ￦27,963 million as provisions in relation to lawsuits against the Company as of December 31, 2016 and 2017, respectively.

(*2) Due to contamination of lands near the Company’s magnesium smelting plant located in Gangneung province and others, the Company recognized present values of estimated costs for recovery, ￦29,471 million as provisions for restoration as of December 31, 2017. In order to determine the estimated costs, the Company has assumed that it would use all of technologies and materials available for now to recover the land. In addition, the Company has applied a discount rate of 2.73% to measure present value of these costs.

(*3) As of December 31, 2016 and 2017, POSCO ENERGY CO., LTD., a subsidiary of the Company, recognized ￦87,827 million and ￦157,461 million of provisions for warranties, respectively, for the service contract on fuel cell based on its estimate of probable outflow of resources.

(*4) As of December 31, 2016 and 2017, the amount includes a provision of ￦23,600 million for expected outflow of resources in connection with the performance guarantee for the Hwaseong-Dongtan complexes development project of POSCO ENGINEERING & CONSTRUCTION CO., LTD.

(b) The following are the key assumptions concerning the future and other key sources of estimation uncertainties at the end of the reporting period.

	Key assumptions for the estimation
Provision for bonus payments	Estimations based on financial performance
Provision for construction warranties	Estimations based on historical warranty data
Provision for legal contingencies and claims	Estimations based on the degree of probability of an unfavorable outcome and the ability to make a sufficient reliable estimate of the amount of loss

F-79

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(c) Changes in provisions for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Increase		Utilization			Reversal			Others (*1)			Ending
	(in millions of Won)
Provision for bonus payments	￦	42,602		44,106		(42,211	)		(272	)		(1,239	)		42,986
Provision for construction warranties		81,446		33,925		(19,469	)		(2,695	)		3,502			96,709
Provision for legal contingencies and claims		52,610		45,525		(14,012	)		(188	)		911			84,846
Provisions for the restoration		45,111		42,529		(13,367	)		(12,475	)		796			62,594
Others		102,243		131,911		(68,143	)		(3,086	)		2,544			165,469
	￦	324,012		297,996		(157,202	)		(18,716	)		6,514			452,604

(*1) Includes adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2017

	Beginning		Increase		Utilization			Reversal			Others (*1)			Ending
	(in millions of Won)
Provision for bonus payments	￦	42,986		74,728		(64,319	)		(3,035	)		(1,189	)		49,171
Provision for construction warranties		96,709		40,916		(18,006	)		(2,502	)		919			118,036
Provision for legal contingencies and claims		84,846		27,459		(70,156	)		(1,749	)		(3,636	)		36,764
Provisions for the restoration		62,594		63,438		(8,530	)		—			16,688			134,190
Others		165,469		161,054		(64,850	)		(20,199	)		8,483			249,957
	￦	452,604		367,595		(225,861	)		(27,485	)		21,265			588,118

(*1) Includes adjustments of foreign currency translation differences and others.

21. Employee Benefits

(a) Defined contribution plans

The expenses related to post-employment benefit plans under defined contribution plans for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Expense related to post-employment benefit plans under defined contribution plans	￦	25,224		30,344		35,538

(b) Defined benefit plans

1) The amounts recognized in relation to net defined benefit liabilities in the statements of financial position as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Present value of funded obligations	￦	1,715,583			1,826,907
Fair value of plan assets (*1)		(1,693,118	)		(1,714,166	)
Present value of non-funded obligations		17,437			16,228
Net defined benefit liabilities	￦	39,902			128,969

(*1) As of December 31, 2016 and 2017, the Company recognized net defined benefit assets amounting to ￦83,702 million and ￦8,224 million, respectively, since there are consolidated entities whose fair value of plan assets exceeded the present value of defined benefit obligations.

F-80

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) Changes in present value of defined benefit obligations for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Defined benefit obligations at the beginning of period	￦	1,714,115			1,733,020
Current service costs		285,706			209,612
Interest costs		39,286			35,830
Remeasurements:		(32,927	)		51,994
— Gain from change in financial assumptions		(72,910	)		(50,218	)
— Loss (gain) from change in demographic assumptions		(4,140	)		15,952
— Others		44,123			86,260
Benefits paid		(278,278	)		(185,220	)
Others		5,118			(2,101	)
Defined benefit obligations at the end of period	￦	1,733,020			1,843,135

3) Changes in fair value of plan assets for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Fair value of plan assets at the beginning of period	￦	1,532,090			1,693,118
Interest on plan assets		37,385			45,516
Remeasurement of plan assets		(6,963	)		(17,190	)
Contributions to plan assets		328,671			164,828
Benefits paid		(189,817	)		(168,643	)
Others		(8,248	)		(3,463	)
Fair value of plan assets at the end of period	￦	1,693,118			1,714,166

The Company expects to make an estimated contribution of ￦164,865 million to the defined benefit plan assets in 2018.

4) The fair value of plan assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Equity instruments	￦	56,187		41,218
Debt instruments		411,726		367,027
Deposits		1,167,475		1,254,571
Others		57,730		51,350
	￦	1,693,118		1,714,166

5) The amounts recognized in consolidated statements of comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Current service costs	￦	239,508		285,706		209,612
Net interest costs (*1)		5,894		1,901		(9,686	)
	￦	245,402		287,607		199,926

(*1) The actual return on plan assets amounted to ￦32,630 million, ￦30,422 million and ￦28,326 million for the years ended December 31, 2015, 2016 and 2017, respectively.

F-81

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

The above expenses by function were as follows:

	2015		2016		2017
	(in millions of Won)
Cost of sales	￦	170,334		161,810		131,724
Selling and administrative expenses		74,210		124,994		67,424
Others		858		803		778
	￦	245,402		287,607		199,926

6) Accumulated actuarial gains (losses), net of tax recognized in other comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	(314,106	)		(272,152	)		(251,612	)
Current actuarial gains (losses)		41,954			20,540			(47,543	)
Ending	￦	(272,152	)		(251,612	)		(299,155	)

7) The principal actuarial assumptions as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(%)
Discount rate		2.15~8.59		2.70~7.75
Expected future increase in salaries (*1)		1.00~10.00		1.04~10.00

(*1) The expected future increase in salaries is based on the average salary increase rate for the past three years.

All assumptions are reviewed at the end of the reporting period. Additionally, the total estimated defined benefit obligation includes actuarial assumptions associated with the long-term characteristics of the defined benefit plan.

8) Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

	1% Increase						1% Decrease
	Amount			Percentage (%)			Amount			Percentage (%)
	(in millions of Won)
Discount rate	￦	(123,568	)		(6.7	)		138,196			7.5
Expected future increase in salaries		136,385			7.4			(124,400	)		(6.7	)

9) As of December 31, 2017 the maturity of the expected benefit payments are as follows:

	Within 1 year		1 year - 5 years		5 years - 10 years		10 years - 20 years		After 20 years		Total
	(in millions of Won)
Benefits paid	￦	109,212		613,786		792,792		655,599		347,280		2,518,669

The maturity analysis of the defined benefit obligation was nominal amounts of defined benefit obligations using expected remaining period of service of employees.

F-82

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

22. Other Liabilities

Other liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Due to customers for contract work	￦	1,031,663		782,968
Advances received		864,536		1,183,108
Unearned revenue		8,702		7,121
Withholdings		186,665		221,940
Firm commitment liability		—		12,192
Others		22,307		33,590
	￦	2,113,873		2,240,919
Non-current
Advances received		418,832		353,631
Unearned revenue		20,013		18,440
Others		40,338		14,360
	￦	479,183		386,431

23. Financial Instruments

(a) Classification of financial instruments

1) Financial assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Financial assets at fair value through profit or loss
Financial assets held for trading	￦	—		1,970
Derivatives assets held for trading		147,582		65,051
Derivatives assets designated as hedging instruments		—		3,239
Available-for-sale financial assets		2,514,924		1,978,115
Held-to-maturity financial assets		2,470		5,211
Loans and receivables		19,277,709		21,268,107
	￦	21,942,685		23,321,693

The Company applies fair value hedge which uses commodity futures as hedging instrument in order to hedge the risk of changes in fair value of product prices regarding fixed price sales or purchase commitments. Also, the Company applies cash flow hedge which uses currency swap as hedging instrument in order to hedge the risk of changes in cash flow from borrowings due to foreign currency fluctuations.

F-83

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) Financial liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Financial liabilities at fair value through profit or loss
Derivatives liabilities held for trading	￦	122,896		142,280
Derivatives liabilities designated as hedging instruments		—		13,230
Financial liabilities measured at amortized cost
Trade accounts and notes payable		4,117,798		3,477,678
Borrowings		22,704,998		21,063,657
Financial guarantee liabilities		108,161		88,407
Others		2,007,114		1,865,683
	￦	29,060,967		26,650,935

3) Finance income and costs by category of financial instrument for the years ended December 31, 2015, 2016 and 2017 were as follows:

① December 31, 2015

	Finance income and costs																					Other comprehensive loss
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total
	(in millions of Won)
Derivatives assets	￦	—			129,949			—			357,715			—			—			487,664			—
Available-for-sale financial assets		1,956			—			—			138,782			(142,781	)		183,712			181,669			(187,854	)
Held-to-maturity financial assets		456			—			—			—			—			(688	)		(232	)		—
Loans and receivables		207,781			—			283,030			(15,406	)		—			(217	)		475,188			—
Derivatives liabilities		—			(46,748	)		—			(334,340	)		—			—			(381,088	)		—
Financial liabilities measured at amortized cost		(788,772	)		—			(665,583	)		—			—			(138,827	)		(1,593,182	)		—
	￦	(578,579	)		83,201			(382,553	)		146,751			(142,781	)		43,980			(829,981	)		(187,854	)

② December 31, 2016

	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total			Other comprehensive income
	(in millions of Won)
Derivatives assets	￦	—			57,411			—			310,625			—			—			368,036			—
Available-for-sale financial assets		431			—			—			127,524			(248,404	)		41,000			(79,449	)		310,608
Held-to-maturity financial assets		266			—			—			—			—			38			304			—
Loans and receivables		181,778			—			140,751			(17,854	)		—			(172	)		304,503			—
Derivatives liabilities		—			(72,976	)		—			(332,415	)		—			—			(405,391	)		—
Financial liabilities measured at amortized cost		(658,726	)		—			(283,059	)		(61	)		—			(28,367	)		(970,213	)		—
	￦	(476,251	)		(15,565)			(142,308	)		87,819			(248,404	)		12,499			(782,210	)		310,608

F-84

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

③ December 31, 2017

	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total			Other comprehensive loss
	(in millions of Won)
Financial assets held for trading	￦	—			16			—			—			—			—			16			—
Derivatives assets		—			(99,942	)		—			206,362			—			—			106,420			(143	)
Available-for-sale financial assets		60			—			—			418,789			(123,214	)		92,961			388,596			(31,389	)
Held-to-maturity financial assets		236			—			—			—			—			7			243			—
Loans and receivables		212,155			—			(607,837	)		(32,456	)		—			(304	)		(428,442	)		—
Derivatives liabilities		—			(61,809	)		—			(231,908	)		—			—			(293,717	)		—
Financial liabilities measured at amortized cost		(653,115	)		—			777,935			—			—			(9,546	)		115,274			—
	￦	(440,664	)		(161,735	)		170,098			360,787			(123,214	)		83,118			(111,610	)		(31,532	)

(b) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the Company’s maximum exposure to credit risk. The maximum exposure to credit risk as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Cash and cash equivalents	￦	2,447,619		2,612,530
Financial assets held for trading		—		1,970
Derivative assets		147,582		68,290
Available-for-sale financial assets		51,649		192,866
Held-to-maturity financial assets		2,470		5,211
Loans and other receivables		7,104,940		9,099,444
Trade accounts and notes receivable, net		9,674,026		8,824,563
Long-term trade accounts and notes receivable, net		51,124		731,570
	￦	19,479,410		21,536,444

The Company provided financial guarantees for the repayment of loans of associates, joint ventures and third parties. As of December 31, 2016 and 2017, the maximum exposure to credit risk related to the financial guarantees amounted to ￦2,995,544 million and ￦3,135,084 million, respectively.

F-85

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) Impairment losses on financial assets

① Allowance for doubtful accounts as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Trade accounts and notes receivable	￦	558,125		634,129
Other accounts receivable		203,346		187,706
Loans		210,346		258,957
Other assets		5,954		13,672
	￦	977,771		1,094,464

② Impairment losses on financial assets for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Bad debt expenses on trade accounts and notes receivable	￦	165,150			173,694
Other bad debt expenses (*1)		50,225			100,920
Impairment loss on available-for-sale financial assets		248,404			123,214
Less: Recovery of allowance for other bad debt accounts		(12,658	)		(2,743	)
Less: Recovery of impairment loss on held-to-maturity financial assets		(38	)		(20	)
	￦	451,083			395,065

(*1) Other bad debt expenses are mainly related to other receivables and loans.

③ The aging and impairment losses of trade accounts and notes receivable as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Trade accounts and notes receivable		Impairment		Trade accounts and notes receivable		Impairment
	(in millions of Won)
Not due	￦	7,963,491		62,511		7,736,092		65,314
Over due less than 1 month		790,042		27,482		445,390		12,546
1 month – 3 months		205,394		8,955		170,682		742
3 months – 12 months		189,605		26,814		384,313		21,030
Over 12 months		1,134,743		432,363		1,453,785		534,497
	￦	10,283,275		558,125		10,190,262		634,129

④ The aging and impairment losses of other receivables as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Other receivables		Impairment		Other receivables		Impairment
	(in millions of Won)
Not due	￦	1,641,924		23,958		1,888,726		9,672
Over due less than 1 month		197,772		75,207		235,559		35,539
1 month – 3 months		27,525		1,189		69,372		54,335
3 months – 12 months		82,337		20,300		96,942		64,467
over 12 months		357,401		298,992		365,202		296,322
	￦	2,306,959		419,646		2,655,801		460,335

F-86

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

⑤ Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	954,153			999,678			977,771
Bad debt expenses		189,616			165,150			173,694
Other bad debt expenses		147,619			37,567			98,177
Others (*1)		(291,710	)		(224,624	)		(155,178	)
Ending	￦	999,678			977,771			1,094,464

(*1) Others for the year ended December 31, 2015 included a decrease of ￦199,003 million due to exclusion of POSCO PLANTEC Co., Ltd. from consolidation. Others for years ended December 31, 2016 and 2017, included decreases mainly due to write-off amounting to ￦216,657 million and ￦119,964 million, respectively.

(c) Liquidity risk

1) Contractual maturities for non-derivative financial liabilities, including estimated interest, are as follows:

	Book value		Contractual cash flow		Within 1 year		1 year - 5 years		After 5 years
	(in millions of Won)
Trade accounts and notes payable	￦	3,477,678		3,478,992		3,466,001		12,991		—
Borrowings		21,063,657		22,928,112		12,093,516		9,200,416		1,634,180
Financial guarantee liabilities (*1)		88,407		3,135,084		3,135,084		—		—
Other financial liabilities		1,865,683		1,874,667		1,721,004		153,663		—
	￦	26,495,425		31,416,855		20,415,605		9,367,070		1,634,180

(*1) For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

2) The maturity analysis of derivative financial liabilities is as follows:

	Within 1 year		1 year - 5 years		Total
	(in millions of Won)
Currency forward	￦	9,744		300		10,044
Currency futures		9,632		74,834		84,466
Currency swaps		25,553		10,504		36,057
Interest swaps		153		—		153
Other forwards		24,790		—		24,790
	￦	69,872		85,638		155,510

F-87

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) Currency risk

1) The Company has exposure to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in foreign exchange rates. The exposure to currency risk as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Assets		Liabilities		Assets		Liabilities
	(in millions of Won)
USD	￦	5,007,649		6,636,065		4,215,151		5,940,380
EUR		463,110		550,235		552,630		454,072
JPY		45,975		821,403		165,356		709,318
Others		219,444		286,112		220,723		117,632

2) As of December 31, 2016 and 2017, provided that functional currency against foreign currencies other than functional currency hypothetically strengthens or weakens by 10%, the changes in gain or loss during the years ended December 31, 2016 and 2017 were as follows:

	2016					2017
	10% increase			10% decrease		10% increase			10% decrease
	(in millions of Won)
USD	￦	(162,842	)		162,842		(172,523	)		172,523
EUR		(8,713	)		8,713		9,856			(9,856	)
JPY		(77,543	)		77,543		(54,396	)		54,396

(e) Interest rate risk

1) The carrying amount of interest-bearing financial instruments as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Fixed rate
Financial assets	￦	8,650,483			10,943,300
Financial liabilities		(10,794,724	)		(11,179,635	)
		(2,144,241	)		(236,335	)
Variable rate
Financial liabilities	￦	(12,024,683)			(9,977,040	)

2) Sensitivity analysis on the fair value of financial instruments with fixed interest rate

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company does not designate derivatives (interest rate swaps) as hedging instruments under fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

3) Sensitivity analysis on the cash flows of financial instruments with variable interest rate

As of December 31, 2016 and 2017, provided that other factors remain the same and the interest rate of borrowings with floating rates increases or decreases by 1%, the changes in interest expense for the years ended December 31, 2016 and 2017 were as follows:

	2016				2017
	1% increase		1% decrease		1% increase			1% decrease
	(in millions of Won)
Variable rate financial instruments	￦	(120,247)		120,247		(99,770	)		99,770

F-88

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(f) Fair value

1) Fair value and book value

The carrying amount and the fair value of financial instruments as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Book value		Fair value		Book value		Fair value
	(in millions of Won)
Financial assets measured at fair value
Available-for-sale financial assets (*1)	￦	2,139,687		2,139,687		1,506,893		1,506,893
Financial assets held for trading		—		—		1,970		1,970
Derivatives assets		147,582		147,582		68,290		68,290
		2,287,269		2,287,269		1,577,153		1,577,153
Financial assets measured at amortized cost (*2)
Cash and cash equivalents		2,447,619		2,447,619		2,612,530		2,612,530
Trade accounts and notes receivable, net		9,725,150		9,725,150		9,556,133		9,556,133
Loans and other receivables, net		7,104,940		7,104,940		9,099,444		9,099,444
Held-to-maturity financial assets		2,470		2,470		5,211		5,211
		19,280,179		19,280,179		21,273,318		21,273,318
Financial liabilities measured at fair value
Derivatives liabilities		122,896		122,896		155,510		155,510
Financial liabilities measured at amortized cost (*2)
Trade accounts and notes payable		4,117,798		4,117,798		3,477,678		3,477,678
Borrowings		22,704,998		22,956,571		21,063,657		21,217,415
Financial guarantee liabilities		108,161		108,161		88,407		88,407
Others		2,007,114		2,007,114		1,865,683		1,865,683
	￦	28,938,071		29,189,644		26,495,425		26,649,183

(*1) Available-for-sale financial assets which are not measured at fair value are not included.

(*2) The fair value of financial assets and liabilities measured at amortized cost is measured using discounted cash flow method, and the fair value is mainly calculated for the disclosures in the note. On the other hand, the Company has not performed fair value measurement for the financial assets and liabilities measured at amortized cost except borrowings which are classified as fair value hierarchy level 2 since their carrying amounts approximate fair value.

2) The fair values of financial assets and financial liabilities by fair value hierarchy as of December 31, 2016 and 2017 are as follows:

① December 31, 2016

	Level 1		Level 2		Level 3		Total
	(in millions of Won)
Financial assets
Available-for-sale financial assets	￦	1,800,943		—		338,744		2,139,687
Derivatives assets		—		137,236		10,346		147,582
		1,800,943		137,236		349,090		2,287,269
Financial liabilities
Derivatives liabilities	￦	—		122,896		—		122,896

F-89

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

② December 31, 2017

	Level 1		Level 2		Level 3		Total
	(in millions of Won)
Financial assets
Available-for-sale financial assets	￦	1,137,662		17,812		351,419		1,506,893
Financial assets held for trading		—		1,970		—		1,970
Derivatives assets		—		68,290		—		68,290
		1,137,662		88,072		351,419		1,577,153
Financial liabilities
Derivatives liabilities	￦	—		155,510		—		155,510

3) Financial assets and financial liabilities classified as fair value hierarchy level 2

Fair values of derivatives are measured using the derivatives instrument valuation model such as discounted cash flow method and others. Inputs of the financial instrument valuation model include forward rate, interest rate and others. It may change depending on the type of derivatives and the nature of the underlying assets.

4) Financial assets and financial liabilities classified as fair value hierarchy level 3

① Value measurement method and significant but not observable inputs for the financial assets classified as fair value hierarchy level 3 as of December 31, 2017 are as follows:

	Fair value		Valuation technique	Inputs	Range of inputs	Effect on fair value assessment with unobservable input
	(in millions of Won)
Available-for-sale financial assets	￦	235,803	Discounted cash flows	Growth rate	0% ~ 2.0%	As growth rate increases, fair value increases
				Discount rate	0.5% ~ 11.9%	As discount rate increases, fair value decreases
		14,775	Market comparable companies	Price multiple	1.085 ~ 5.245	As price multiple increases, fair value increases
		100,841	Asset value approach	—	—	—

② Sensitivity analysis of financial assets and financial liabilities classified as Level 3 of fair value hierarchy

If other inputs remain constant as of December 31, 2017 and one of the significant but not observable input is changed, the effect on fair value measurement is as follows:

	Input variable	Favorable changes		Unfavorable changes
	(in millions of Won)
Available-for-sale financial assets	Fluctuation 0.5% of growth rate	￦	5,713		4,641
	Fluctuation 0.5% of discount rate		27,238		22,724

F-90

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

③ Changes in fair value of financial assets and financial liabilities classified as Level 3 for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Beginning	￦	466,407			349,090
Acquisition and others		47,493			129,766
Gain (loss) on valuations of derivatives		(59,829	)		(10,346	)
Other comprehensive income (loss)		(38,731	)		35,126
Impairment		(19,111	)		(107,934	)
Disposal and others		(47,139	)		(44,283	)
Ending	￦	349,090			351,419

24. Share Capital and Capital Surplus

(a) Share capital as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(Share, in Won)
Authorized shares		200,000,000		200,000,000
Par value	￦	5,000		5,000
Issued shares(*1)		87,186,835		87,186,835
Shared capital(*2)	￦	482,403,125,000		482,403,125,000

(*1) As of December 31, 2017, total shares of ADRs of 36,840,292 outstanding in overseas stock market are equivalent to 9,210,073 of common stock.

(*2) As of December 31, 2017, the difference between the ending balance of common stock and the par value of issued common stock is ￦46,469 million due to retirement of 9,293,790 treasury stocks.

(b) The changes in issued common stock for the years ended December 31, 2016 and 2017 were as follows:

	2016							2017
	Issued shares		Treasury shares			Number of outstanding shares		Issued shares		Treasury shares			Number of outstanding shares
	(share)
Beginning		87,186,835		(7,191,187	)		79,995,648		87,186,835		(7,189,170	)		79,997,665
Disposal of treasury shares		—		2,017			2,017		—		1,939			1,939
Ending		87,186,835		(7,189,170	)		79,997,665		87,186,835		(7,187,231	)		79,999,604

(c) Capital surplus as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Share premium	￦	463,825		463,825
Gain on disposal of treasury shares		783,788		783,914
Other capital deficit		159,634		174,282
	￦	1,407,247		1,422,021

F-91

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) During the year ended December 31, 2017, POSCO ENERGY CO., LTD., a subsidiary of the Company, issued redeemable convertible preferred shares which are classified as non-controlling interests in the consolidated financial statements. The details of redeemable convertible preferred shares as of December 31, 2017 are as follows:

	Redeemable Convertible Preferred Shares
	(Share, in Won)
Issue date	February 25, 2017
Number of shares issued	8,643,193 shares
Price per share	￦28,346
Voting rights	No voting rights for 3 years from issue date
Dividend rights	Comparative, Non-participating · Minimum dividend rate for 1~3 years: 3.98% · Minimum dividend rate after 4 years: Comparative rate + Issuance spread + 2%
Details about Redemption	Issuer can demand redemption of all or part of redeemable convertible preferred shares every year after the issue date, for a period of 10 years from the issue date.
Details about Conversion	Stockholders of redeemable convertible preferred shares can convert them to common shares from 3 years after the issue date to the end of the redemption period (10 years). Conversion price is equal to issue price, which could be adjusted according to anti-dilution clause.

Redeemable convertible preferred stocks are classified as non-controlling interests in the consolidated financial statements since the issuer has a redemption right and can control the circumstances in which the entity can settle with a variable quantity of equity instruments.

25. Hybrid Bonds

(a) Hybrid bonds classified as equity as of December 31, 2016 and 2017 are as follows:

	Date of issue		Date of maturity		Interest rate (%)		2016			2017
	(in millions of Won)
Hybrid bond 1-1 (*1)		2013-06-13		2043-06-13		4.30	￦	800,000			800,000
Hybrid bond 1-2 (*1)		2013-06-13		2043-06-13		4.60		200,000			200,000
Issuance cost								(3,081	)		(3,081	)
							￦	996,919			996,919

F-92

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*1) Details of hybrid bonds as of December 31, 2017 are as follows:

	Hybrid bond 1-1	Hybrid bond 1-2
	(in millions of Won)
Issue price	800,000	200,000
Maturity date	30 years (POSCO has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-06-12: 4.3% Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.3% · After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	Issue date ~ 2023-06-12: 4.6% Reset every 10 years as follows; · After 10 years: return on government bond (10 years) + 1.4% · After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to POSCO)
Others	POSCO can call the hybrid bond at year 5 and interest payment date afterwards	POSCO can call the hybrid bond at year 10 and interest payment date afterwards

The hybrid bond holders’ preference in the event of liquidation is higher than the common stock holders, but lower than other creditors. The interest accumulated but not paid on the hybrid bonds as of December 31, 2017 amounts to ￦2,389 million.

(b) POSCO ENERGY CO., LTD., a subsidiary of the Company, issued hybrid bonds, which are classified as non-controlling interests in the consolidated financial statements. Hybrid bonds as of December 31, 2016 and 2017 are as follows:

	Date of issue		Date of maturity		Interest rate (%)		2016			2017
	(in millions of Won)
Hybrid bond 1-1 (*1)		2013-08-29		2043-08-29		4.66	￦	165,000			165,000
Hybrid bond 1-2 (*1)		2013-08-29		2043-08-29		4.72		165,000			165,000
Hybrid bond 1-3 (*1)		2013-08-29		2043-08-29		4.72		30,000			30,000
Hybrid bond 1-4 (*1)		2013-08-29		2043-08-29		5.21		140,000			140,000
Issuance cost								(1,532	)		(1,532	)
							￦	498,468			498,468

F-93

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*1) Details of issuance of hybrid bonds of POSCO ENERGY CO., LTD. as of December 31, 2017 are as follows:

	Hybrid bond 1-1	Hybrid bond 1-2 and 1-3	Hybrid bond 1-4
	(in millions of Won)
Issue price	165,000	195,000	140,000
Maturity date	30 years (The Company has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-08-29: 4.66% Reset every 5 years as follows;	Issue date ~ 2018-08-29: 4.72% Reset every 5 years as follows;	Issue date ~ 2023-08-29: 5.21% Reset every 10 years as follows;
	· After 5 years: return on government bond (5 years) + 1.39%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	· After 5 years: return on government bond (5 years) + 1.45%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	· After 10 years: return on government bond (10 years) + 1.55%· After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company but for hybrid bond 1-3, the Company pays every quarter(3/30, 6/30, 9/30, 12/30))
Others	The issuer can call the hybrid bond at year 5 and interest payment date afterwards		The issuer can call the hybrid bond at year 10 and interest payment date afterwards

The hybrid bond holders’ preference in the event of liquidation is higher than the common stock holders, but lower than other creditors. The interest accumulated but not paid on the hybrid bonds as of December 31, 2017 amounts to ￦2,004 million.

26. Reserves

(a) Reserves as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Accumulated comprehensive loss of investments in associates and joint ventures	￦	(301,734	)		(516,528	)
Changes in the unrealized fair value of available-for-sale investments		276,143			230,190
Currency translation differences		(99,264	)		(372,166	)
Gain or losses on valuation of derivatives		—			(136	)
Others		(19,130	)		(23,916	)
	￦	(143,985	)		(682,556	)

(b) Changes in the unrealized fair value of available-for-sale investments for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Beginning balance	￦	(38,294	)		276,143
Changes in the unrealized fair value of available-for-sale investments		218,542			183,761
Reclassification to profit or loss upon disposal		(88,781	)		(299,862	)
Impairment of available-for-sale investments		187,108			96,083
Others		(2,432	)		(25,935	)
Ending balance	￦	276,143			230,190

F-94

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

27. Treasury Shares

Based on the Board of Directors’ resolution, the Company holds treasury shares for business purposes including price stabilization. The changes in treasury shares for the years ended December 31, 2016 and 2017 were as follows:

	2016						2017
	Number of shares			Amount			Number of shares			Amount
	(shares, in millions of Won)
Beginning		7,191,187		￦	1,533,898			7,189,170		￦	1,533,468
Disposal of treasury shares		(2,017	)		(430	)		(1,939	)		(414	)
Ending		7,189,170		￦	1,533,468			7,187,231		￦	1,533,054

28. Revenue

Details of revenue for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Sale of goods	￦	47,018,466		43,683,169		51,357,709
Services		2,489,447		2,276,534		2,064,583
Construction revenue		8,546,454		6,497,723		6,299,483
Rental income		11,757		8,930		6,370
Others		456,144		473,415		458,722
	￦	58,522,268		52,939,771		60,186,867

29. Construction Contracts

(a) Details of in-progress construction contracts as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Aggregate amount of costs incurred	￦	22,012,241			21,404,321
Add: Recognized profits		1,429,555			1,524,208
Less: Recognized losses		(1,139,165	)		(718,593	)
Cumulative construction revenue		22,302,631			22,209,936
Less: Progress billing		(22,483,968	)		(22,265,891	)
Others		9,961			994
	￦	(171,376	)		(54,961	)

(b) Details of due from customers for contract work and due to customers for contract work related to construction as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Unbilled due from customers for contract work	￦	860,287			728,007
Due to customers for contract work		(1,031,663	)		(782,968	)
	￦	(171,376	)		(54,961	)

F-95

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(c) Due to the factors causing the variation of costs for the years ended December 31, 2016 and 2017, the estimated total contract costs have changed. Details of changes in estimated total contract costs and the impact on profit before income taxes for the years ended December 31, 2016, 2017 and future periods are as follows:

	2016			2017
	(in millions of Won)
Changes in estimated total contract costs	￦	532,801			164,812
Changes in profit before income taxes of construction contract:
- Current period		(790,391	)		(69,656	)
- Future periods		69,464			(6,041	)

The effect on the current and future profit is estimated based on the circumstances that have occurred from the commencement date of the contract to the end of period. The estimation is evaluated for the total contract costs and expected total contract revenue as of the end of the period. Also, it may change during future periods.

(d) Uncertainty of estimates

1) Total contract revenues

Total contract revenues are measured based on contractual amount initially agreed. However, the contract revenues can increase due to additional contract work, claims and incentive payments in the course of construction, or decrease due to penalty when the completion of contract is delayed due to the Company’s fault. Therefore, this measurement of contract revenues is affected by the uncertainty of the occurrence of future events.

2) Total contract costs

Construction revenues are recognized based on the percentage of completion, which is measured on the basis of the gross amount incurred to date. Total contract costs are estimated based on estimates of future material costs, labor costs, outsourcing cost and others. There is uncertainty in future estimates due to various internal and external factors such as fluctuation of market, the risk of business partner and the experience of project performance and others. The significant assumptions including uncertainty of the estimate of total contract costs are as follows:

	Method of significant assumption
Material cost	Assumption based on recent purchasing price and quoted market price
Labor cost	Assumption based on standard monthly and daily labor cost
Outsourcing cost	Assumption based on the past experience rate of similar project and market price

Management reviews the assumptions used in estimated contract costs at each reporting period end and adjusts them, if necessary.

F-96

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

30. Selling and Administrative Expenses

(a) Administrative expenses

Administrative expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Wages and salaries	￦	810,851		769,589		774,900
Expenses related to post-employment benefits		87,293		200,956		78,654
Other employee benefits		193,967		176,794		159,920
Travel		48,426		40,828		39,790
Depreciation		105,470		103,442		97,261
Amortization		168,525		139,569		146,314
Communication		12,502		11,186		11,740
Electricity expenses		9,573		7,527		7,050
Taxes and public dues		74,315		78,895		72,826
Rental		119,836		82,005		69,976
Repairs		11,677		11,316		9,859
Entertainment		15,740		13,157		11,582
Advertising		90,698		86,141		119,724
Research & development		135,508		120,608		125,795
Service fees		218,751		201,129		193,387
Vehicles maintenance		10,756		10,090		8,211
Industry association fee		12,603		13,468		10,140
Conference		16,053		13,108		14,494
Increase to provisions		14,900		6,532		10,990
Bad debt expenses		189,616		165,150		173,694
Others		48,188		40,050		40,493
	￦	2,395,248		2,291,540		2,176,800

(b) Selling expenses

Selling expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Freight and custody expenses	￦	1,531,906		1,342,009		1,336,969
Operating expenses for distribution center		11,021		10,315		10,503
Sales commissions		80,165		94,377		115,925
Sales advertising		3,220		5,117		3,800
Sales promotion		22,443		10,670		12,414
Sample		2,576		2,335		1,989
Sales insurance premium		30,682		31,379		36,546
Contract cost		38,425		49,480		23,061
Others		8,518		8,004		16,070
	￦	1,728,956		1,553,686		1,557,277

F-97

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

31. Research and Development Expenditures Recognized as Expenses

Research and development expenditures recognized as expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Administrative expenses	￦	135,508		120,608		125,795
Cost of sales		356,173		324,190		361,093
	￦	491,681		444,798		486,888

32. Other Operating Income and Expenses

Details of other operating income and expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Other operating income
Gain on disposal of assets held for sale	￦	227,956			23,112			1,180
Gain on disposal of investments in subsidiaries, associates and joint ventures		88,718			23,305			81,794
Gain on disposal of property, plant and equipment		22,730			23,826			32,145
Gain on disposal of intangible assets		1,432			671			23,391
Recovery of allowance for other doubtful accounts		10,452			12,658			2,743
Gain on valuation of firm commitment		—			—			56,301
Rental revenues		1,019			1,771			1,498
Gain on insurance proceeds		14,976			22,400			5,878
Others (*1)		181,765			107,393			246,294
	￦	549,048			215,136			451,224
Other operating expenses
Impairment losses on assets held for sale	￦	(133,547	)		(24,890	)		—
Loss on disposal of assets held for sale		(190,357	)		(254	)		(608	)
Loss on disposal of investments in subsidiaries, associates and joint ventures		(18,996	)		(22,499	)		(19,985	)
Loss on disposal of property, plant and equipment		(101,732	)		(86,622	)		(151,343	)
Impairment losses on property, plant and equipment		(136,269	)		(196,882	)		(117,231	)
Impairment losses on goodwill and intangible assets		(161,412	)		(127,875	)		(167,995	)
Other bad debt expenses		(158,071	)		(50,225	)		(100,920	)
Loss on valuation of firm commitment		—			—			(43,164	)
Idle tangible asset expenses		(12,773	)		(6,437	)		(10,490	)
Incease to provisions		(18,396	)		(53,058	)		(33,964	)
Donations		(62,957	)		(43,810	)		(51,424	)
Others (*2)		(447,788	)		(143,168	)		(95,172	)
	￦	(1,442,298	)		(755,720	)		(792,296	)

(*1) The Company recognized the refund of VAT and others amounting to ￦160,501 million as other operating income for the year ended December 31, 2017, based on the result of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years tax audits for rectification were finalized.

(*2) The Company paid ￦299,037 million in connection with its settlement with Nippon Steel & Sumitomo Metal Corporation for a civil lawsuit regarding improperly acquired trade secrets and patents for the year ended December 31, 2015.

F-98

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

33. Finance Income and Costs

Details of finance income and costs for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Finance income
Interest income	￦	210,193			182,475			212,451
Dividend income		183,712			41,000			92,962
Gain on foreign currency transactions		1,025,240			1,032,552			785,616
Gain on foreign currency translations		466,090			377,723			564,016
Gain on derivatives transactions		366,482			316,524			210,727
Gain on valuations of derivatives		155,334			147,111			64,735
Gain on disposals of available-for-sale financial assets		139,136			130,830			425,684
Others		10,886			3,765			16,476
	￦	2,557,073			2,231,980			2,372,667
Finance costs
Interest expenses	￦	(788,772	)		(658,726	)		(653,115	)
Loss on foreign currency transactions		(1,157,161	)		(1,147,192	)		(756,654	)
Loss on foreign currency translations		(716,722	)		(405,391	)		(422,880	)
Loss on derivatives transactions		(343,118	)		(338,314	)		(236,273	)
Loss on valuation of derivatives		(72,133	)		(162,676	)		(226,487	)
Impairment loss on available-for-sale financial assets		(142,781	)		(248,404	)		(123,214	)
Others		(166,367	)		(53,487	)		(65,654	)
	￦	(3,387,054	)		(3,014,190	)		(2,484,277	)

34. Expenses by Nature

Expenses that are recorded by nature as cost of sales, selling and administrative expenses and other operating expenses in the statements of comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows (excluding finance costs and income tax expense):

	2015		2016		2017
	(in millions of Won)
Raw material used, changes in inventories and others	￦	33,939,108		30,177,732		35,584,184
Employee benefits expenses (*2)		3,472,295		3,444,276		3,357,861
Outsourced processing cost		8,681,271		7,678,055		7,074,948
Electricity expenses		1,251,546		1,018,429		933,045
Depreciation (*1)		2,836,663		2,835,843		2,887,646
Amortization		381,583		378,004		409,774
Freight and custody expenses		1,531,906		1,342,009		1,336,969
Sales commissions		80,165		94,377		115,925
Loss on disposal of property, plant and equipment		101,732		86,622		151,343
Impairment loss on property, plant and equipment		136,269		196,882		117,231
Impairment loss on goodwill and intangible assets		161,412		127,875		167,995
Increase to provisions		86,903		189,914		215,383
Donations		62,957		43,810		51,424
Other expenses		4,861,126		3,258,583		4,038,242
	￦	57,584,936		50,872,411		56,441,970

(*1) Includes depreciation expense of investment property.

F-99

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*2) The details of employee benefits expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Wages and salaries	￦	3,186,237		3,016,488		3,105,364
Expenses related to post-employment benefits		286,058		427,788		252,497
	￦	3,472,295		3,444,276		3,357,861

35. Income Taxes

(a) Income tax expense for the years ended December 31, 2015, 2016 and 2017 was as follows:

	2015			2016			2017
	(in millions of Won)
Current income taxes	￦	553,041			699,269			864,143
Deferred income tax due to temporary differences		(253,860	)		(209,706	)		300,037
Items recorded directly in equity		(32,621	)		(110,019	)		21,560
Income tax expense	￦	266,560			379,544			1,185,740

(b) The income taxes credited (charged) directly to equity for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Net changes in the unrealized fair value of available-for-sale investments	￦	60,077			(100,550	)		1,271
Loss (gain) on sale of treasury shares		12			(10	)		(40	)
Other capital surplus		(86,765	)		—			—
Others		(5,945	)		(9,459	)		20,329
	￦	(32,621	)		(110,019	)		21,560

(c) The following table reconciles the calculated income tax expense based on POSCO’s statutory rate (24.2%) to the actual amount of taxes recorded by the Company for the years ended December 31, 2015, 2016 and 2017.

	2015			2016			2017
	(in millions of Won)
Profit before income tax expense	￦	150,345			1,411,609			4,095,051
Income tax expense computed at statutory rate		35,921			341,148			990,540
Adjustments:
Tax credits		(152,139	)		(30,124	)		(40,757	)
Over provisions from prior years		(47,053	)		(11,829	)		(20,912	)
Investment in subsidiaries, associates and joint ventures		439,575			76,751			55,113
Tax effects due to permanent differences		(26,045	)		(9,962	)		4,798
Effect of tax rate change (*1)		—			—			175,647
Others		16,301			13,560			21,311
		230,639			38,396			195,200
Income tax expense	￦	266,560			379,544			1,185,740
Effective tax rate (%)		177.30	%		26.89	%		28.96	%

(*1) During the year ended December 31, 2017, the statutory rate changed from 24.2% to 27.5% for taxable income in excess of ￦300,000 million was enacted as a result of a revision to Korean tax law, which will be effective from 2018.

F-100

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) The movements in deferred tax assets (liabilities) for the years ended December 31, 2016 and 2017 were as follows:

	2016									2017
	Beginning			Inc. (Dec.)			Ending			Beginning			Inc. (Dec.)			Ending
	(in millions of Won)
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	202,592			10,527			213,119			213,119			60,875			273,994
Reserve for technology developments		(177,676	)		85,716			(91,960	)		(91,960	)		53,973			(37,987	)
PP&E — Depreciation		(15,240	)		3,601			(11,639	)		(11,639	)		26,280			14,641
Share of profit or loss of equity-accounted investees		(45,174	)		115,433			70,259			70,259			125,783			196,042
Allowance for inventories valuation		13,373			2,278			15,651			15,651			(4,871	)		10,780
PP&E — Revaluation		(1,393,501	)		(130,648	)		(1,524,149	)		(1,524,149	)		(304,015	)		(1,828,164	)
Prepaid expenses		19,180			485			19,665			19,665			335			20,000
PP&E — Impairment loss		8,055			(2,760	)		5,295			5,295			245			5,540
Gain or loss on foreign currency translation		(29,355	)		23,398			(5,957	)		(5,957	)		(42,515	)		(48,472	)
Defined benefit obligations		354,175			7,663			361,838			361,838			68,279			430,117
Plan assets		(287,839	)		(28,686	)		(316,525	)		(316,525	)		(36,129	)		(352,654	)
Provision for construction losses		612			385			997			997			(556	)		441
Provision for construction warranty		21,604			2,718			24,322			24,322			4,395			28,717
Accrued income		(8,982	)		(459	)		(9,441	)		(9,441	)		(3,474	)		(12,915	)
Impairment loss on AFS		266,474			(21,306	)		245,168			245,168			(42,373	)		202,795
Difference in acquisition costs of treasury shares		62,116			(17	)		62,099			62,099			8,448			70,547
Others		296,207			107,541			403,748			403,748			(27,740	)		376,008
		(713,379	)		175,869			(537,510	)		(537,510	)		(113,060	)		(650,570	)
Deferred income taxes recognized directly to equity
Loss (gain) on valuation of available-for-sale investments		50,043			(100,550	)		(50,507	)		(50,507	)		1,271			(49,236	)
Others		61,291			(9,459	)		51,832			51,832			20,329			72,161
		111,334			(110,009	)		1,325			1,325			21,600			22,925
Deferred tax from tax credit
Tax credit carry-forward and others		277,261			30,074			307,335			307,335			(189,303	)		118,032
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		(18,089	)		104,219			86,130			86,130			(17,704	)		68,426
	￦	(342,873	)		200,153			(142,720	)		(142,720	)		(298,467	)		(441,187	)

F-101

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(e) Deferred tax assets and liabilities as of December 31, 2016 and 2017 are as follows:

	2016								2017
	Assets		Liabilities			Net			Assets		Liabilities			Net
	(in millions of Won)
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	213,119		—			213,119			273,994		—			273,994
Reserve for technology developments		—		(91,960	)		(91,960	)		—		(37,987	)		(37,987	)
PP&E — Depreciation		50,843		(62,482	)		(11,639	)		59,912		(45,271	)		14,641
Share of profit or loss of equity-accounted investees		178,538		(108,279	)		70,259			236,637		(40,595	)		196,042
Allowance for inventories valuation		15,651		—			15,651			10,780		—			10,780
PP&E — Revaluation		—		(1,524,149	)		(1,524,149	)		—		(1,828,164	)		(1,828,164	)
Prepaid expenses		19,665		—			19,665			20,000		—			20,000
PP&E — Impairment loss		5,397		(102	)		5,295			5,639		(99	)		5,540
Gain or loss on foreign currency translation		99,836		(105,793	)		(5,957	)		113,760		(162,232	)		(48,472	)
Defined benefit obligations		361,838		—			361,838			430,117		—			430,117
Plan assets		—		(316,525	)		(316,525	)		—		(352,654	)		(352,654	)
Provision for construction losses		997		—			997			441		—			441
Provision for construction warranty		24,322		—			24,322			28,717		—			28,717
Accrued income		—		(9,441	)		(9,441	)		—		(12,915	)		(12,915	)
Impairment loss on AFS		245,168		—			245,168			202,795		—			202,795
Difference in acquisition costs of treasury shares		62,099		—			62,099			70,547		—			70,547
Others		452,425		(48,677	)		403,748			473,025		(97,017	)		376,008
		1,729,898		(2,267,408	)		(537,510	)		1,926,364		(2,576,934	)		(650,570	)
Deferred income taxes recognized directly to equity
Loss (gain) on valuation of available-for-sale investments		50,245		(100,752	)		(50,507	)		110,865		(160,101	)		(49,236	)
Others		65,532		(13,700	)		51,832			92,981		(20,820	)		72,161
		115,777		(114,452	)		1,325			203,846		(180,921	)		22,925
Deferred tax from tax credit
Tax credit carry-forward and others		307,335		—			307,335			118,032		—			118,032
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		561,506		(475,376	)		86,130			563,406		(494,980	)		68,426
	￦	2,714,516		(2,857,236	)		(142,720	)		2,811,648		(3,252,835	)		(441,187	)

(f) As of December 31, 2016 and 2017, The Company did not recognize income tax effects associated with deductible temporary differences of ￦4,612,900 million and ￦5,300,667 million, respectively, mainly relating to loss of subsidiaries and associates because realization is not considered probable. As of December 31, 2016 and 2017, the Company did not recognize income tax effects associated with taxable temporary differences of ￦3,933,428 million and ￦4,362,127 million (deferred tax liabilities of ￦951,890 million and ￦1,137,632 million), respectively, mainly relating to increase in retained earnings of subsidiaries since it is probable that the temporary difference will not reverse in the foreseeable future.

F-102

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

36. Earnings per Share

Basic and diluted earnings per share for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in Won, except per share information)
Profit attribute to controlling interest	￦	171,493,811,117			1,354,806,734,940			2,756,230,487,872
Interests of hybrid bonds		(33,029,632,499	)		(33,225,163,081	)		(33,048,799,997	)
Weighted-average number of common shares outstanding (*1)		79,993,834			79,996,389			79,998,600
Basic and diluted earnings per share	￦	1,731			16,521			34,040

(*1) The weighted-average number of common shares used to calculate basic and diluted earnings per share are as follows:

(shares)	2015			2016			2017
Total number of common shares issued		87,186,835			87,186,835			87,186,835
Weighted-average number of treasury shares		(7,193,001	)		(7,190,446	)		(7,188,235	)
Weighted-average number of common shares outstanding		79,993,834			79,996,389			79,998,600

Since there were no potential shares of common stock which had dilutive effects as of December 31, 2015, 2016 and 2017, diluted earnings per share is equal to basic earnings per share.

F-103

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

37. Related Party Transactions

(a) Significant transactions between the controlling company and related parties for the years ended December 31, 2015, 2016 and 2017 were as follows:

1) For the year ended December 31, 2015

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	4,441		145		19		427,760		2,250		37,488
POSCO Processing & Service		1,074,826		24		437,626		—		—		2,281
POSCO COATED & COLOR STEEL Co., Ltd.		380,626		—		—		—		9,359		104
POSCO ICT (*3)		1,259		7		—		210,877		29,612		182,745
eNtoB Corporation		—		—		261,989		6,501		130		22,017
POSCO CHEMTECH		436,594		30,343		519,956		9,515		297,183		1,773
POSCO ENERGY CO., LTD.		188,458		1,359		—		—		—		6
POSCO TMC Co., Ltd.		263,242		—		—		—		1,497		1,560
POSCO AST		362,658		15		4,115		—		39,175		1,611
POSHIMETAL Co., Ltd.		10,777		151		145,165		—		—		46
POSCO DAEWOO Corporation		3,505,187		34,334		46,675		—		—		480
SeAH Changwon Integrated Special Steel (*4)		2,811		176,904		8,239		—		515		75
POSCO PLANTEC Co., Ltd. (*4)		4,280		33		2,544		125,192		15,135		13,649
POSCO Thainox Public Company Limited		268,576		10		5,147		—		—		34
POSCO America Corporation		624,549		6		—		—		—		725
POSCO Canada Ltd.		—		—		111,243		—		—		—
POSCO Asia Co., Ltd.		1,822,932		960		269,086		—		513		2,273
Qingdao Pohang Stainless Steel Co., Ltd.		118,845		—		—		—		—		220
POSCO JAPAN Co., Ltd.		1,051,910		9,383		25,957		2,278		201		2,754
POSCO MEXICO S.A. DE C.V.		270,184		80		—		—		—		11
PT. KRAKATAU POSCO		—		—		118,888		—		—		—
POSCO Maharashtra Steel Private Limited		421,244		752		—		—		—		31
Others (*5)		867,334		14,474		223,393		113,769		212,539		129,506
		11,680,733		268,980		2,180,042		895,892		608,109		399,389
Associates and joint ventures
SeAH Changwon Integrated Special Steel (*4)		6,042		—		3,802		—		419		—
POSCO PLANTEC Co., Ltd. (*4)		147		14		1,017		82,338		3,513		4,676
SNNC		4,673		594		422,420		—		—		—
POSCO-SAMSUNG-Slovakia Processing center		26,379		—		—		—		—		—
Others (*6,7)		28,841		40,600		51,855		—		—		—
		66,082		41,208		479,094		82,338		3,932		4,676
	￦	11,746,815		310,188		2,659,136		978,230		612,041		404,065

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*4) During the year ended December 31, 2015, it was reclassified from a subsidiary to an associate.

(*5) During the year ended December 31, 2015, the Company borrowed USD 17.42 million from POSCO-Uruguay S.A., a subsidiary of the Company, and the entire amount was repaid as of December 31, 2015.

(*6) During the year ended December 31, 2015, the Company lent USD 60 million to CSP-Compania Siderurgica do Pecem, an associate of the Company, and the entire amount of loan was collected as of December 31, 2015.

(*7) The Company has collected loans of USD 3.85 million from LLP POSUK Titanium, an associate of the Company for the year ended December 31, 2015

F-104

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) For the year ended December 31, 2016

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	29,511		16,661		8		183,768		—		24,511
POSCO Processing & Service		1,212,220		5,778		549,803		2,896		22,704		2,445
POSCO COATED & COLOR STEEL Co., Ltd.		326,078		2,560		—		—		12,232		126
POSCO ICT (*3)		1,224		727		—		219,301		32,456		171,107
eNtoB Corporation		—		5		278,016		9,836		212		19,436
POSCO CHEMTECH		319,164		33,784		502,448		14,847		290,427		5,139
POSCO ENERGY CO., LTD.		187,311		1,382		—		—		—		7
POSCO TMC Co., Ltd. (*4)		219,489		—		2		—		863		1,177
POSCO AST (*4)		152,098		1		—		—		19,695		922
POSCO DAEWOO Corporation		3,227,716		34,341		92,203		—		343		—
POSCO Thainox Public Company Limited		237,471		2,915		9,593		—		19		548
POSCO America Corporation		469,543		—		284		—		—		1,103
POSCO Canada Ltd.		275		—		148,528		—		—		—
POSCO Asia Co., Ltd.		1,758,080		1,373		403,174		247		939		3,602
Qingdao Pohang Stainless Steel Co., Ltd.		135,405		—		—		—		—		525
POSCO JAPAN Co., Ltd.		1,112,489		128		23,217		3,744		345		3,841
POSCO-VIETNAM Co., Ltd.		226,063		445		—		—		—		—
POSCO MEXICO S.A. DE C.V.		274,210		462		—		—		—		—
POSCO Maharashtra Steel Private Limited		355,829		2,613		—		—		—		93
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		149,911		—		—		—		—		—
Others		766,263		22,717		207,601		62,202		212,344		145,562
		11,160,350		125,892		2,214,877		496,841		592,579		380,144
Associates and joint ventures
SeAH Changwon Integrated Special Steel		28		—		1,095		—		627		—
POSCO PLANTEC Co., Ltd.		2,245		48		3,533		244,898		16,812		8,146
SNNC		6,004		1,042		487,395		—		—		2
POSCO-SAMSUNG-Slovakia Processing center		44,686		—		—		—		—		—
KOBRASCO		—		29,297		—		—		—		—
Others		26,625		13,122		175,246		—		—		—
		79,588		43,509		667,269		244,898		17,439		8,148
	￦	11,239,938		169,401		2,882,146		741,739		610,018		388,292

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*4) During the year ended December 31, 2016, it was merged into POSCO Processing & Service.

F-105

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

3) For the year ended December 31, 2017

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries (*3)
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	3,328		71		—		151,639		32		18,352
POSCO Processing & Service		298,781		1		113,628		4,595		8,309		404
POSCO COATED & COLOR STEEL Co., Ltd.		417,369		3,533		—		—		8,483		106
POSCO ICT (*4)		1,697		5,097		—		315,748		29,773		183,226
eNtoB Corporation		1		30		330,921		8,215		139		26,023
POSCO CHEMTECH		359,862		33,076		479,896		23,043		296,296		6,860
POSCO ENERGY CO., LTD.		179,966		1,456		—		—		—		2
POSCO DAEWOO Corporation		5,214,127		35,182		550,258		221		44,108		1,948
POSCO Thainox Public Company Limited		218,005		9,780		10,168		—		—		—
POSCO America Corporation		345,225		—		90		—		—		1,776
POSCO Canada Ltd.		439		690		278,915		—		—		—
POSCO Asia Co., Ltd.		1,949,354		1,454		365,025		337		1,625		4,982
Qingdao Pohang Stainless Steel Co., Ltd.		161,803		—		—		—		—		176
POSCO JAPAN Co., Ltd.		1,436,159		20		26,256		621		—		44,829
POSCO-VIETNAM Co., Ltd.		212,883		—		—		—		—		7
POSCO MEXICO S.A. DE C.V.		276,387		—		—		—		—		1,749
POSCO Maharashtra Steel Private Limited		467,206		—		—		—		—		65
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		192,467		—		—		—		—		—
Others		932,048		10,073		262,828		25,270		240,687		118,665
		12,667,107		100,463		2,417,985		529,689		629,452		409,170
Associates and joint ventures (*3)
POSCO PLANTEC Co., Ltd.		2,947		112		5,487		300,041		20,718		19,763
SNNC		6,734		712		554,151		—		—		4
POSCO-SAMSUNG-Slovakia Processing Center		52,779		—		—		—		—		—
Roy Hill Holdings Pty Ltd		—		—		697,096		—		—		—
CSP — Compania Siderurgica do Pecem		7,384		—		159,501		—		—		—
Others		14,943		52,583		79,103		—		—		3
		84,787		53,407		1,495,338		300,041		20,718		19,770
	￦	12,751,894		153,870		3,913,323		829,730		650,170		428,940

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) As of December 31, 2017, the Company provided guarantees to related parties (Note 38).

(*4) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

F-106

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) The related account balances of significant transactions between the controlling company and related companies as of December 31, 2016 and 2017 are as follows:

1) December 31, 2016

	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Trade accounts and notes payable		Accounts payable		Others		Total
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	3		3,359		3,362		—		9,825		515		10,340
POSCO Processing & Service		207,744		178		207,922		1,085		5,367		5,184		11,636
POSCO COATED & COLOR STEEL Co., Ltd.		48,716		324		49,040		—		5		1,600		1,605
POSCO ICT		—		128		128		1,062		89,382		6,074		96,518
eNtoB Corporation		—		—		—		9,948		29,310		15		39,273
POSCO CHEMTECH		27,253		3,868		31,121		54,702		11,870		19,282		85,854
POSCO ENERGY CO., LTD.		18,701		2,012		20,713		—		—		1,425		1,425
POSCO DAEWOO Corporation		182,700		11,184		193,884		460		183		49		692
POSCO Thainox Public Company Limited		62,034		8		62,042		—		224		—		224
POSCO America Corporation		10,008		—		10,008		—		—		—		—
POSCO Asia Co., Ltd.		375,823		458		376,281		25,101		—		—		25,101
Qingdao Pohang Stainless Steel Co., Ltd.		25,386		—		25,386		—		5		—		5
POSCO MEXICO S.A. DE C.V.		114,166		1,024		115,190		—		—		—		—
POSCO Maharashtra Steel Private Limited		208,737		9,923		218,660		—		—		—		—
Others		333,031		64,526		397,557		17,374		46,455		26,974		90,803
		1,614,302		96,992		1,711,294		109,732		192,626		61,118		363,476
Associates and joint ventures
POSCO PLANTEC Co., Ltd.		30		9		39		2,125		39,647		—		41,772
SNNC		223		26		249		40,201		—		—		40,201
Others		800		1		801		991		17,685		—		18,676
		1,053		36		1,089		43,317		57,332		—		100,649
	￦	1,615,355		97,028		1,712,383		153,049		249,958		61,118		464,125

F-107

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) December 31, 2017

	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Trade accounts and notes payable		Accounts payable		Others		Total
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	2		2,908		2,910		—		21,965		674		22,639
POSCO COATED & COLOR STEEL Co., Ltd.		58,184		324		58,508		—		5		504		509
POSCO ICT		55		217		272		1,458		72,586		27,009		101,053
eNtoB Corporation		—		—		—		12,252		31,899		20		44,171
POSCO CHEMTECH		61,810		3,589		65,399		51,774		20,313		17,568		89,655
POSCO ENERGY CO., LTD.		33,239		1,673		34,912		—		—		1,425		1,425
POSCO DAEWOO Corporation		483,915		12,739		496,654		10,213		2,145		5,794		18,152
POSCO Thainox Public Company Limited		57,826		—		57,826		1,204		—		—		1,204
POSCO America Corporation		5,365		—		5,365		—		—		—		—
POSCO Asia Co., Ltd.		404,857		541		405,398		9,811		24		—		9,835
Qingdao Pohang Stainless Steel Co., Ltd.		31,693		—		31,693		—		—		—		—
POSCO MEXICO S.A. DE C.V.		55,695		530		56,225		—		—		—		—
POSCO Maharashtra Steel Private Limited		392,630		5,733		398,363		—		—		—		—
Others		384,385		49,403		433,788		15,038		59,575		31,118		105,731
		1,969,656		77,657		2,047,313		101,750		208,512		84,112		394,374
Associates and joint ventures
POSCO PLANTEC Co., Ltd.		1,946		9		1,955		3,842		15,723		—		19,565
SNNC		648		61		709		49,506		3		—		49,509
Others		8,350		904		9,254		824		—		—		824
		10,944		974		11,918		54,172		15,726		—		69,898
	￦	1,980,600		78,631		2,059,231		155,922		224,238		84,112		464,272

(c) Significant transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2015, 2016 and 2017 were as follows:

1) December 31, 2015

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
SeAH Changwon integrated Special Steel	￦	32,802		—		49,862		1,977
POSCO PLANTEC Co., Ltd.		10,543		—		5,953		6,386
New Songdo International City Development, LLC		420,094		—		—		667
SNNC		32,160		44		6,518		53,260
Posco e&c Songdo International Building		6,278		—		—		25,197
VSC POSCO Steel Corporation		37,416		—		2,395		3
USS-POSCO Industries		353,626		—		1,109		—
CSP — Compania Siderurgica do Pecem		845,979		—		—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		68,300		111		70,236		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		3		—		23,320		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		9,668		—		—		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		30,310		—		4		—
Zhangjiagang Pohang Refractories Co., Ltd.		970		1,248		17,484		2,023
Sebang Steel		—		—		29,007		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		214,521		—		3,960		3,190
DMSA/AMSA		800		9,322		241,074		—
South-East Asia Gas Pipeline Company Ltd.		—		47,556		—		—
Others		415,217		17,793		18,518		2,683
	￦	2,478,687		76,074		469,440		95,386

F-108

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) December 31, 2016

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
SeAH Changwon integrated Special Steel	￦	16,294		—		22,029		—
POSCO PLANTEC Co., Ltd.		21,659		5		3,335		5,912
New Songdo International City Development, LLC		226,042		—		—		14
SNNC		29,330		—		21,479		9,494
Posco e&c Songdo International Building		4,245		—		—		16,219
Chun-cheon Energy Co., Ltd		288,307		—		—		—
Noeul Green Energy		107,268		—		—		—
Incheon-Gimpo Expressway Co., Ltd.		102,183		—		—		—
VSC POSCO Steel Corporation		43,650		47		479		—
USS-POSCO Industries		287,072		—		1,195		—
CSP — Compania Siderurgica do Pecem		157,814		—		—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		61,844		—		57,179		—
LLP POSUK Titanium		—		—		14,575		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		—		24,365		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		15,759		—		—		—
PT. Batutua Tembaga Raya		—		—		13,079		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		31,711		—		65		—
Zhangjiagang Pohang Refractories Co., Ltd.		250		14		364		2,472
Sebang Steel		—		—		26,276		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		157,886		—		3,535		—
DMSA/AMSA		—		—		72,582		—
South-East Asia Gas Pipeline Company Ltd.		—		87,973		—		—
Others		195,139		11,184		16,664		1,801
	￦	1,746,453		99,223		277,201		35,912

3) December 31, 2017

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	19,513		—		98		8,113
New Songdo International City Development, LLC		223,567		13,207		—		49
SNNC		26,288		—		3,578		17,985
Chun-cheon Energy Co., Ltd		42,147		—		—		—
Noeul Green Energy		11,863		—		—		2,178
VSC POSCO Steel Corporation		19,404		—		188		—
USS-POSCO Industries		26,899		107		2,222		—
CSP — Compania Siderurgica do Pecem		241,299		—		101,018		21,154
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		38,484		—		47,241		—
LLP POSUK Titanium		—		—		3,972		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		4		—		20,145		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		20,004		—		—		—
PT. Batutua Tembaga Raya		—		—		21,024		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		34,088		—		192		—
Zhangjiagang Pohang Refractories Co., Ltd.		—		—		87		1,632
Sebang Steel		441		—		23,778		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		43,764		—		—		—
DMSA/AMSA		—		99		47,092		—
South-East Asia Gas Pipeline Company Ltd.		—		62,423		—		—
Others		272,107		43,126		19,520		19,483
	￦	1,019,872		118,962		290,155		70,594

F-109

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) The related account balances of significant transactions between the Company, excluding the controlling company, and related companies as of December 31, 2016 and December 31, 2017 are as follows:

1) December 31, 2016

	Receivables (*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	4,709		—		6		4,715		2,718		8,521		11,239
New Songdo International City Development, LLC		255,822		—		5,725		261,547		—		—		—
Chun-cheon Energy Co., Ltd		12,142		—		—		12,142		—		3,171		3,171
VSC POSCO Steel Corporation		5,265		—		—		5,265		—		—		—
USS-POSCO Industries		583		—		—		583		75		—		75
Nickel Mining Company SAS		133		60,425		116		60,674		—		—		—
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.		62,814		60,425		1,643		124,882		—		875		875
CSP — Compania Siderurgica do Pecem		224,760		—		149,700		374,460		—		109,272		109,272
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		3,279		6,647		6		9,932		1,365		—		1,365
PT. Batutua Tembaga Raya		—		38,120		—		38,120		2,293		—		2,293
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		9,292		8,460		43		17,795		40		—		40
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO.,LTD.		100,367		—		—		100,367		—		—		—
DMSA/AMSA		—		90,638		—		90,638		—		—		—
South-East Asia Gas Pipeline Company Ltd.		—		276,605		48		276,653		—		—		—
Others		184,402		142,812		6,593		333,807		4,615		750		5,365
	￦	863,568		684,132		163,880		1,711,580		11,106		122,589		133,695

(*1) As of December 31, 2016, the Company recognizes bad debt allowance for receivables amounting to ￦48,891 million.

F-110

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

2) December 31, 2017

	Receivables (*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	2,287		—		5		2,292		3,442		5,595		9,037
New Songdo International City Development, LLC		484,038		282,775		1,696		768,509		—		7,146		7,146
Chun-cheon Energy Co., Ltd		—		—		21		21		—		9,617		9,617
VSC POSCO Steel Corporation		16		—		—		16		17		—		17
USS-POSCO Industries		—		—		4		4		—		—		—
Nickel Mining Company SAS		—		59,668		118		59,786		—		—		—
CSP — Compania Siderurgica do Pecem		380,180		—		13,443		393,623		—		29,700		29,700
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		2,108		5,357		6		7,471		2,449		—		2,449
PT. Batutua Tembaga Raya		24		29,048		—		29,072		—		—		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		8,067		5,357		32		13,456		107		—		107
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO.,LTD.		715		—		—		715		—		526		526
DMSA/AMSA		—		69,713		4,443		74,156		—		—		—
South-East Asia Gas Pipeline Company Ltd.		—		229,880		—		229,880		—		—		—
Others		134,397		134,506		6,885		275,788		1,856		2,005		3,861
	￦	1,011,832		816,304		26,653		1,854,789		7,871		54,589		62,460

(*1) As of December 31, 2017, the Company recognizes bad debt allowance for receivables amounting to ￦4,217 million.

F-111

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(e) Significant financial transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2016 and 2017 were as follows:

1) December 31, 2016

	Beginning		Lend		Collect			Others (*3)			Ending
	(in millions of Won)
Associates and joint ventures
METAPOLIS Co.,Ltd.	￦	26,000		—		(12,730	)		—			13,270
Posco e&c Songdo International Building (*1)		—		298,865		—			(298,865	)		—
DMSA/AMSA (*2)		99,854		11,774		—			(20,990	)		90,638
South-East Asia Gas Pipeline Company Ltd.		283,954		27,087		(43,080	)		8,644			276,605
PT. Batutua Tembaga Raya		36,830		—		—			1,290			38,120
PT. Tanggamus Electric Power		2,359		1,174		—			73			3,606
PT. Wampu Electric Power		4,454		1,169		—			138			5,761
PT. POSMI Steel Indonesia		4,688		—		—			146			4,834
Nickel Mining Company SAS		17,580		40,594		—			2,251			60,425
POSK(Pinghu) Steel Processing Center Co., Ltd.		5,743		5,683		(11,366	)		(60	)		—
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.		58,600		—		—			1,825			60,425
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		10,782		—		(4,471	)		336			6,647
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		—		6,959		—			292			7,251
Hamparan Mulya		3,516		—		—			110			3,626
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		5,274		—		—			164			5,438
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		11,720		—		(3,480	)		220			8,460
POS-SeAH Steel Wire (Thailand) Co., Ltd.		—		6,959		—			292			7,251
AMCI (WA) PTY LTD		85,168		4,665		—			1,942			91,775
	￦	656,522		404,929		(75,127	)		(302,192	)		684,132

(*1) During the year ended December 31, 2016, it was classified as a subsidiary from an associate.

(*2) During the year ended December 31, 2016, loans amounting to ￦24,624 million have been converted to shares of DMSA/AMSA, and its amount is included in others.

(*3) Includes adjustments of foreign currency translation differences and others.

2) December 31, 2017

	Beginning		Lend		Collect			Others (*4)			Ending
		(in millions of Won)
Associates and joint ventures
METAPOLIS Co.,Ltd. (*1)	￦	13,270		—		—			(13,270	)		—
New Songdo International City Development, LLC		—		484,644		(201,869	)		—			282,775
GALE International Korea, LLC		—		2,000		—			—			2,000
DMSA/AMSA (*2)		90,638		2,956		—			(23,881	)		69,713
South-East Asia Gas Pipeline Company Ltd.		276,605		28,967		(46,252	)		(29,440	)		229,880
PT. Batutua Tembaga Raya		38,120		—		—			(9,072	)		29,048
PT. Tanggamus Electric Power		3,606		—		—			(409	)		3,197
PT. Wampu Electric Power		5,761		—		—			(654	)		5,107
PT. POSMI Steel Indonesia		4,834		—		—			(548	)		4,286
Nickel Mining Company SAS		60,425		—		—			(757	)		59,668
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. (*1)		60,425		—		—			(60,425	)		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		6,647		—		(577	)		(713	)		5,357
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		7,251		—		—			(823	)		6,428
Hamparan Mulya		3,626		—		(3,626	)		—			—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		5,438		—		(5,438	)		—			—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		8,460		—		(2,262	)		(841	)		5,357
POS-SeAH Steel Wire (Thailand) Co., Ltd.		7,251		—		(1,142	)		319			6,428
AMCI (WA) PTY LTD		91,775		4,327		—			(4,041	)		92,061
POS-AUSTEM YANTAI AUTOMOTIVE CO.,LTD (*3)		—		—		—			5,357			5,357
POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD (*3)		—		—		—			8,571			8,571
SAMHWAN VINA CO., LTD (*3)		—		—		—			1,071			1,071
	￦	684,132		522,894		(261,166	)		(129,556	)		816,304

F-112

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(*1) During the year ended December 31, 2017, it was excluded from associates.

(*2) During the year ended December 31, 2017, loans amounting to ￦13,712 million have been converted to shares of DMSA/AMSA, and its amount is included in others.

(*3) During the year ended December 31, 2017, it was newly classified to associates and joint ventures.

(*4) Includes adjustments of foreign currency translation differences and others.

(f) For the years ended December 31, 2015, 2016 and 2017, details of compensation to key management officers were as follows:

	2015		2016		2017
	(in millions of Won)
Short-term benefits	￦	111,278		90,916		112,688
Long-term benefits		19,513		17,905		8,632
Retirement benefits		21,850		17,870		20,422
	￦	152,641		126,691		141,742

Key management officers include directors (including non-standing directors), executive officials and fellow officials who have significant influences and responsibilities in the Company’s business and operations.

38. Commitments and Contingencies

(a) Contingent liabilities

Contingent liabilities may develop in a way not initially expected. Therefore, management continuously assesses contingent liabilities to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognized in the consolidated financial statements of the period in which the change in probability occurs (except in the extremely rare circumstances where no reliable estimate can be made).

Management makes estimates and assumptions that affect disclosures of commitments and contingencies. All estimates and assumptions are based on the evaluation of current circumstances and appraisals with the supports of internal specialists or external consultants.

Management regularly analyzes current information about these matters and provides for probable contingent losses including the estimate of legal expense to resolve the matters. Internal and external lawyers are used for these assessments. In making the decision regarding the need for a provision, management considers whether the Company has an obligation as a result of a past event, whether it is probable that an outflow or cash or other resources embodying economic benefits will be required to settle the obligation and the ability to make a reliable estimate of the amount of the obligation.

F-113

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) Details of guarantees

Contingent liabilities on outstanding guarantees provided by the Company as of December 31, 2017 are as follows:

			Guarantee limit				Guarantee amount
Guarantors	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	(in millions of Won)
[The Company]
POSCO	POSCO Asia Co., Ltd.	BOC	USD	50,000,000		53,570		50,000,000		53,570
	POSCO ASSAN TST STEEL INDUSTRY	SMBC and others	USD	146,527,500		156,990		131,874,750		141,291
	POSCO COATED STEEL (THAILAND) CO., LTD.	The Great&CO Co.,Ltd (SPC)	THB	5,501,000,000		180,268		5,501,000,000		180,268
	POSCO Maharashtra Steel Private Limited	Export-Import Bank of Korea and others	USD	649,853,000		696,252		323,918,500		347,045
	POSCO MEXICO S.A. DE C.V.	BOA and others	USD	160,000,000		171,424		160,000,000		171,424
	POSCO SS-VINA CO., LTD.	Export-Import Bank of Korea and others	USD	354,351,050		379,652		314,599,225		337,062
	POSCO VST CO., LTD.	ANZ and others	USD	65,000,000		69,641		8,125,000		8,706
	POSCO-VIETNAM Co., Ltd.	Export-Import Bank of Korea	USD	196,000,000		209,994		196,000,000		209,994
	PT. KRAKATAU POSCO	Export-Import Bank of Korea and others	USD	1,350,300,000		1,446,711		1,187,394,785		1,272,174
	Zhangjiagang Pohang Stainless Steel Co., Ltd.	BTMU and others	CNY	760,500,000		124,456		684,450,000		112,011
POSCO DAEWOO Corporation	Daewoo Global Development. Pte., Ltd	Export-Import Bank of Korea	USD	21,633,300		23,178		21,633,300		23,178
		MIRAE ASSET DAEWOO CO.,LTD.	KRW	29,137		29,137		10,703		10,703
	Daewoo Power PNG Ltd.	Export-Import Bank of Korea	USD	54,400,000		58,284		54,400,000		58,284
	Daewoo Textile LLC	Export-Import Bank of Korea	USD	4,000,000		4,286		4,000,000		4,286
	POSCO ASSAN TST STEEL INDUSTRY	ING and others	USD	14,652,750		15,699		14,652,750		15,699
	POSCO DAEWOO INDIA PVT., LTD.	Shinhan Bank and others	USD	162,400,000		173,995		51,237,684		54,896
		SC Bank and others	INR	7,350,000,000		122,892		2,037,278,075		34,063
	PT. Bio Inti Agrindo	Export-Import Bank of Korea and others	USD	120,875,000		129,505		120,875,000		129,505
	Songdo Posco family Housing	SAMSUNG SECURITIES CO.,LTD and others	KRW	70,000		70,000		49,500		49,500

F-114

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

			Guarantee limit				Guarantee amount
Guarantors	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	(in millions of Won)
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	POSCO E&C Vietnam Co., Ltd.	Export-Import Bank of Korea	USD	30,000,000		32,142		30,000,000		32,142
	HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Woori Bank and others	USD	138,000,000		147,853		138,000,000		147,853
	POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	HSBC	USD	100,000,000		107,140		100,000,000		107,140
	POSCO ENGINEERING (THAILAND) CO., LTD.	POSCO Asia Co., Ltd	USD	39,451,000		42,268		39,451,000		42,268
	POSCO Engineering and Construction India Private Limited	Woori Bank	USD	2,100,000		2,250		2,100,000		2,250
	PT PEN INDONESIA	POSCO Asia Co., Ltd.	USD	5,000,000		5,357		5,000,000		5,357
	PT. POSCO E&C INDONESIA	BNP Indonesia	IDR	79,000,000,000		6,241		79,000,000,000		6,241
	Songdo Posco family Housing	SAMSUNG SECURITIES CO.,LTD and others	KRW	70,000		70,000		49,500		49,500
	Daewoo Global Development. Pte., Ltd	POSCO Asia Co., Ltd. and others	USD	68,719,200		73,626		59,088,100		63,307
POSCO ICT	PT.POSCO ICT INDONESIA	POSCO Asia Co., Ltd.	USD	1,500,000		1,607		1,500,000		1,607
POSCO CHEMTECH	PT.Krakatau Posco Chemtech Calcination	Hana Bank	USD	33,600,000		35,999		20,705,882		22,184
POSCO COATED & COLOR STEEL Co., Ltd.	Myanmar POSCO C&C Company, Limited.	POSCO Asia Co., Ltd. and others	USD	13,986,947		14,985		13,986,947		14,985
POSCO ENERGY CO., LTD.	PT. KRAKATAU POSCO ENERGY	Export-Import Bank of Korea and others	USD	193,900,000		207,744		137,396,174		147,206
POSCO Asia Co., Ltd.	POSCO ASSAN TST STEEL INDUSTRY	SMBC	USD	25,000,000		26,785		25,000,000		26,785

F-115

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

			Guarantee limit				Guarantee amount
Guarantors	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	(in millions of Won)
[Associates and joint ventures]
POSCO	CSP — Compania Siderurgica do Pecem	Export-Import Bank of Korea and others	USD	420,000,000		449,990		420,000,000		449,990
		BNDES	BRL	464,060,000		150,100		464,060,000		150,100
	LLP POSUK Titanium	SMBC	USD	15,000,000		16,071		15,000,000		16,071
	Nickel Mining Company SAS	SMBC	EUR	46,000,000		58,846		37,000,000		47,332
POSCO DAEWOO Corporation	GLOBAL KOMSCO Daewoo LLC	Industrial & Commercial Bank of China	USD	8,225,000		8,812		8,225,000		8,812
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	New Songdo International City Development, LLC	Others	KRW	340,000		340,000		317,900		317,900
	UITrans LRT Co., Ltd.	Kookmin Bank and others	KRW	20,740		20,740		20,740		20,740
	Chun-cheon Energy Co., Ltd	Kookmin Bank and others	KRW	11,600		11,600		10,993		10,993
POSCO ICT	Incheon-Gimpo Expressway co., Ltd.	Korea Development Bank	KRW	100,000		100,000		100,000		100,000
	UITrans LRT Co., Ltd.	Kookmin Bank	KRW	76,000		76,000		76,000		76,000
POSCO CHEMTECH	KRAKATAU POS-CHEM DONG-SUH CHEMICAL	Hana Bank	USD	1,140,000		1,221		1,140,000		1,221
POSCO(Suzhou) Automotive Processing Center Co.,Ltd.	POS-InfraAuto (Suzhou) Co., Ltd	Korea Development Bank	USD	780,000		836		780,000		836
[Others]
POSCO DAEWOO Corporation	Ambatovy Project Investments Limited and others	Export-Import Bank of Korea	USD	87,272,727		93,504		28,325,258		30,348
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	Ecocity CO.,LTD and others	Others	KRW	960,011		960,011		446,098		446,098
	AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.	POSCO Asia Co., Ltd. and others	USD	150,000,000		160,710		150,000,000		160,710

F-116

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

			Guarantee limit				Guarantee amount
Guarantors	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	(in millions of Won)
POSCO ICT	SMS Energy and others	Hana Bank and others	KRW	104,880		104,880		73,676		73,676
	Hyochun CO., LTD	Daegu Bank and others	KRW	39,575		39,575		39,575		39,575
	BLT Enterprise and others	Kyobo Life Insurance Co.,Ltd and others	KRW	1,163,585		1,163,585		1,163,585		1,163,585
POSCO AUSTRALIA PTY LTD	Department of Trade and Investment(NSW Government)	Woori Bank and others	AUD	25,260,721		21,097		25,260,721		21,097
			USD	4,683,667,474		5,018,081		3,834,409,355		4,108,186
			KRW	2,985,528		2,985,528		2,358,270		2,358,270
			CNY	760,500,000		124,456		684,450,000		112,011
			INR	7,350,000,000		122,892		2,037,278,075		34,063
			IDR	79,000,000,000		6,241		79,000,000,000		6,241
			THB	5,501,000,000		180,268		5,501,000,000		180,268
			EUR	46,000,000		58,846		37,000,000		47,332
			AUD	25,260,721		21,097		25,260,721		21,097
			BRL	464,060,000		150,100		464,060,000		150,100

(c) POSCO ENGINEERING & CONSTRUCTION CO., LTD. has provided the completion guarantees for Samsung C&T Corporation amounting to ￦395,792 million while Samsung C&T Corporation has provided the construction guarantees or payment guarantees on customers’ borrowings on behalf of POSCO ENGINEERING & CONSTRUCTION CO., LTD. amounting to ￦269,455 million as of December 31, 2017.

F-117

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(d) Other commitments

Details of other commitments of the Company as of December 31, 2017 are as follows:

POSCO	POSCO entered into long-term contracts to purchase iron ore, coal, nickel and others. The contracts of iron ore and coal generally have terms of more than three years and the contracts of nickel have terms of more than one year. These contracts provide for periodic price adjustments based on the market price. As of December 31, 2017, 116 million tons of iron ore and 18 million tons of coal remained to be purchased under such long-term contracts.
	POSCO entered into an agreement with Tangguh Liquefied Natural Gas (LNG) Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. The purchase price is subject to change, based on changes of the monthly standard oil price (JCC) and with a price ceiling.
	As of December 31, 2017, the Company entered into commitments with KOREA ENERGY AGENCY for long-term foreign currency borrowings, which enables the Company to borrow up to the amount of USD 6.49 million. The borrowings are related to the Company’s the exploration of gas hydrates in Western Fergana-Chinabad. The repayment of the borrowings depends on the success of the projects. The Company is not liable for the repayment of full or part of the amount borrowed if the respective projects fail. The Company has agreed to pay a certain portion of its profits under certain conditions, as defined by the borrowing agreements. As of December 31, 2017, the ending balance of the borrowing amounts to USD 1.02 million.
	POSCO has provided a supplemental funding agreement, as the largest shareholder, as requested from the creditors, including Norddeutsche Landesbank, for seamless funding to POSCO ENERGY Co., Ltd. under construction of new power plant.
	The Company provides a supplementary fund of up to ￦9.8 billion to the Company’s subsidiary, Busan E&E Co., Ltd., at the request of creditors such as the Korea Development Bank.
	The Company provides supplementary funding for the purpose of promoting the Suncheon Bay PRT business of Suncheon Eco Trans Co., Ltd, a subsidiary of the Company, at the request of creditors.
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	As of December 31, 2017, POSCO ENGINEERING & CONSTRUCTION CO., LTD. has foreign currency guarantee of up to USD 2,311 million and uses USD 1,306 million with Woori Bank and others.
POSCO ICT	As of December 31, 2017, in relation to contract enforcement, POSCO ICT was provided with ￦143,582 million and ￦22,432 million guaranties from Korea Software Financial Cooperative and Seoul Guarantee Insurance, respectively.

F-118

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(e) Litigation in progress

As of December 31, 2017, litigations in progress that POSCO and certain subsidiaries are defendants in legal actions arising from the normal course of business are as follows:

Company	Legal actions		Claim amount		Korean Won equivalent		Description
	(In millions of Won, in thousands of foreign currencies)
POSCO		15	KRW	23,037		23,037	Lawsuit on claim for employee right and others(*1)
		1	USD	1,583		1,696	Arbitration on trading and others
POSCO DAEWOO Corporation		2	EUR	2,747		3,514	Lawsuit on claim for damages and others
		3	INR	4,518,694		75,553	Lawsuit on claim for payment on guarantees and others(*1)
		10	KRW	9,903		9,903	Lawsuit on claim for payment and others
		3	USD	22,228		23,815	Lawsuit on claim for damages and others(*1)
		1	PKR	124,775		1,208	Lawsuit on claim for damages
		1	CAD	79,000		67,363	Lawsuit on claim for damages
POSCO ENGINEERING & CONSTRUCTION CO., LTD.		104	KRW	461,134		461,134	Arbitration on construction costs allocation and others
POSCO ICT		13	KRW	9,894		9,894	Lawsuit on claim for payment and others
POSCO A&C		3	KRW	3,985		3,985	Lawsuit on claim for payment on construction
POSCO ENERGY CO., LTD.		4	KRW	7,017		7,017	Lawsuit on claim for damages and revocation of electricity supply contract and others
POSCO E&C CHINA CO., LTD.		11	CNY	13,679		2,239	Lawsuit on claim for payment of reserve for construction warranty and others
		1	KRW	3,305		3,305	Lawsuit on claim for payment on construction
Posco e&c Songdo International Building		3	KRW	892		892	Lawsuit on affirmation of the non-existence of general meeting of stockholders and others
POSPOWER CO., Ltd.		1	KRW	1,000		1,000	Lawsuit on claim for damages
POSCO ENGINEERING(THAILAND) CO., LTD.		7	THB	724,400		23,739	Lawsuit on claim for payment on construction
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S		6	TRY	31		9	Lawsuit on claim for unfair dismissal and others
PT. KRAKATAU POSCO		1	IDR	324,858,033		25,664	Lawsuit on claim for payment on construction
POSCO(Dalian)IT Center Development Co., Ltd.		2	CNY	423		69	Lawsuit over contract dispute dealing apartment
Brazil Sao Paulo Steel Processing Center		3	BRL	12,167		3,935	Lawsuit on claim for payment on construction and others
POSCO ENGINEERING &CONSTRUCTION DO BRAZIL LTDA.		184	BRL	121,058		39,156	Lawsuit on claim for damages and others(*1)
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.		1	KRW	3,305		3,305	Lawsuit on claim for payment on construction
POSCO India Chennai Steel Processing Center Pvt.Ltd.		6	USD	8,409		9,009	Lawsuit on custom duty and others

(*1) The Company made a reliable estimate in 163 lawsuits by considering the possibility and amount of outflow of resources and recognized ￦27,963 million as provision for legal contingencies and claims.

For all the other lawsuits and claims, management does not believe the Company has any present obligations and therefore, the Company has not recognized any provisions as of December 31, 2017 for the matters.

F-119

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

39. Additional Information of Cash Flow Statements

(a) Changes in operating assets and liabilities for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Trade accounts and notes receivable	￦	1,586,113			273,419			63,075
Other receivables		259,741			191,591			113,740
Inventories		2,456,068			(889,998	)		(1,435,170	)
Other current assets		42,131			(287,377	)		110,688
Other non-current assets		72,826			33,584			12,455
Trade accounts and notes payable		(894,129	)		769,337			(607,999	)
Other payables		39,811			(179,174	)		(26,922	)
Other current liabilities		(457,947	)		2,490			338,273
Provisions		(119,172	)		(124,884	)		(145,763	)
Payments of severance benefits		(157,983	)		(278,278	)		(185,220	)
Plan assets		(115,274	)		(138,854	)		3,815
Other non-current liabilities		72,267			223,574			(82,605	)
	￦	2,784,452			(404,570	)		(1,841,633	)

(b) Changes in liabilities arising from financial activities for the year ended December 31, 2017 were as follows:

	Liabilities												Derivatives held to hedge borrowings
	Short-term borrowings			long-term borrowings			Dividend payable			Finance lease liabilities
	(in millions of Won)
Beginning	￦	7,979,727			14,725,271			7,770			114,409			(52,373	)
Changes from financing cash flows		558,083			(1,410,033	)		(931,232	)		(10,536	)		—
Changes arising from obtaining or losing control of subsidiaries or other business		(12,469	)		3,299			—			—			—
The effect of changes in foreign exchange rates		(350,523	)		(435,170	)		—			(10,855	)		—
Changes in fair values		—			—			—			—			171,693
Other changes:
Decrease in retained earnings		—			—			863,579			—			—
Decrease in non-controlling interests		—			—			67,096			—			—
Amortization of discount on debentures issued		—			5,472			—			—			—
Ending	￦	8,174,818			12,888,839			7,213			93,018			119,320

40. Operating Segments and Geographic Information

(a) The Company’s operating businesses are organized based on the nature of markets and customers. The Company has four reportable operating segments—steel, construction, trading and others. The steel segment includes production of steel products and revenue of such products. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas. The trading segment consists of exporting and importing a wide range of steel products and raw materials that are both obtained from and supplied to POSCO, as well as between other suppliers and purchasers in Korea and overseas. Other segments include power generation, liquefied natural gas production, network and system integration and logistics. The policies of classification and measurement on operating segments were the same for all periods presented.

F-120

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

(b) Information about reportable segments as of and for the years ended December 31, 2015, 2016 and 2017 was as follows:

1) As of and for the year ended December 31, 2015

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	28,292,824			18,315,487			8,515,780			3,068,254			58,192,345
Internal revenues		16,543,951			8,692,020			1,352,067			2,691,361			29,279,399
Including inter segment revenue		9,146,808			4,480,744			1,090,193			2,571,219			17,288,964
Total revenues		44,836,775			27,007,507			9,867,847			5,759,615			87,471,744
Interest income		139,821			55,630			27,134			16,173			238,758
Interest expenses		(560,767	)		(76,672	)		(91,742	)		(141,095	)		(870,276	)
Depreciation and amortization		(2,782,680	)		(166,814	)		(50,605	)		(282,817	)		(3,282,916	)
Impairment loss on property, plant and equipment and others		(243,828	)		(17,281	)		(28,345	)		(22,979	)		(312,433	)
Impairment loss on available-for-sale financial assets		(151,503	)		(1,410	)		(47,616	)		(40,261	)		(240,790	)
Share of profit or loss of investment in associates and JVs		(562,133	)		(212,535	)		(25,223	)		(22,618	)		(822,509	)
Income tax expense		(390,000	)		(4,772	)		(30,615	)		(18,718	)		(444,105	)
Segment profit (loss)		181,495			38,843			(275,651	)		(65,570	)		(120,883	)
Segment assets		70,102,972			12,160,406			9,997,683			10,962,594			103,223,655
Investment in associates		17,457,391			1,097,971			1,076,024			1,186,307			20,817,693
Acquisition of non-current assets		2,102,674			303,753			276,863			345,971			3,029,261
Segment liabilities		21,078,613			8,953,410			5,716,550			6,472,925			42,221,498

2) As of and for the year ended December 31, 2016

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	26,844,154			16,774,078			6,768,348			2,696,933			53,083,513
Internal revenues		16,062,016			9,646,026			713,703			2,379,945			28,801,690
Including inter segment revenue		8,992,783			5,296,847			557,526			2,285,128			17,132,284
Total revenues		42,906,170			26,420,104			7,482,051			5,076,878			81,885,203
Interest income		126,210			40,424			65,256			13,564			245,454
Interest expenses		(459,345	)		(70,841	)		(102,292	)		(126,523	)		(759,001	)
Depreciation and amortization		(2,788,535	)		(165,863	)		(57,719	)		(264,299	)		(3,276,416	)
Impairment loss on property, plant and equipment and others		(99,165	)		(45,995	)		(9,426	)		(88,696	)		(243,282	)
Impairment loss on available-for-sale financial assets		(225,225	)		(28,988	)		(35,331	)		(24,902	)		(314,446	)
Share of profit or loss of investment in associates and JVs		(211,084	)		(53,586	)		(283,833	)		(6,369	)		(554,872	)
Income tax expense		(495,874	)		(18,629	)		107,520			(56,026	)		(463,009	)
Segment profit (loss)		1,511,383			53,244			(1,403,712	)		(25,889	)		135,026
Segment assets		69,914,939			13,580,179			9,501,046			8,529,600			101,525,764
Investment in associates		16,109,360			1,100,973			795,445			1,200,295			19,206,073
Acquisition of non-current assets		2,334,842			249,597			25,533			191,715			2,801,687
Segment liabilities		20,292,764			10,134,170			6,780,380			4,709,689			41,917,003

F-121

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

3) As of and for the year ended December 31, 2017

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	30,230,368			20,802,207			6,886,606			2,735,919			60,655,100
Internal revenues		17,381,010			14,075,996			398,924			2,548,674			34,404,604
Including inter segment revenue		12,004,614			8,043,643			329,215			2,446,029			22,823,501
Total revenues		47,611,378			34,878,203			7,285,530			5,284,593			95,059,704
Interest income		128,827			32,799			100,922			17,940			280,488
Interest expenses		(422,357	)		(121,967	)		(112,983	)		(100,656	)		(757,963	)
Depreciation and amortization		(2,856,133	)		(206,490	)		(42,123	)		(255,620	)		(3,360,366	)
Impairment loss on property, plant and equipment and others		(149,840	)		(140,839	)		(37,476	)		(8,564	)		(336,719	)
Impairment loss on available-for-sale financial assets		(95,261	)		—			(18,637	)		(13,421	)		(127,319	)
Share of profit or loss of investment in associates and JVs		8,352			—			(8,555	)		(1,518	)		(1,721	)
Income tax expense		(977,853	)		(109,710	)		(109,961	)		(77,172	)		(1,274,696	)
Segment profit (loss)		2,790,855			112,661			24,545			232,700			3,160,761
Segment assets		70,017,816			14,139,098			8,609,753			8,776,090			101,542,757
Investment in associates		16,116,654			1,134,798			668,392			1,193,895			19,113,739
Acquisition of non-current assets		2,033,184			286,185			99,190			251,665			2,670,224
Segment liabilities		19,057,249			10,386,294			5,744,693			4,620,902			39,809,138

(c) Reconciliations of total segment revenues, profit or loss, assets and liabilities, and other significant items to their respective consolidated financial statement line items are as follows:

1) Revenues

	2015			2016			2017
	(in millions of Won)
Total revenue for reportable segments	￦	87,471,744			81,885,203			95,059,704
Elimination of inter-segment revenue		(29,279,399	)		(28,801,690	)		(34,404,604	)
Basis difference (*2)		329,923			(143,742	)		(468,233	)
	￦	58,522,268			52,939,771			60,186,867

2) Profit

	2015			2016			2017
	(in millions of Won)
Total profit (loss) for reportable segments	￦	(120,883	)		135,026			3,160,761
Goodwill and corporate FV adjustments		(95,150	)		(123,110	)		(84,370	)
Elimination of inter-segment profits		119,852			1,036,253			(102,922	)
Income tax expense		276,939			384,685			1,206,223
Basis difference (*2)		(30,413	)		(21,245	)		(84,641	)
Profit before income tax expense	￦	150,345			1,411,609			4,095,051

F-122

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

3) Assets

	2016			2017
	(in millions of Won)
Total assets for reportable segments (*1)	￦	101,525,764			101,542,757
Equity-accounted investees		(15,322,271	)		(15,555,972	)
Goodwill and corporate FV adjustments		3,750,915			3,368,333
Elimination of inter-segment assets		(10,191,413	)		(10,330,159	)
Basis difference (*2)		374,619			760,670
	￦	80,137,614			79,785,629

(*1) As segment assets and liabilities are determined based on separate financial statements, for subsidiaries which are in a different segment from that of its immediate parent company, their carrying amount in separate financial statements is eliminated upon consolidation. In addition, adjustments are made to adjust the amount of investment in associates and joint ventures from the amount reflected in segment assets to that determined using equity method in consolidated financial statements.

4) Liabilities

	2016			2017
	(in millions of Won)
Total liabilities for reportable segments	￦	41,917,003			39,809,138
Corporate FV adjustments		442,178			483,693
Elimination of inter-segment liabilities		(8,434,580	)		(8,731,880	)
Basis difference (*2)		447,744			897,953
	￦	34,372,345			32,458,904

5) Other significant items

a) December 31, 2015

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	238,758			—			(28,565	)		—		210,193
Interest expenses		(870,276	)		1,282			80,222			—		(788,772	)
Depreciation and amortization		(3,282,916	)		(117,595	)		182,265			—		(3,218,246	)
Share of profit or loss of investment in associates		(822,509	)		—			316,455			—		(506,054	)
Income tax expense		(444,105	)		24,294			142,872			10,379		(266,560	)
Impairment loss on property, plant and equipment and others		(312,433	)		—			(142,234	)		—		(454,667	)
Impairment loss on available-for-sale financial assets		(240,790	)		—			98,009			—		(142,781	)
	￦	(5,734,271	)		(92,019	)		649,024			10,379		(5,166,887	)

F-123

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

b) December 31, 2016

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	245,454			—			(62,979	)		—		182,475
Interest expenses		(759,001	)		(807	)		101,082			—		(658,726	)
Depreciation and amortization		(3,276,416	)		(104,949	)		167,518			—		(3,213,847	)
Share of profit or loss of investment in associates		(554,872	)		(38,732	)		504,927			—		(88,677	)
Income tax expense		(463,009	)		21,945			56,379			5,141		(379,544	)
Impairment loss on property, plant and equipment and others		(243,282	)		—			(125,657	)		—		(368,939	)
Impairment loss on available-for-sale financial assets		(314,446	)		—			66,042			—		(248,404	)
	￦	(5,365,572	)		(122,543	)		707,312			5,141		(4,775,662	)

c) December 31, 2017

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	280,488			—			(68,037	)		—		212,451
Interest expenses		(757,963	)		1,304			103,544			—		(653,115	)
Depreciation and amortization		(3,360,366	)		(106,195	)		169,141			—		(3,297,420	)
Share of profit or loss of investment in associates		(1,721	)		—			12,261			—		10,540
Income tax expense		(1,274,696	)		21,270			47,203			20,483		(1,185,740	)
Impairment loss on property, plant and equipment and others		(336,719	)		(867	)		34,619			—		(302,967	)
Impairment loss on available-for-sale financial assets		(127,319	)		—			4,105			—		(123,214	)
	￦	(5,578,296	)		(84,488	)		302,836			20,483		(5,339,465	)

(*2) Basis difference is related to the difference in recognizing revenue and expenses in connection with development and sale of certain residential real estate between the report reviewed by the CEO and the consolidated financial statements.

(d) Revenue by geographic area for years ended December 31, 2015, 2016 and 2017 was as follows:

	2015		2016			2017
	(in millions of Won)
Domestic	￦	39,268,907		34,883,941			38,882,220
Japan		1,934,808		1,892,022			2,200,405
China		5,756,867		5,908,046			6,731,214
Asia-other		5,888,045		5,649,843			7,750,553
North America		1,921,039		1,899,291			1,725,120
Others		3,422,679		2,850,370			3,365,588
		58,192,345		53,083,513			60,655,100
Basis difference		329,923		(143,742	)		(468,233	)
	￦	58,522,268		52,939,771			60,186,867

F-124

POSCO and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2015, 2016 and 2017

In presenting geographic information revenue is based on the geographical location of customers.

(e) Non-current assets by geographic area as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Domestic	￦	31,772,641		30,790,462
Japan		187,266		162,328
China		1,451,405		1,284,561
Asia-other		6,163,388		5,266,799
North America		168,800		277,249
Others		1,233,288		1,119,319
	￦	40,976,788		38,900,718

Non-current assets by geographic area include investment property, property, plant and equipment, goodwill and other intangible assets.

(f) There are no customers whose revenue is 10% or more of consolidated revenue.

F-125

Exhibit Index

1.1	—	Articles of incorporation of POSCO (English translation)
2.1	—	Form of Common Stock Certificate (including English translation) (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement No. 33-81554)* (P)
2.2	—	Form of Deposit Agreement (including Form of American Depositary Receipts) (incorporated by reference to the Registrant’s Registration Statement (File No. 333-189473) on Form F-6)*
8.1	—	List of consolidated subsidiaries
12.1	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed previously

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

POSCO
(Registrant)
/s/ Kwon, Oh-Joon
Name:	Kwon, Oh-Joon
Title:	Chief Executive Officer and Representative Director
Date:	April 27, 2018

EX-1.1

Exhibit 1.1

This English language translation of the Articles of Incorporation has been prepared solely for reference purposes. In the event of any conflict between the Korean language version and this English language version, the Korean language version shall prevail.

ARTICLES OF INCORPORATION

Adopted on	March 6, 1968
Amended on	July 10, 1968	February 20, 1969	March 20, 1969
	June 16, 1969	February 7, 1970	February 6, 1971
	November 23, 1971	February 4, 1972	November 29, 1972
	February 12, 1973	February 5, 1974	February 8, 1975
	February 6, 1976	February 8, 1977	February 25, 1978
	February 24, 1979	February 28, 1981	February 23, 1982
	February 18, 1984	February 5, 1985	February 26, 1986
	March 7, 1987	February 27, 1988	March 15, 1989
	March 6, 1990	March 14, 1991	March 7, 1992
	October 13, 1992	March 8, 1993	April 15, 1994
	March 15, 1995	March 15, 1996	March 14, 1997
	March 17, 1998	August 20, 1998	March 16, 1999
	March 17, 2000	March 16, 2001	March 15, 2002
	March 14, 2003	March 12, 2004	February 24, 2006
	February 23, 2007	February 27, 2009	February 26, 2010
	February 25, 2011	March 16, 2012	March 11, 2016
	March 9, 2018

CHAPTER I. GENERAL PROVISIONS

Article 1. Company Name

The name of the Company in Korean shall be “Chusik Hoesa POSCO” and in English, “POSCO”

Article 2. Purpose

The purpose of the Company is to engage in the following business activities:

1. To manufacture, market, promote, sell and distribute iron, steel and rolled products;

2. To engage in harbor loading and unloading, transportation and warehousing businesses;

3. To engage in the management of professional athletic organizations;

4. To engage in the supply of gas and power generation as well as in the distribution business thereof and in the resources development business;

5. To engage in leasing of real estate and distribution businesses;

6. To engage in the supply of district heating business;

7. To engage in marine transportation, processing and sales of minerals within or outside of Korea;

8. To engage in educational service and other services related to business;

1

9. To engage in manufacture, process and sale of non-ferrous metal;

10. To engage in technology license sales and engineering business; and

11. To engage in all other conducts, activities or businesses which are related, directly or indirectly, to the attainment and continuation of the foregoing purposes.

Article 3. Location of the Head Office and Branch Offices

The head office of the Company shall be located at Pohang-si, Kyungsangbuk-do, the Republic of Korea (“Korea”). Branch offices may be established elsewhere by resolution of the Board of Directors of the Company.

Article 4. Notices

Public notices by the Company shall be disclosed on the website of the Company(http://www.posco.com). When such online disclosure is made impracticable due to online system error or any other electronic technical failure, public notices by the Company shall be disclosed in the Seoul Shinmun, the Maeil Shinmun and the Kwangju Ilbo, daily newspapers published in Seoul, Daegu Metropolitan City and Kwangju Metropolitan City, respectively.

CHAPTER II. SHARES

Article 5. Total Number of Authorized Shares

The total number of shares which the Company is authorized to issue (“Authorized Shares”) is two hundred million (200,000,000) shares.

Article 6. Face Value, Types of Shares and Share Certificates

The types of shares to be issued by the Company shall be registered common shares and registered preferred shares, having a face value of 5,000 Won per share.

Share certificates shall be issued by the Company in denominations of one (1), five (5), ten (10), fifty (50), one hundred (100), five hundred (500), one thousand (1,000) and ten thousand (10,000) shares as the shareholders may request.

Article 7. Number and Contents of Preferred Shares

(1) Preferred shares to be issued by the Company shall be non-voting, and the number thereof shall not exceed the limit prescribed in the mandatory provisions of the applicable laws or regulations.

(2) The dividends on non-voting preferred shares shall be no less than nine percent (9%) per annum of the par value and the rate thereof shall be determined by the Board of Directors at the time of issuance.

(3) Notwithstanding Paragraph (2), a dividend on preferred shares shall not be required to be declared in case the amount available for dividend is less than the aggregate amount of the minimum dividend.

Article 8. Shares to be Issued at the Time of Incorporation

The Company shall issue forty thousand (40,000) shares at the time of incorporation.

2

Article 9. No Issuance of Share Certificates

If a shareholder does not desire to receive share certificates representing the whole or part of the shares owned by him, no share certificates representing such shares shall be issued by the Company.

Article 9-2. Electronic Registration of Shares

(1) The Company, by the resolutions of the Board of Directors, may elect to adopt the system that allows shareholders electronically register its shares on the electronic registrar on the designated electronic registration system instead of issuing certificates representing its shares.

(2) The Board of Directors shall determine the standard operation policy necessary for the Company’s adoption of the electronic securities system.

Article 10. Pre-emptive Rights

(1) Except as otherwise provided by Paragraphs (2) through (4) of this Article 10 and the mandatory provisions of the applicable laws or regulations, in case of the issuance of new shares, the shareholders of the Company shall have the right to subscribe for such newly issued shares in proportion to the number of shares held by each of them; provided, however, that the Company may, by resolution of the Board of Directors, allocate preferred shares to holders of preferred shares in proportion to the number of shares held by each of them.

(2) The Board of Directors may allocate new shares to persons other than the shareholders by a resolution of the Board of Directors in the following cases. If the Company issues new shares to persons other than the shareholders of the Company pursuant to this Article 10, the Company shall notify the shareholders or make public two (2) weeks in advance of the date of subscription of the new shares detailing the type, number, issue price, date of subscription and the manner of subscription of the newly issued shares in accordance with the Korean Commercial Code.

1. If the Company issues new shares by a public offering or has underwriters underwrite new shares by a public offering in accordance with the applicable legislation;

2. If the Company allocates new shares to the members of the Company’s Employee Stock Ownership Association in accordance with the applicable legislation;

3. If the Company issues new shares for the issuance of depositary receipts in accordance with the applicable legislation;

4. If the Company issues new shares through offering to the public investors by the resolutions of the Board of Directors in accordance with the applicable legislation;

5. If the Company issues new shares to the existing creditors in order to convert the debt into capital;

6. If the Company issues new shares to the domestic and/or foreign entities in accordance with a joint venture agreement, strategic affiliation or technology license and transfer agreement executed by and between the Company and such entities for the management purposes; and

7. If the Company issues new shares to the domestic and/or foreign financial institutions in order to finance the Company in the emergent cases.

(3) Any shares unsubscribed after the exercise of pre-emptive rights by shareholders who are entitled to them or any fractional shares remaining after the allocation of new shares may be disposed of by a resolution of the Board of Directors according to the applicable laws or regulations.

3

(4) Notwithstanding the provisions of Paragraphs (2) through (3) of this Article 10, new shares may be allocated to persons other than the existing shareholders by a special resolution passed at a General Meeting of Shareholders when it is deemed necessary for attaining the purposes of the Company such as introduction of new technology and financial restructuring.

(5) In case the Company issues new shares by a rights offering, bonus issue or stock dividend, such shares will be deemed to have been issued at the end of the fiscal year immediately preceding the fiscal year during which the shares are issued.

Article 11. Offering to Public Investors, etc.

(1) The Company may issue new shares constituting not more than ten-hundredths (10/100) of the total issued shares of the Company through offering to public investors by the resolution of the Board of Directors in accordance with applicable legislations.

(2) In event that the Company issues new shares in accordance with the resolution of the Board of Directors due to the reasons set forth in Items 5 through 7 of Paragraph (2) of Article 10, the total face amount of new shares shall not exceed one hundred billion (100,000,000,000) Won.

(3) The type, number and the issue price of the shares to be issued by the manner as set forth in Paragraphs (1) and (2) shall be determined by the resolution of the Board of Directors; provided that the issue price of the new shares must be no less than the price as set forth in applicable legislations.

Article 12. (Deleted)

Article 13. Registration and Alteration of an Entry in the Register of Shareholders

(1) The Company shall, by resolution of the Board of Directors, appoint an agent to attend to the registration of transfer of shares and bonds and creation of pledges thereon, the indication of trust assets, the re-issuance of share certificates and any other matters relating thereto. Specific procedures therefor shall be in accordance with applicable laws and regulations relating to such matters and the rules the agent may set forth.

(2) Shareholders and registered pledgees who reside in foreign countries shall appoint and report the place where, and an agent to whom, notices will be given in Korea.

Article 13-2. Register of Shareholders by Electronic Means

In accordance with the Korean Commercial Code, the Company may make entries in the Register of Shareholders by electronic means.

Article 14. Fees

The Company may, by resolution of the Board of Directors, charge, or have the register agent charge, a fee for services it renders in connection with any of the matters set forth in Article 13 above, or for any services related to shareholder inspection of the Company’s financial statements or other documents, and for providing any copies thereof.

Article 15. Record Date and Suspension of Alterations of Entries in the Register of Shareholders

(1) The Company shall suspend entries of alterations, registration or cancellation of pledges over shares and indication of trust assets and cancellation thereof in the Register of Shareholders of a period commencing on January 1 and ending on January 15 of each year.

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(2) The record date of the Register of Shareholders shall be December 31 of each year, and such shareholders listed on the Register of Shareholders as of the record date shall be entitled to exercise their rights thereof at the General Meetings of Shareholders.

(3) The Company may, by resolution of the Board of Directors or by resolution of a committee as authorized by the Board of Directors, suspend the entry of a change as to the matters contained in the Register of Shareholders for a specified period of time or set a record date when deemed necessary and for the purpose of convening an Extraordinary General Meeting of Shareholders; provided, however, that the period of suspension shall not exceed three (3) months and two (2) weeks prior notice of suspension or fixing of a record date has been given to the shareholders. The Board of Directors or such authorized committee may, when deemed necessary, both suspend the entry of a change in the Register of Shareholders and set a record date.

CHAPTER III. BONDS

Article 16. Issuance of Bonds

The Company may issue bonds by a resolution of the Board of Directors

Article 17. Issuance of Convertible Bonds

(1) The Company may issue convertible bonds in the aggregate fact amount not exceeding two trillion (2,000,000,000,000) Won to persons other than the shareholders in the following cases:

1. If the Company issues convertible bonds by public offering.

2. If the Company enters into a joint venture agreement, strategic alliance or technical license and transfer agreement, when it is deemed necessary, and issues convertible bonds to any domestic or international corporation accordingly.

3. If the Company issues convertible bonds to a domestic or international financial institution to provide urgently needed funds.

(2) Convertible bonds mentioned in Paragraph (1) may, by resolution of the Board of Directors, be issued with their conversion rights limited to a certain portion of their face amount.

(3) Upon conversion from the aggregate face amount of convertible bonds, common shares may be issued up to one trillion three hundred billion (1,300,000,000,000) Won and preferred shares may be issued up to seven hundred billion (700,000,000,000) Won, and the conversion price, which shall not be less than the par value of the shares, shall be determined by resolution of the Board of Directors at the time of issuance of the convertible bonds.

(4) The conversion period shall be the period commencing from the date of issuance of the convertible bonds and ending on the date immediately preceding the date of redemption of the convertible bonds. The conversion period may be adjusted by a resolution of the Board of Directors; provided, that the conversion period shall in any event fall within the period mentioned above.

(5) The provisions of Article 10, Paragraph (5) shall apply mutatis mutandis to the payment of dividends on the shares issued upon conversion and the payment of interest on the convertible bonds.

Article 17-2. Issuance of Bonds with Warrants

(1) The Company may issue bonds with warrants to persons other than its shareholders to the extent that the aggregate par value of the bonds with warrants do not exceed two trillion (2,000,000,000,000) Won, in case of the events prescribed in Paragraph (1) of Article 17 above.

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(2) The amount with respect to which the pre-emptive rights may be exercised shall be determined by resolution of the Board of Directors; provided, that such amount shall not in any event exceed the aggregate face amount of bonds with warrants.

(3) Upon exercise of the warrants, from the aggregate face amount of bonds with warrants, common shares may be issued up to one trillion three hundred billion (1,300,000,000,000) Won and preferred shares may be issued up to seven hundred billion (700,000,000,000) Won, and the issue price, which shall not be less than the face value of the shares, shall be determined by resolution of the Board of Directors at the time of issuance of bonds with warrants.

(4) The period during which the pre-emptive rights may be exercised shall be the period commencing from the date of issuance of bonds with warrants and ending on the date immediately preceding the date of redemption of bonds with warrants. The period during which the pre-emptive rights may be exercised may be adjusted by resolution of the Board of Directors; provided, that such period shall in any event fall within the period mentioned above.

(5) The provisions of Article 10, Paragraph (5) shall apply, mutatis mutandis, to the payment of dividends on the new shares issued upon exercise of the pre-emptive rights.

Article 18. Electronic Registration of Bonds

When the Company issues the bonds, instead of issuing certificates representing the bonds, the Company may electronically register its bonds on the electronic registrar of a designated electronic registration system by a resolution of the Board of Directors or by the decision of the Representative Director of the Company (in case the Board of Directors delegates an authority to issue the bonds to the Representative Director).

Article 18-2. Provisions Applicable mutatis mutandis to the Issuance of Bonds

Articles 13 and 14 of these Articles of Incorporation shall apply mutatis mutandis to the issuance of bonds.

CHAPTER IV. GENERAL MEETING OF SHAREHOLDERS

Article 19. Convening of General Meeting of Shareholders

(1) An Ordinary General Meeting of Shareholders shall be held within three (3) months after the end of each fiscal year, and an Extraordinary General Meetings of Shareholders may be convened at any time in compliance with a resolution of the Board of Directors and applicable laws or regulations.

(2) Shareholders may act only with respect to matters set forth in a written notice at a General Meeting of Shareholders.

(3) General Meeting of Shareholders shall be held in Seoul, Korea or at location of the Company’s head office.

(4) A General Meeting of Shareholders shall be convened by the Chairman of the Company or by the President or Vice President of the Company acting under the Chairman’s authorization.

Article 20. Notices

(1) Written notice of each General Meeting of Shareholders of the Company shall state the date, time, venue and the agenda for which the meeting has been called. The written notice shall be delivered to all shareholders by postal mail or by e-mail transmission at least two weeks prior to the date set for such General Meeting of Shareholders.

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(2) Written notice of a General Meeting of Shareholders to be given to shareholders holding one-hundredth (1/100) or less of the total number of issued shares entitled to vote may be substituted by notices made at least twice in each of the Seoul Shinmun published in Seoul, the Maeil Shinmun published in Daegu Metropolitan City and the Kwangju Ilbo published in Kwangju Metropolitan City two weeks prior to the date set for such Meeting, or by notices to be posted on an electronic disclosure database system maintained by the Financial Supervisory Service or the Korea Exchange two weeks prior to the date set for such General Meeting of Shareholders.

Article 21. Presiding Officer

The Chairman and the Representative Director shall preside at the General Meetings of Shareholders. In the absence of the Chairman, the President and the Vice President among Inside Directors shall act as chairman in accordance with their order of authority.

Article 22. Authority of the Presiding Officer

The presiding officer at a General Meeting of Shareholders may order any person to cease making any statements or to leave the meeting or that statements made by such person be stricken from the record if the presiding officer determines that such person is deliberately preventing deliberations or is disturbing the order of the proceedings at the meeting. A person so ordered shall comply with the presiding officer’s instructions.

Article 23. Vote by Proxy

(1) Any shareholder entitled to vote at a General Meeting of Shareholders shall have the right to vote by proxy.

(2) A proxy can be only given to a shareholder of the company, and the proxy shall submit a document evidencing the power of representation to the company before the opening of the General Meeting of Shareholders. In case of a corporate entity shareholder, any of its officers or employees

may act as a proxy.

Article 24. Quorum and Requisite for Resolutions

(1) Except as otherwise provided in these Articles of Incorporation or by applicable laws or regulations, all resolutions passed at a General Meeting of Shareholders shall be adopted by the affirmative vote of a majority of the voting shares of the shareholders present, which shall represent at least one-fourth (1/4) of the voting shares of the Company then issued and outstanding.

(2) In the following cases, the resolutions of a General Meeting of Shareholders shall be adopted by the affirmative vote of at least two-thirds (2/3) of the voting shares of the shareholders present and by the affirmative vote of at least one-third (1/3) of the voting shares of the total issued and outstanding shares:

1. Amendment of the Articles of Incorporation;

2. Transfer of all or any important part of the business;

3. Execution, amendment or rescission of a contract for leasing the whole of the business, for entrustment of management, or for sharing with another person all profits and losses in relation to the business or of a similar contract;

4. Acquisition of all or part of business of any other company, which may have a great influence upon the business of the Company;

5. Merger or consolidation of the Company (excluding a small scale merger or consolidation);

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6. Matters required to be approved by the General Meeting of Shareholders, which have material effects on the company’s assets, as determined by the Board of Directors; and

7. Any other matter for which such vote is required by Korean laws and regulations.

Article 25. Exercise of Voting Right in Writing

(1) Any shareholder is entitled to exercise its voting rights at a General Meeting of Shareholders in writing without being present at such General Meeting of Shareholders.

(2) In connection with Paragraph (1) above, the Company shall attach the document necessary for the shareholder’s exercise of its voting rights in writing and any reference documents to the written notice for convening a General Meeting of Shareholders.

(3) A shareholder, who intends to exercise its voting rights in writing, shall fill in the document referred to in Paragraph (2) above and submit such document to the Company one (1) day prior to the date of the relevant General Meeting of Shareholders.

Article 26. Minutes of General Meeting of Shareholders

The substance of the course of the proceedings of a General Meeting of Shareholders and the results thereof shall be recorded in the minutes which shall bear the names and seals or signatures thereon of the presiding officer and of the Directors present at the meeting, and shall be preserved in the archives of the Company.

CHAPTER V. BOARD OF DIRECTORS

Article 27. Number of the Directors

The total number of Directors of the Company shall be at least three (3) but no more than thirteen (13) Directors, among which the Outside Directors shall be eight (8) persons or less and Inside Directors shall be five (5) persons or less. The Outside Directors shall constitute the majority of the total number of the Directors.

Article 28. Election of the Directors and Representative Directors

(1) The Directors shall be elected at the General Meeting of Shareholders.

(2) By resolution of the Board of Directors, a number of Representative Directors may be appointed from among Inside Directors. On recommendation of the Chairman, the Board of Directors may grant an Inside Director the position of President, Executive Vice President, Senior Managing Director and Managing Director.

(3) If Directors are appointed by a cumulative voting, the Inside Directors and the Independent Outside Directors are separately considered, and then, the cumulative voting shall apply to each group.

Article 29. Appointment of the Chairman and the Representative Director

(1) By resolution of the Board of Directors, the Chairman and the Representative Director shall be elected from among the Inside Directors after his qualification is approved by the CEO Candidate Recommendation Committee.

(2) In the event a candidate for the position of Inside Director is nominated as the Chairman and the Representative Director candidate and approved by the CEO Candidate Recommendation Committee, the Board of Directors shall recommend the name of one (1) The Chairman and the Representative Director candidate at the General Meetings of Shareholders. Where the Chairman and

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the Representative Director candidate is appointed as an Inside Director at General Meetings of Shareholders, the Board of Directors shall appoint the Chairman and the Representative Director candidate as the Chairman and the Representative Director.

(3) Details concerning the composition and operation of the CEO Candidate Recommendation Committee shall be determined by the Board of Directors.

Article 29-2. Recommendation of Inside Director Candidate other than the Chairman and the Representative Director

A candidate for Inside Director other than the Chairman and the Representative Director shall be recommended by the Board of Directors after his qualification is approved by the Director Candidate Recommendation and Management Committee as prescribed in Paragraph (1) of Article 45.

Article 29-3. Qualification for Inside Director Candidate

(1) An Inside Director shall be a person capable of managing the Company, who has working experience as an officer or employee of the Company or sufficient experience in the related business area.

(2) A person (i) who retired prior to the completion of the full term of office due to gross negligence or unsound management, (ii) who was sentenced to imprisonment or a heavier penalty and for whom five years have not passed since the termination thereof or exemption therefrom or (iii) who is serving a suspended sentence or who was sentenced to a stay of execution and for whom two years have not passed since the expiration of the period of stay of execution cannot be an Inside Director of the Company.

Article 30. Recommendation of Candidate for Outside Directors

(1) A candidate for Outside Director shall be recommended by the Director Candidate Recommendation and Management Committee as prescribed in Paragraph (1) of Article 45. Such candidates shall be among those qualified persons as prescribed in Article 31.

(2) A shareholder holding voting shares of the Company may recommend a candidate for Outside Director to the Director Candidate Recommendation and Management Committee by the exercise of the shareholder proposal right under the applicable legislation.

(3) The Director Candidate Recommendation and Management Committee shall determine the details regarding recommendation for, and evaluation on qualification of, candidates for Outside Director.

Article 31. Qualification for Candidate for Outside Directors

An Outside Director must have sufficient and professional knowledge or experience in the areas of industry, finance, education, law, accounting and public administration and also must be qualified under the relevant laws.

Article 32. Duties of Representative Director

(1) Each Representative Director shall represent the Company, execute matters determined by the Board of Directors, control all affairs of the Company and provide all Directors with the updated information regarding the recent status of management and the Company.

(2) The Representative Directors and Directors shall carry on the administration of the affairs of the Company in accordance with the duties assigned to them by the Chairman.

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Article 33. Duties of Directors

(1) The Directors, as the prudent manager, shall faithfully perform their duties for the Company such as attending the meeting of the Board of Directors, etc. in accordance with the laws and the Articles of Incorporation.

(2) If a Director finds any matter that may inflict any material loss to the Company, he shall immediately report it to the Audit Committee.

Article 34. Term of Directors

The term of office of the Directors shall be within three (3) years; provided, however, that the term of office for Directors shall be extended until the close of an Ordinary General Meeting of Shareholders which is to be held with respect to the fiscal year which is the last to end during their terms in office.

Article 35. By-Election

(1) In the event of any of the absence or inability to perform the duties as a Director, an Extraordinary General Meeting of Shareholders shall be convened to fill the vacancy. However, in the case the number of remaining Directors satisfies the legal requirement and such vacancy does not cause any difficulties in the operation of the business, the appointment through by-election may be suspended, or postponed until the holding of the next Ordinary General Meeting of Shareholders.

(2) In the event that the number of Outside Directors is less than a majority of total number of Directors due to death or resignation of Outside Directors or for any other reason, Outside Directors shall be elected to fill the vacancy at the General Meeting of Shareholders to be held first after such cause so as for the number of Outside Directors to constitute a majority of total number of Directors.

Article 36. Remuneration of Directors

(1) The limit of the salaries and performance incentives of the Directors shall be determined by resolution of the General Meeting of Shareholders. The Board of Directors shall determine the detailed operation standards thereof.

(2) Any severance allowance paid to the Inside Directors shall be in accordance with Severance Allowance Regulations for Directors as approved by shareholders at the General Meeting of Shareholders.

(3) The Company may pay to Outside Directors for expenses incurred during performance of services as required of Outside Directors.

Article 37. Indemnification of Directors

The Company shall indemnify, to the extent permitted by the Korean Commercial Code, the Directors from and against all expenses, losses or liabilities incurred in connection with defending any action, claim or proceeding to protect the interest of the Company, except for in case of the Directors’ willful misconduct or negligence with respect to their duties.

Article 38. Authority of the Board of Directors

(1) The Board of Directors shall have the power to take actions in respect of all such acts and things put on the agenda by any of the Directors relating to important matters regarding the administration of the Company or as are required by laws or regulations or by these Articles of Incorporation.

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(2) The Board of Directors may delegate its powers to the Special Committees as prescribed in Paragraph (1) of Article 45 in accordance with the Korean laws and regulations and these Articles of Incorporation.

Article 39. Constitution and Convocation of Meeting of the Board of Directors

(1) The Board of Directors shall consist of all the Directors.

(2) The Presiding Director of the Board of Directors may convene all Meetings of the Board of Directors. Any other Director who wishes to convene a Meeting of the Board of Directors shall make his request to the Presiding Director of the Board of Directors and the Presiding Director shall convene the Meeting. If the Presiding Director of the Board of Directors fails to convene the Meeting without justifiable reasons, other Directors may convene such Meeting.

(3) Written or oral notice of each Meeting of the Board of Directors shall be given at least one day prior to the scheduled meeting date to each of the Directors. No notice shall, however, be required for a regular Meeting of the Board of Directors or if all of the Directors consent thereto.

(4) The Board of Directors may allow the Directors to attend, and vote at, the meeting of the Board of Directors by tele-conferencing, instead of attending and voting in person at such meeting. In such case, a Director participating in the Board Meeting by such arrangement shall be considered to be present at the Meeting of the Board of Directors.

Article 40. Presiding Director of the Board of Directors

(1) The Presiding Director of the Board of Directors shall be appointed by the resolution of the Board of Directors among Outside Directors.

(2) The term of office of the Presiding Director shall be one (1) year, and the Presiding Director shall not be reappointed to the office.

(3) In the event that the Presiding Director cannot preside at a Meeting of the Board of Directors, Outside Director in order of seniority (if the seniority is the same, the oldest has the priority) shall take his place as presiding Director.

Article 41. Adoption of Resolutions of the Board of Directors

(1) The Majority of Directors shall constitute a quorum for a Meeting of the Board of Directors. All actions and resolutions taken at a Meeting of the Board of Directors shall be adopted by the affirmative vote of a majority of the Directors present. Notwithstanding the foregoing, the adoption of a resolution by the Board of Directors with respect to the election of the Chairman and the Representative Director candidate may be separately decided by the Board of Directors whose quorum shall not exceed the affirmative vote of two-thirds (2/3) of all of the Directors.

(2) A Director having a special interest with respect to the resolution shall not exercise his voting right.

Article 42. Formalities of the Board of Directors

Directors shall set the agenda for each Meeting and make proposals for resolution thereat. If any Director plans to make proposals at the Meeting of the Board of Directors, he shall submit a written summary thereof to the Presiding Director of the Board of Directors and the Chairman and Representative Director in advance.

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Article 43. Matters of Urgency

The Chairman and Representative Director may act upon matters of urgency without resolution of the Board of Directors by obtaining prior consent of more than two-thirds (2/3) of other Directors. A Meeting of the Board of Directors for the next term shall be convened to deliberate on and ratify the actions so taken.

Article 44. Minutes of the Meeting of the Board of Directors

With respect to the proceedings of the Meetings of the Board of Directors, the minutes should be made. The agenda, the substances of course, and the results of the proceedings of the Meetings of the Board of Directors, the name of objecting director and the reasons of objection shall be recorded in the minutes which shall bear the names and seals or the signatures thereon of the Directors present at the Meeting.

Article 45. Special Committees

(1) The Company shall have special committees under the control of the Board of Directors as follows:

1. Director Candidate Recommendation and Management Committee;

2. Evaluation and Compensation Committee;

3. Finance and Related Party Transactions Committee;

4. Executive Management Committee; and

5. Audit Committee

(2) Except as otherwise provided by any relevant laws, authority, constitution and operation of the special committee shall be determined by a resolution of the Board of Directors.

(3) Matters regarding composition and duties of the Audit Committee shall be determined in accordance with Chapter VI.

Article 46. Unregistered Officers

(1) The Company shall have Unregistered Officers to execute the matters resolved by the Board of Directors and the matters important to the management of the Company.

(2) The Unregistered Officers shall be appointed by the Representative Director and C.E.O.; provided, however, that the appointment of the Unregistered Officers to the important positions that the Board of Directors decides shall require the approval of the Board of Directors.

(3) The Unregistered Officers are President, Senior Executive Vice Presidents, Senior Managing Directors and Managing Directors, and the salaries and performance incentives payable to such Unregistered Officers shall be determined by the Board of Directors or by the Representative Director and C.E.O., to the extent the Representative Director and C.E.O. has been delegated such authority by the Board of Directors. Any severance allowance shall be distributed in accordance with the standards for the President, Senior Executive Vice Presidents, Senior Managing Directors and Managing Directors pursuant to the Directors Severance Allowance Regulations as approved by the General Meeting of Shareholders.

(4) The allocation of work among the Unregistered Officers shall be decided by the Representative Director and C.E.O..

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(5) The term of office of the Unregistered Officers shall not be more than two (2) years; provided, however, that the proviso of Article 34 may apply mutatis mutandis to the Unregistered Officers.

Article 47. Consultant and Part-time Officer

The Company may have consultants and part-time officers who will be treated as Officers of the Company if it is required for the business.

CHAPTER VI. Audit Committee

Article 48. Constitution and Appointment of Members of Audit Committee

(1) The Audit Committee of the Company shall consist of three (3) or more Directors. All of the members shall be elected from among the Outside Directors.

(2) A member of the Audit Committee shall be appointed or dismissed at the General Meeting of Shareholders. When appointing a member of the Audit Committee, a shareholder holding more than three percent (3%) of the Company’s issued and outstanding shares shall not be entitled to exercise his voting rights for that excess portion.

(3) In the event that the number of the Audit Committee does not satisfy the requirement referred to in Paragraph (1) due to the death or resignation of members or any other reasons, the members shall be elected to fill the vacancy at the General Meeting of Shareholders to be held first after such cause so as for the number of members to satisfy the requirement referred to in Paragraph (1).

(4) The chairman of the Audit Committee shall be elected by a resolution of the Audit Committee.

Article 49. Duties of Audit Committee

(1) The Audit Committee shall examine the accounting and financial records of the Company.

(2) The Audit Committee may request to convene an Extraordinary General Meeting of Shareholders by submitting a written request specifying the agenda of the meeting and the reason for the meeting.

(3) If deemed necessary, the Audit Committee may request to convene a Board Meeting by submitting a written request specifying the agenda of a meeting and the reason for a meeting to the Presiding Director.

(4) The Audit Committee may directly convene a Board Meeting if a meeting has not been convened immediately on the request of the Audit Committee in accordance with Paragraph (3) of this Article.

(5) If it is required for management purpose, the Audit Committee may demand a subsidiary to make a report on the business. In such case, if the subsidiary fails to make an immediate report, or it is required to confirm the contents of such report, the Audit Committee may investigate the business and assets of the subsidiary.

(6) The Audit Committee shall prepare an audit report on the Company’s financial statements and shall report thereof to the General Meeting of Shareholders.

(7) The Audit Committee shall record the course of the proceedings of their meetings and the results thereof in the minutes and shall record the procedure of the inspection and the results thereof in the inspection book, on which the name and seal of the members shall be affixed or which shall be signed by such members.

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(8) The Audit Committee may receive advice from outside professionals when necessary, for which the Company shall cover any expenses therefrom.

Article 50. Quorum and Adoption of Resolutions

Article 41 shall apply, mutatis mutandis, to the quorum and adoption of resolution of the Audit Committee.

Article 51. Appointment of External Auditor

An External Auditor of the Company pursuant to the Act on External Audit of Stock Companies shall be appointed by the approval of the Audit Committee. The details of the aforesaid appointment shall be reported to the shareholders at the Ordinary General Meeting of Shareholders for the fiscal year during which such appointment was or shall be made known to the shareholders in accordance with relevant laws and regulations.

CHAPTER VII. ACCOUNTING

Article 52. Fiscal Year

The fiscal year of the Company shall commence on each January 1 and shall end on December 31 of the same year.

Article 53. Submission, Approval and Publication of Financial Statements

(1) After the end of each fiscal year, the Representative Directors shall prepare and submit, with the Board of Directors’ approval therefor, to the Audit Committee at least six (6) weeks before the date set for an Ordinary General Meeting of Shareholders, the following documents with its supplementary schedules:

1. A balance sheet;

2. A profit and loss statement;

3. Documents designated by the Presidential Decree and decided by the Board of Directors;

4. A consolidated financial statement; and

5. A business report for the pertinent fiscal year:

(2) Upon receiving the documents specified under Paragraph (1) above, the Audit Committee shall prepare and submit an auditor’s report to the Representative Director one (1) week before the date of each Ordinary General Meeting of Shareholders.

(3) The Representative Directors shall make available for inspection for five (5) years at the head office and copies thereof for three (3) years at branch offices, the documents prescribed under Items 1 through 4 of Paragraph (1) of this Article and the auditor’s report of the Company beginning from one (1) week before the date of each Ordinary General Meeting of Shareholders.

(4) The Representative Director shall submit and seek approval of the documents prescribed under Items 1 through 4 of Paragraph (1) of this Article at an Ordinary General Meeting of Shareholders. The Representative Directors shall report a business report to an Ordinary General Meeting of Shareholders.

(5) The Representative Director shall make public the balance sheet, without delay, after an Ordinary General Meeting of Shareholders has approved the documents described in Paragraph (4).

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Article 54. (Deleted)

Article 55. Disposition of Retained Earnings

Retained earnings for any fiscal year shall be disposed in the following order, but it may be appropriated for purposes other than those listed below if approved by a General Meeting of Shareholders:

1. Legal reserves (required to be more than one-tenth of cash dividends paid for the pertinent fiscal year);

2. Other statutory reserves;

3. Dividends to shareholders;

4. Merits bonuses for retiring Directors;

5. Discretionary reserves;

6. Average dividend reserves and other dispositions; and

7. Retained earnings carried forward to next fiscal year.

Article 56. Dividends

(1) Dividends may be paid in cash, shares, or any other form of property

(2) In the case of stock dividends, the Company may issue different types of shares to the shareholders by resolution of the General Meeting of Shareholders.

(3) The Company may pay quarterly dividends in cash by a resolution of the Board of Directors each fiscal year. In such case, the record date for the distribution of quarterly dividends shall be the last day of March, June and September. The dividends should be paid within 20 days from the resolution above.

(4) Dividends referred to in Paragraphs (1) and (3) shall be paid to the shareholders and registered pledgees whose names appear in the shareholders’ register of the Company as of the last day of each fiscal year or the record date for the distribution of quarterly dividends.

Article 57. Cancellation of Treasury Stocks

The Company, by a resolution of the Board of Directors, may repurchase and cancel its outstanding shares following the methods set forth in the applicable laws or regulations.

ADDENDA (March 9, 2018)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 50th fiscal year.

ADDENDA (March 11, 2016)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 48th fiscal year.

ADDENDA (March 16, 2012)

Article 27 of the Articles of Incorporation shall be effective from the date the Ordinary General Meeting of Shareholders for the 44th fiscal year approves such Article while the other amended Articles shall be effective from April 15, 2012.

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ADDENDA (February 25, 2011)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 43rd fiscal year.

ADDENDA (February 26, 2010)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 42nd fiscal year.

ADDENDA (February 27, 2009)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 41st fiscal year.

ADDENDA (February 23, 2007)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 39th fiscal year.

ADDENDA (February 24, 2006)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 38th fiscal year.

ADDENDA (March 12, 2004)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 36th fiscal year.

ADDENDA (March 14, 2003)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 35th fiscal year.

ADDENDA (March 15, 2002)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 34th fiscal year.

ADDENDA (March 16, 2001)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 33rd fiscal year.

ADDENDA (March 17, 2000)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 32nd fiscal year.

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ADDENDA (March 16, 1999)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 31st fiscal year.

ADDENDA (August 20, 1998)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 31st fiscal year.

ADDENDA (March 17, 1998)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 30th fiscal year.

ADDENDA (March 14, 1997)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 29th fiscal year.

ADDENDA (March 15, 1996)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 28th fiscal year.

ADDENDA (March 15, 1995)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 27th fiscal year.

ADDENDA (April 15, 1994)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 27th fiscal year.

ADDENDA (March 8, 1993)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 25th fiscal year.

ADDENDA (October 13, 1992)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 25th fiscal year.

ADDENDA (March 7, 1992)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 24th fiscal year.

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ADDENDA (March 14, 1991)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 23rd fiscal year.

ADDENDA (March 6, 1990)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 22nd fiscal year.

ADDENDA (March 15, 1989)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 21st fiscal year.

ADDENDA (February 27, 1988)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 20th fiscal year.

ADDENDA (March 7, 1987)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 19th fiscal year.

ADDENDA (February 26, 1986)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 18th fiscal year.

ADDENDA (February 5, 1985)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 17th fiscal year.

ADDENDA (February 18, 1984)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 16th fiscal year.

ADDENDA (February 23, 1982)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 14th fiscal year.

ADDENDA (February 28, 1981)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 13th fiscal year.

18

ADDENDA (February 24, 1979)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 11th fiscal year.

ADDENDA (February 25, 1978)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 10th fiscal year.

ADDENDA (February 8, 1977)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 9th fiscal year.

ADDENDA (February 6, 1976)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 8th fiscal year.

ADDENDA (February 8, 1975)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 7th fiscal year.

ADDENDA (February 5, 1974)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 6th fiscal year.

ADDENDA (February 12, 1973)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 5th fiscal year.

ADDENDA (November 29, 1972)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 5th fiscal year.

ADDENDA (February 4, 1972)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 4th fiscal year.

ADDENDA (November 23, 1971)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 4th fiscal year.

19

ADDENDA (February 6, 1971)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 3rd fiscal year.

ADDENDA (February 7, 1970)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 2nd fiscal year.

ADDENDA (June 16, 1969)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 2nd fiscal year.

ADDENDA (March 20, 1969)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 2nd fiscal year.

ADDENDA (February 20, 1969)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Ordinary General Meeting of Shareholders for the 1st fiscal year.

ADDENDA (July 10, 1968)

The amended Articles of Incorporation shall be effective from the date on which they are approved by the resolution at the Extraordinary General Meeting of Shareholders for the 1st fiscal year.

ADDENDA (March 6, 1968)

The Articles of Incorporation shall be effective from March 6, 1968.

20

EX-8.1

Exhibit 8.1

LIST OF CONSOLIDATED SUBSIDIARIES

For a list of POSCO’s consolidated subsidiaries as of December 31, 2017 and their jurisdiction of incorporation, please see Note 1(b) of Notes to Consolidated Financial Statements contained in POSCO’s annual report on Form 20-F for fiscal year 2017.

EX-12.1

Exhibit 12.1

CERTIFICATION

I, Kwon, Oh-Joon, certify that:

1. I have reviewed this annual report on Form 20-F of POSCO;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: April 27, 2018

/s/ Kwon, Oh-Joon

Kwon, Oh-Joon

Chief Executive Officer and

Representative Director

EX-12.2

Exhibit 12.2

CERTIFICATION

I, Chon, Jung-Son, certify that:

1. I have reviewed this annual report on Form 20-F of POSCO;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: April 27, 2018

/s/ Chon, Jung-Son

Chon, Jung-Son

Senior Executive Vice President and

Head of Corporate Strategy and Finance Center

EX-13.1

Exhibit 13.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsection (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsection (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of POSCO, a corporation organized under the laws of the Republic of Korea (the “Company”), does hereby certify, to such officer’s knowledge, that:

The annual report on Form 20-F for the year ended December 31, 2017 (the “Form 20-F”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operation of the Company.

/s/ Kwon, Oh-Joon

Kwon, Oh-Joon

Chief Executive Officer and

Representative Director

Date: April 27, 2018

/s/ Chon, Jung-Son

Chon, Jung-Son

Senior Executive Vice President and Head of Corporate Strategy and Finance Center

Date: April 27, 2018

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to POSCO and will be retained by POSCO and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document - Document and Entity Information [Abstract]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	PKX
Entity Registrant Name	POSCO
Entity Central Index Key	0000889132
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	79,999,604

XML

Consolidated Statements of Financial Position - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	₩ 2,612,530	₩ 2,447,619
Trade accounts and notes receivable, net	8,824,563	9,674,026
Other receivables, net	1,636,006	1,539,742
Other short-term financial assets	7,045,880	5,224,911
Inventories	10,793,781	9,515,895
Current income tax assets	38,489	46,473
Assets held for sale	71,768	311,958
Other current assets	821,242	894,484
Total current assets	31,844,259	29,655,108
Long-term trade accounts and notes receivable, net	731,570	51,124
Other receivables, net	879,176	762,912
Other long-term financial assets	1,911,684	2,657,692
Investments in associates and joint ventures	3,557,932	3,882,389
Investment property, net	1,064,914	1,117,720
Property, plant and equipment, net	31,883,535	33,770,339
Intangible assets, net	5,952,269	6,088,729
Defined benefit assets, net	8,224	83,702
Deferred tax assets	1,463,055	1,500,219
Other non-current assets	489,011	567,680
Total non-currentassets	47,941,370	50,482,506
Total assets	79,785,629	80,137,614
Liabilities
Trade accounts and notes payable	3,465,146	4,073,286
Short-term borrowings and current installments of long-term borrowings	11,274,516	10,194,807
Other payables	1,753,461	1,851,659
Other short-term financial liabilities	129,812	149,748
Current income tax liabilities	515,538	446,071
Provisions	110,946	114,865
Other current liabilities	2,240,919	2,113,873
Total current liabilities	19,490,338	18,944,309
Long-term trade accounts and notes payable	12,532	44,512
Long-term borrowings, excluding current installments	9,789,141	12,510,191
Other payables	147,750	208,559
Other long-term financial liabilities	114,105	81,309
Defined benefit liabilities, net	137,193	123,604
Deferred tax liabilities	1,904,242	1,642,939
Long-term provisions	477,172	337,739
Other non-current liabilities	386,431	479,183
Total non-currentliabilities	12,968,566	15,428,036
Total liabilities	32,458,904	34,372,345
Equity
Share capital	482,403	482,403
Capital surplus	1,422,021	1,407,247
Hybrid bonds	996,919	996,919
Reserves	(682,556)	(143,985)
Treasury shares	(1,533,054)	(1,533,468)
Retained earnings	42,974,658	41,125,712
Equity attributable to owners of the controlling company	43,660,391	42,334,828
Non-controllinginterests	3,666,334	3,430,441
Total equity	47,326,725	45,765,269
Total liabilities and equity	₩ 79,785,629	₩ 80,137,614

XML

Consolidated Statements of Comprehensive Income (Loss) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of comprehensive income [abstract]
Revenue	₩ 60,186,867	₩ 52,939,771	₩ 58,522,268
Cost of sales	(51,915,597)	(46,271,465)	(52,018,434)
Gross profit	8,271,270	6,668,306	6,503,834
Selling and administrative expenses
Administrative expenses	(2,176,800)	(2,291,540)	(2,395,248)
Selling expenses	(1,557,277)	(1,553,686)	(1,728,956)
Other operating income and expenses
Other operating income	451,224	215,136	549,048
Other operating expenses	(792,296)	(755,720)	(1,442,298)
Operating profit	4,196,121	2,282,496	1,486,380
Share of profit (loss) of equity-accounted investees, net	10,540	(88,677)	(506,054)
Finance income and costs
Finance income	2,372,667	2,231,980	2,557,073
Finance costs	(2,484,277)	(3,014,190)	(3,387,054)
Profit before income taxes	4,095,051	1,411,609	150,345
Income tax expense	(1,185,740)	(379,544)	(266,560)
Profit (loss)	2,909,311	1,032,065	(116,215)
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans	(47,543)	20,540	41,954
Items that are or may be reclassified subsequently to profit or loss:
Capital adjustment arising from investments in equity-method investees	(217,388)	134,590	(82,509)
Net changes in unrealized fair value of available-for-sale investments	(31,389)	310,608	(187,854)
Foreign currency translation differences	(264,695)	(11,491)	66,280
Gain or losses on valuation of derivatives	(143)
Other comprehensive income (loss), net of tax	(561,158)	454,247	(162,129)
Total comprehensive income (loss)	2,348,153	1,486,312	(278,344)
Profit (loss) attributable to:
Owners of the controlling company	2,756,230	1,354,807	171,494
Non-controllinginterests	153,081	(322,742)	(287,709)
Profit (loss)	2,909,311	1,032,065	(116,215)
Total comprehensive income (loss) attributable to:
Owners of the controlling company	2,184,402	1,814,030	23,864
Non-controllinginterests	163,751	(327,718)	(302,208)
Total comprehensive income (loss)	₩ 2,348,153	₩ 1,486,312	₩ (278,344)
Basic and diluted earnings per share (in Won)	₩ 34,040	₩ 16,521	₩ 1,731

XML

Consolidated Statements of Changes in Equity - KRW (₩) ₩ in Millions	Total	Final dividends [member]	Interim dividends [member]	Share capital [member]	Capital surplus [member]	Hybrid bonds [member]	Reserves [member]	Treasury shares [member]	Retained earnings [member]	Retained earnings [member] Final dividends [member]	Retained earnings [member] Interim dividends [member]	Attributable to owners of the controlling company [member]	Attributable to owners of the controlling company [member] Final dividends [member]	Attributable to owners of the controlling company [member] Interim dividends [member]	Non-controlling interests [member]	Non-controlling interests [member] Final dividends [member]	Non-controlling interests [member] Interim dividends [member]
Beginning balance at Dec. 31, 2014	₩ 45,257,396			₩ 482,403	₩ 1,083,718	₩ 996,919	₩ (408,773)	₩ (1,534,457)	₩ 40,937,148			₩ 41,556,958			₩ 3,700,438
Comprehensive income (loss):
Profit (loss)	(116,215)								171,494			171,494			(287,709)
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax	41,954								38,771			38,771			3,183
Capital adjustment arising from investments in equity-accounted investees, net of tax	(82,509)						(81,418)					(81,418)			(1,091)
Net changes in the unrealized fair value of available-for-sale investments, net of tax	(187,854)						(183,077)					(183,077)			(4,777)
Foreign currency translation differences, net of tax	66,280						78,094					78,094			(11,814)
Total comprehensive income (loss)	(278,344)						(186,401)		210,265			23,864			(302,208)
Transactions with owners of the controlling company, recognized directly in equity:
Dividends		₩ (512,368)	₩ (227,687)							₩ (479,958)	₩ (159,987)		₩ (479,958)	₩ (159,987)		₩ (32,410)	₩ (67,700)
Changes in subsidiaries	(311,548)														(311,548)
Changes in ownership interests in subsidiaries	1,155,254				310,485							310,485			844,769
Interest of hybrid bonds	(67,761)								(43,574)			(43,574)			(24,187)
Disposal of treasury shares	524				(35)			559				524
Others	(2,265)				(1,089)		418		(2,398)			(3,069)			804
Total transactions with owners of the controlling company	34,149				309,361		418	559	(685,917)			(375,579)			409,728
Ending balance at Dec. 31, 2015	45,013,201			482,403	1,393,079	996,919	(594,756)	(1,533,898)	40,461,496			41,205,243			3,807,958
Comprehensive income (loss):
Profit (loss)	1,032,065								1,354,807			1,354,807			(322,742)
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax	20,540								9,787			9,787			10,753
Capital adjustment arising from investments in equity-accounted investees, net of tax	134,590						124,626					124,626			9,964
Net changes in the unrealized fair value of available-for-sale investments, net of tax	310,608						314,428					314,428			(3,820)
Foreign currency translation differences, net of tax	(11,491)						10,382					10,382			(21,873)
Total comprehensive income (loss)	1,486,312						449,436		1,364,594			1,814,030			(327,718)
Transactions with owners of the controlling company, recognized directly in equity:
Dividends		(530,307)	(179,992)							(479,974)	(179,992)		(479,974)	(179,992)		(50,333)
Changes in subsidiaries	49,250														49,250
Changes in ownership interests in subsidiaries	(7,894)				8,650							8,650			(16,544)
Interest of hybrid bonds	(68,085)								(43,832)			(43,832)			(24,253)
Disposal of treasury shares	462				32			430				462
Others	2,322				5,486		1,335		3,420			10,241			(7,919)
Total transactions with owners of the controlling company	(734,244)				14,168		1,335	430	(700,378)			(684,445)			(49,799)
Ending balance at Dec. 31, 2016	45,765,269			482,403	1,407,247	996,919	(143,985)	(1,533,468)	41,125,712			42,334,828			3,430,441
Comprehensive income (loss):
Profit (loss)	2,909,311								2,756,230			2,756,230			153,081
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax	(47,543)								(38,043)			(38,043)			(9,500)
Capital adjustment arising from investments in equity-accounted investees, net of tax	(217,388)						(214,794)					(214,794)			(2,594)
Net changes in the unrealized fair value of available-for-sale investments, net of tax	(31,389)						(45,953)					(45,953)			14,564
Foreign currency translation differences, net of tax	(264,695)						(272,902)					(272,902)			8,207
Gain or losses on valuation of derivatives, net of tax	(143)						(136)					(136)			(7)
Total comprehensive income (loss)	2,348,153						(533,785)		2,718,187			2,184,402			163,751
Transactions with owners of the controlling company, recognized directly in equity:
Dividends		₩ (502,896)	₩ (359,993)							₩ (459,987)	₩ (359,993)		₩ (459,987)	₩ (359,993)		₩ (42,909)
Changes in subsidiaries	(7,151)														(7,151)
Changes in ownership interests in subsidiaries	163,707				16,287							16,287			147,420
Interest of hybrid bonds	(67,787)								(43,600)			(43,600)			(24,187)
Disposal of treasury shares	540				126			414				540
Others	(13,117)				(1,639)		(4,786)		(5,661)			(12,086)			(1,031)
Total transactions with owners of the controlling company	(786,697)				14,774		(4,786)	414	(869,241)			(858,839)			72,142
Ending balance at Dec. 31, 2017	₩ 47,326,725			₩ 482,403	₩ 1,422,021	₩ 996,919	₩ (682,556)	₩ (1,533,054)	₩ 42,974,658			₩ 43,660,391			₩ 3,666,334

XML

Consolidated Statements of Cash Flows - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities
Profit (loss)	₩ 2,909,311	₩ 1,032,065	₩ (116,215)
Adjustments for:
Depreciation	2,887,646	2,835,843	2,836,663
Amortization	409,774	378,004	381,583
Finance income	(1,376,324)	(882,905)	(1,165,340)
Finance costs	1,440,282	1,501,953	1,852,862
Income tax expense	1,185,740	379,544	266,560
Gain on disposal of property, plant and equipment	(32,145)	(23,826)	(22,730)
Loss on disposal of property, plant and equipment	151,343	86,622	101,732
Impairment losses on property, plant and equipment	117,231	196,882	136,269
Gain on disposal of investments in subsidiaries, associates and joint ventures	(81,794)	(23,305)	(88,718)
Loss on disposal of investments in subsidiaries, associates and joint ventures	19,985	22,499	18,996
Share of loss (profit) of equity-accounted investees	(10,540)	88,677	506,054
Expenses related to post-employment benefits	199,926	333,139	245,402
Increase to provisions	215,383	189,914	86,903
Bad debt expenses	271,871	202,717	337,235
Loss on valuation of inventories	78,560	152,249	152,952
Impairment losses on goodwill and intangible assets	167,995	127,875	161,412
Gain on disposal of assets held for sale	(1,180)	(23,112)	(227,956)
Loss on disposal of assets held for sale	608	254	190,357
Impairment losses on assets held for sale		24,890	133,547
Others, net	(33,092)	7,879	48,079
Adjustments to reconcile profit (loss) other than changes in working capital	5,611,269	5,575,793	5,951,862
Changes in operating assets and liabilities	(1,841,633)	(404,570)	2,784,452
Interest received	244,980	206,839	198,193
Interest paid	(735,735)	(691,264)	(831,566)
Dividends received	225,514	152,559	237,715
Income taxes paid	(806,396)	(602,004)	(622,612)
Net cash provided by operating activities	5,607,310	5,269,418	7,601,829
Cash flows from investing activities
Acquisitions of short-term financial instruments	(20,843,530)	(18,578,809)	(13,037,990)
Proceeds from disposal of short-term financial instruments	19,146,634	17,177,409	10,595,379
Acquisitions of long-term financial instruments	(22,532)	(8,249)	(34,733)
Increase in loans	(1,055,895)	(603,332)	(295,689)
Collection of loans	667,045	557,064	308,906
Acquisitions of available-for-sale investments	(66,278)	(328,151)	(87,824)
Proceeds from disposal of available-for-sale investments	1,006,856	280,066	308,161
Acquisitions of investments in associates and joint ventures	(60,277)	(173,769)	(77,155)
Proceeds from disposal of investments in associates and joint ventures	74,881	7,914	11,813
Acquisitions of property, plant and equipment	(2,287,580)	(2,324,112)	(2,560,244)
Proceeds from disposal of property, plant and equipment	39,183	44,330	59,031
Acquisitions of investment property	(69,169)	(45,735)	(61,478)
Proceeds from disposal of investment property	5,771	11,624	1,120
Acquisitions of intangible assets	(343,423)	(138,181)	(289,148)
Proceeds from disposal of intangible assets	28,502	8,672	12,832
Proceeds from disposal of assets held for sale	203,958	305,813	127,133
Increase in cash from (payment for) acquisition of business, net of cash acquired	(174,165)	4,503
Cash received (decrease in cash) from disposal of business, net of cash transferred	(53,008)	21,223	469,576
Others, net	(14,847)	27,093	15,634
Net cash used in investing activities	(3,817,874)	(3,754,627)	(4,534,676)
Cash flows from financing activities
Proceeds from borrowings	1,725,983	1,988,665	1,779,097
Repayment of borrowings	(3,136,016)	(4,274,895)	(3,509,970)
Proceeds from (repayment of) short-term borrowings, net	558,083	(885,861)	(846,230)
Payment of cash dividends	(863,450)	(708,970)	(822,570)
Payment of interest of hybrid bonds	(67,783)	(68,097)	(67,725)
Capital contribution from non-controlling interests and proceeds from disposal of subsidiary while maintaining control	266,219	24,704	1,260,053
Capital deduction from non-controlling interests and additional acquisition of interests in subsidiaries	(26,288)	(11,301)	(10,810)
Others, net	(22,276)	(15,212)	(23,446)
Net cash used in financing activities	(1,565,528)	(3,950,967)	(2,241,601)
Effect of exchange rate fluctuation on cash held	(58,997)	12,611	23,496
Net increase (decrease) in cash and cash equivalents	164,911	(2,423,565)	849,048
Cash and cash equivalents at beginning of the period	2,447,619	4,871,184	4,022,136
Cash and cash equivalents at end of the period	₩ 2,612,530	₩ 2,447,619	₩ 4,871,184

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General Information

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

General Information

1. General Information

General information about POSCO, its 40 domestic subsidiaries including POSCO ENGINEERING & CONSTRUCTION CO., LTD., 139 foreign subsidiaries including POSCO America Corporation (collectively “the Company”) and its 111 associates and joint ventures are as follows:

(a) The controlling company

POSCO, the controlling company, was incorporated on April 1, 1968, under the Commercial Code of the Republic of Korea to manufacture and sell steel rolled products and plates in the domestic and foreign markets.

The shares of POSCO have been listed on the Korea Exchange on June 10, 1988. POSCO owns and operates two steel plants (Pohang and Gwangyang) and one office in Korea and it also operates internationally through six of its overseas liaison offices.

As of December 31, 2017, POSCO’s shareholders are as follows:

Shareholder’s name	Number of shares		Ownership (%)
National Pension Service		9,660,885		11.08
Nippon Steel & Sumitomo Metal Corporation(*1)		2,894,712		3.32
BlackRock Institutional Trust Company, N.A.(*1)		2,483,875		2.85
Government of Singapore Investment Corp Private Limited		1,934,312		2.22
KB Financial Group Inc. and subsidiaries(*2)		1,919,361		2.20
Others		68,293,690		78.33
		87,186,835		100.00

(*1) Includes American Depository Receipts (ADRs) of POSCO, each of which represents 0.25 share of POSCO’s common share which has par value of ￦5,000 per share.

(*2) Includes shares held by subsidiaries pursuant to Articles of Incorporation.

As of December 31, 2017, the shares of POSCO are listed on the Korea Exchange, while its ADRs are listed on the New York Stock Exchange.

(b) Consolidated subsidiaries

Details of consolidated subsidiaries as of December 31, 2016 and 2017 are as follows:

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
[Domestic]
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	Engineering and construction		52.80		—		52.80		52.80		—		52.80		Pohang
POSCO Processing & Service	Steel sales and trading		93.95		0.45		94.40		93.95		0.45		94.40		Seoul
POSCO COATED & COLOR STEEL Co., Ltd.	Coated steel manufacturing		56.87		—		56.87		56.87		—		56.87		Pohang
POSCO ICT	Computer hardware and software distribution		65.38		—		65.38		65.38		—		65.38		Pohang
POSCO Research Institute	Economic research and consulting		100.00		—		100.00		100.00		—		100.00		Seoul
POSMATE	Business facility maintenance		57.25		11.05		68.30		83.83		16.17		100.00		Seoul
POSCO A&C	Architecture and consulting		100.00		—		100.00		100.00		—		100.00		Seoul
POSCO Venture Capital Co., Ltd.	Investment in venture companies		95.00		—		95.00		95.00		—		95.00		Pohang
eNtoB Corporation	Electronic commerce		7.50		53.63		61.13		7.50		53.63		61.13		Seoul
POSCO CHEMTECH	Refractories manufacturing and sales		60.00		—		60.00		60.00		—		60.00		Pohang
POSCO-Terminal Co., Ltd.	Transporting and warehousing		51.00		—		51.00		51.00		—		51.00		Gwangyang
POSCO M-TECH	Packing materials manufacturing and sales		48.85		—		48.85		48.85		—		48.85		Pohang
POSCO ENERGY CO., LTD.	Generation of electricity		89.02		—		89.02		89.02		—		89.02		Seoul
POSCO NIPPON STEEL RHF JOINT VENTURE.CO.,Ltd.	Steel byproduct manufacturing and sales		70.00		—		70.00		70.00		—		70.00		Pohang
MegaAsset Co.,Ltd.	Real estate rental and sales		—		100.00		100.00		—		100.00		100.00		Incheon
Future Creation Fund Postech Early Stage account	Investment in venture companies		—		40.00		40.00		—		40.00		40.00		Seoul
POSCO WOMAN’S FUND	Investment in venture companies		—		40.00		40.00		—		40.00		40.00		Seoul
POSPOWER Co., Ltd.	Generation of electricity		—		100.00		100.00		—		100.00		100.00		Samcheok
Songdo Posco Family housing	House manufacturing and management		—		100.00		100.00		—		100.00		100.00		Incheon
Posco Group University	Education service and real estate business		100.00		—		100.00		100.00		—		100.00		Incheon
HOTEL LAONZENA	Hotel business		—		100.00		100.00		—		100.00		100.00		Daegu
Growth Ladder POSCO K-Growth Global Fund	Investment in venture companies		—		50.00		50.00		—		50.00		50.00		Pohang
2015 POSCO New technology II Fund	Investment in venture companies		—		25.00		25.00		—		25.00		25.00		Pohang
POCA STEM Co., Ltd	Stem cell medicine development		—		100.00		100.00		—		100.00		100.00	Seoul
Posco e&c Songdo International Building	Non-residential building rental		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO ES MATERIALS CO., Ltd.	Secondary and storage battery manufacturing		75.32		—		75.32		75.32		—		75.32	Gumi
Poscoene	Refuse derived fuel and power generation		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO Humans	Construction		90.30		—		90.30		90.30		—		90.30	Pohang
Mapo Hibroad Parking co., Ltd.	Construction		—		70.99		70.99		—		71.00		71.00	Seoul
BLUE O&M Co.,Ltd.	Engineering service		—		100.00		100.00		—		100.00		100.00	Pohang
Busan E&E Co,. Ltd.	Refuse derived fuel and power generation		70.00		—		70.00		70.00		—		70.00	Busan
POSCO Family Strategy Fund	Investment in venture companies		69.91		30.09		100.00		69.91		30.09		100.00	Pohang
POSCO DAEWOO Corporation	Trading, energy & resource development and others		60.31		—		60.31		62.90		0.04		62.94	Seoul
Pohang Scrap Recycling Distribution Center Co., Ltd.	Steel processing and sales		—		51.00		51.00		—		51.00		51.00	Pohang
PSC Energy Global Co., Ltd.	Investment in energy industry		—		100.00		100.00		—		100.00		100.00	Pohang
Suncheon Eco Trans Co., Ltd	Train manufacturing and management		100.00		—		100.00		100.00		—		100.00	Suncheon
POSCO Research & Technology	Intellectual Property Services and consulting		—		—		—		100.00		—		100.00	Seoul
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2	Private equity trust		—		—		—		97.47		—		97.47	Seoul
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5	Private equity trust		—		—		—		—		99.67		99.67	Seoul
Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust	Private equity trust		—		—		—		99.01		—		99.01	Seoul
IT Engineering CO. Ltd	Automotive engineering service		—		17.00		17.00		—		—		—	Seoul
POSCO Engineering CO.,Ltd	Construction and engineering service		—		95.56		95.56		—		—		—	Incheon
[Foreign]
POSCO America Corporation	Steel trading		99.45		0.55		100.00		99.45		0.55		100.00	USA
POSCO AUSTRALIA PTY LTD	Raw material sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Canada Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO Asia Co., Ltd.	Steel and raw material trading		100.00		—		100.00		100.00		—		100.00	China
POSCO-CTPC Co., Ltd.	Steel manufacturing and sales		56.60		43.40		100.00		56.60		43.40		100.00	China
POSCO E&C Vietnam Co., Ltd.	Steel structure manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Vietnam
Zhangjiagang Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		58.60		23.88		82.48		58.60		23.88		82.48	China
POSCO(Guangdong) Coated Steel Co., Ltd.	Plating steel sheet manufacturing and sales		87.04		10.04		97.08		87.04		10.04		97.08	China
POSCO (Thailand) Company Limited	Steel manufacturing and sales		85.62		14.38		100.00		88.58		11.42		100.00	Thailand
Myanmar POSCO Steel Co., Ltd	Zinc relief manufacturing and sales		70.00		—		70.00		70.00		—		70.00	Myanmar
POSCO-MKPC SDN BHD	Steel manufacturing and sales		44.69		25.31		70.00		44.69		25.31		70.00	Malaysia
Qingdao Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		70.00		30.00		100.00		70.00		30.00		100.00	China
POSCO(Suzhou) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-China Qingdao Processing Center Co., Ltd.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
POS-ORE PTY LTD	Iron ore sales and sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-China Holding Corp.	Holding company		100.00		—		100.00		100.00		—		100.00	China
POSCO JAPAN Co., Ltd.	Steel trading		100.00		—		100.00		100.00		—		100.00	Japan
POS-CD PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POS-GC PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-India Private Limited	Steel manufacturing and sales		99.99		—		99.99		99.99		—		99.99	India
POSCO-India Pune Processing Center. Pvt. Ltd.	Steel manufacturing and sales		65.00		—		65.00		65.00		—		65.00	India
POSCO Japan PC CO., LTD	Steel manufacturing and sales		—		86.12		86.12		—		86.12		86.12	Japan
POSCO-CFPC Co., Ltd.	Steel manufacturing and sales		39.60		60.40		100.00		39.60		60.40		100.00	China
POSCO E&C CHINA Co., Ltd.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	China
POSCO MPPC S.A. de C.V.	Steel manufacturing and sales		—		95.00		95.00		21.02		75.29		96.31	Mexico
Zhangjigang Pohang Port Co., Ltd.	Loading and unloading service		—		100.00		100.00		—		100.00		100.00	China
POSCO-VIETNAM Co., Ltd.	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Vietnam
POSCO MEXICO S.A. DE C.V.	Automotive steel sheet manufacturing and sales		84.84		15.16		100.00		84.84		15.16		100.00	Mexico
POSCAN Elkview	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO-Poland Wroclaw Processing Center Sp. z o. o.	Steel manufacturing and sales		60.00		—		60.00		60.00		—		60.00	Poland
POS-NP PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO RUS LLC	Trading and business development		90.00		10.00		100.00		90.00		10.00		100.00	Russia
POSCO DAEWOO WAIGAIQIAO SHANGHAI CO., LTD	Intermediary trade & bonded warehouse operation		—		100.00		100.00		—		100.00		100.00	China
PT. Bio Inti Agrindo	Forest resources development		—		85.00		85.00		—		85.00		85.00	Indonesia
POSCO ENGINEERING AND CONSTRUCTION AUSTRALIA PTY LTD	Iron ore development and sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd.	Steel manufacturing and sales		50.00		10.00		60.00		50.00		10.00		60.00	China
POSCO Thainox Public Company Limited	STS cold-rolled steel manufacturing and sales		84.93		—		84.93		84.88		—		84.88	Thailand
Hunchun Posco Hyundai Logistics	Logistics		—		80.00		80.00		—		80.00		80.00	China
POSCO DAEWOO VIETNAM CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO(Chongqing) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
SUZHOU POSCO-CORE TECHNOLOGY CO., LTD.	Component manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
PT.Krakatau Posco Chemtech Calcination	Quicklime manufacturing and sales		—		80.00		80.00		—		80.00		80.00	Indonesia
POSCO AFRICA (PROPRIETARY) LIMITED	Mine development		100.00		—		100.00		100.00		—		100.00	South Africa
POSCO ICT BRASIL	IT service and engineering		—		100.00		100.00		—		100.00		100.00	Brazil
LA-SRDC	Scrap manufacturing		—		100.00		100.00		—		100.00		100.00	USA
DONG FANG JIN HONG	Real estate development, rental and management		—		100.00		100.00		—		100.00		100.00	China
POSCO AMERICA COMERCIALIZADORA S DE RL DE CV	Human resource service		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO(Guangdong) Automotive Steel Co., Ltd.	Steel manufacturing and sales		83.64		10.00		93.64		83.64		10.00		93.64	China
POSCO-Malaysia SDN. BHD.	Steel manufacturing and sales		81.79		13.63		95.42		81.79		13.63		95.42	Malaysia
PT KRAKATAU BLUE WATER	Wastewater treatment facilities operation and maintenance		—		67.00		67.00		—		67.00		67.00	Indonesia
POSCO DAEWOO MYANMAR CORPORATION LIMITED	Trading business		—		100.00		100.00		—		100.00		100.00	Myanmar
POSCO-Italy Processing Center	Stainless steel sheet manufacturing and sales		80.00		10.00		90.00		80.00		10.00		90.00	Italy
POSCO DAEWOO E&P CANADA CORPORATION	Crude oil and natural gas mining		—		100.00		100.00		—		100.00		100.00	Canada
Myanmar POSCO C&C Company, Limited.	Steel manufacturing and sales		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO ICT VIETNAM	IT service and electric control engineering		—		100.00		100.00		—		100.00		100.00	Vietnam
Daewoo Global Development. Pte., Ltd	Real estate development		—		51.00		51.00		—		81.51		81.51	Myanmar
Myanmar POSCO Engineering & Construction Company, Limited.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Myanmar
POS-Minerals Corporation	Mine development management and sales		—		100.00		100.00		—		100.00		100.00	USA
POSCO(Wuhu) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		68.57		31.43		100.00		68.57		31.43		100.00	China
POSCO Engineering and Construction India Private Limited	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	India
POSCO COATED STEEL (THAILAND) CO., LTD.	Automotive steel sheet manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Thailand
Daewoo Amara Company Limited	Real estate development		—		98.54		98.54		—		85.00		85.00	Myanmar
Daewoo Power and Infra (PTY) Limited	Electricity		—		100.00		100.00		—		100.00		100.00	South Africa
POSMATE-CHINA CO., LTD	Business facility maintenance		—		100.00		100.00		—		100.00		100.00	China
Daewoo Precious Resources Co., Ltd.	Resources development		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO-Mexico Villagran Wire-rod Processing Center	Steel manufacturing and sales		56.75		10.00		66.75		56.75		10.00		66.75	Mexico
POSCO-CDSFC	Steel structure manufacturing		50.20		49.80		100.00		50.20		49.80		100.00	China
POSCO ChengDu Processing Center	Steel manufacturing and sales		33.00		10.00		43.00		33.00		10.00		43.00	China
POSCO SUZHOU Processing Center Co., Ltd.	Steel manufacturing and sales		30.00		70.00		100.00		30.00		70.00		100.00	China
POSCO E&C SMART S DE RL DE CV	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO Philippine Manila Processing Center, Inc.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C HOLDINGS CO., Ltd.	Holding company		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO E&C (THAILAND) CO., Ltd.	Construction and engineering		—		100.00		100.00		—		100.00		100.00	Thailand
Daewoo Power PNG Ltd.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT.Krakatau Posco Social Enterprise	Social enterprise		—		100.00		100.00		—		100.00		100.00	Indonesia
Ventanas Philippines Construction Inc	Construction		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C Mongolia	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Mongolia
POSCO Gulf SFC LLC	Steel manufacturing and sales		—		81.93		81.93		—		97.76		97.76	United Arab Emirates
SANPU TRADING Co., Ltd.	Raw material trading		—		70.00		70.00		—		70.00		70.00	China
Zhangjiagang BLZ Pohang International Trading	Steel Intermediate trade		—		100.00		100.00		—		100.00		100.00	China
POSCO MESDC S.A. DE C.V.	Logistics & Steel sales		—		56.80		56.80		—		56.80		56.80	Mexico
POSCO ICT-China	IT service and DVR business		—		100.00		100.00		—		100.00		100.00	China
Pos-Sea Pte Ltd	Steel Intermediate trade		—		67.54		67.54		—		100.00		100.00	Singapore
POSCO Europe Steel Distribution Center	Logistics & Steel sales		50.00		20.00		70.00		50.00		20.00		70.00	Slovenia
POSCO ENGINEERING (THAILAND) CO., LTD.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO VST CO., LTD.	Stainless steel sheet manufacturing and sales		95.65		—		95.65		95.65		—		95.65	Vietnam
POSCO Maharashtra Steel Private Limited	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	India
POSCO India Chennai Steel Processing Center Pvt. Ltd.	Steel manufacturing and sales		100.00		—		100.00		93.34		1.98		95.32	India
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Turkey
POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO VNPC Co., Ltd.)	Steel manufacturing and sales		70.00		—		70.00		83.54		5.29		88.83	Vietnam
POSCO(Liaoning) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-Indonesia Jakarta Processing Center	Steel manufacturing and sales		65.00		20.00		85.00		65.00		20.00		85.00	Indonesia
POSCO E&C VENEZUELA C.A.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Venezuela
PT.MRI	Mine development		65.00		—		65.00		65.00		—		65.00	Indonesia
POSCO TMC INDIA PRIVATE LIMITED	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	India
POSCO-AAPC	Steel manufacturing and sales		—		97.80		97.80		—		97.80		97.80	USA
PT PEN INDONESIA	Construction		—		100.00		100.00		—		100.00		100.00	Indonesia
POSCO(Yantai) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO India Steel Distribution Center Private Ltd.	Steel logistics		—		100.00		100.00		—		100.00		100.00	India
POSCO China Dalian Plate Processing Center Co., Ltd.	Plate manufacturing and sales		80.00		10.00		90.00		80.00		10.00		90.00	China
POSCO-South Asia Company Limited	Steel sales		100.00		—		100.00		100.00		—		100.00	Thailand
POSCO SS-VINA Co., Ltd	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Vietnam
PT.POSCO ICT INDONESIA	IT service and electric control engineering		—		66.99		66.99		—		66.99		66.99	Indonesia
POSCO NCR Coal Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO WA PTY LTD	Iron ore sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Engineering and Construction - UZ	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO AUSTRALIA GP PTY LIMITED	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO DAEWOO POWER (PNGPOM) LTD.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT. KRAKATAU POSCO ENERGY	Electricity production construction and operation		—		90.00		90.00		—		90.00		90.00	Indonesia
POSCO DAEWOO AMERICA CORP.	Trading business		—		100.00		100.00		—		100.00		100.00	USA
POSCO DAEWOO DEUTSCHLAND GMBH	Trading business		—		100.00		100.00		—		100.00		100.00	Germany
POSCO DAEWOO JAPAN Corp	Trading business		—		100.00		100.00		—		100.00		100.00	Japan
POSCO DAEWOO SINGAPORE PTE LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	Singapore
POSCO DAEWOO ITALIA S.R.L.	Trading business		—		100.00		100.00		—		100.00		100.00	Italy
POSCO DAEWOO CHINA CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	China
Daewoo Textile LLC	Textile manufacturing		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO DAEWOO AUSTRALIA HOLDINGS PTY. LTD.	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO MAURITIUS LIMITED	Coal development and sales		—		100.00		100.00		—		100.00		100.00	Mauritius
PT. KRAKATAU POSCO	Steel manufacturing and sales		70.00		—		70.00		70.00		—		70.00	Indonesia
POSCO DAEWOO MEXICO S.A. de C.V.	Trading business		—		100.00		100.00		—		100.00		100.00	Mexico
Daewoo International Guangzhou Corp.	Trading business		—		100.00		100.00		—		100.00		100.00	China
POSCO DAEWOO MALAYSIA SDN BHD	Trading business		—		100.00		100.00		—		100.00		100.00	Malaysia
PT.POSCO INDONESIA INTI	Mine development		99.99		—		99.99		99.99		—		99.99	Indonesia
POSCO DAEWOO SHANGHAI CO., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	China
PGSF, L.P.	Investment in bio tech Industry		—		100.00		100.00		—		100.00		100.00	USA
POSCO DAEWOO INDIA PVT., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	India
POSCO(Dalian) IT Center Development Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	China
PT. POSCO E&C INDONESIA	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Indonesia
HUME COAL PTY LTD	Raw material manufacturing		—		100.00		100.00		—		100.00		100.00	Australia
Brazil Sao Paulo Steel Processing Center	Steel manufacturing and sales		—		76.00		76.00		—		76.00		76.00	Brazil
DAESAN (CAMBODIA) Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Cambodia
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	Construction		—		100.00		100.00		—		100.00		100.00	Brazil
POSCO ASSAN TST STEEL INDUSTRY	Steel manufacturing and sales		60.00		10.00		70.00		60.00		10.00		70.00	Turkey
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Hong Kong
Zhangjiagang Pohang Refractories Co., Ltd. (*1)	Refractory materials sales & furnace maintenance		—		—		—		—		51.00		51.00	China
Golden Lace DAEWOO Company Limited	Rice processing		—		—		—		—		60.00		60.00	Myanmar
POSCO RU Limited Liability Company	Trade and business development		—		—		—		100.00		—		100.00	Russia
POSCO DAEWOO UKRAINE LLC	Grain sales		—		—		—		—		100.00		100.00	Ukraine
KIS Devonian Canada Corporation	Petroleum gas extraction		—		—		—		—		100.00		100.00	Canada
POSEC Hawaii, Inc.	Real estate Industry		—		100.00		100.00		—		—		—	USA
POSCO India Delhi Steel Processing Center Private Limited	Steel manufacturing and sales		66.40		10.00		76.40		—		—		—	India
USA-SRDC	Scrap sales		—		100.00		100.00		—		—		—	USA
POSCO-Vietnam Processing Center Co., Ltd.	Steel manufacturing and sales		87.07		4.98		92.05		—		—		—	Vietnam
POSCO MAPC SA DE CV	Automotive steel sheet manufacturing and sales		80.00		20.00		100.00		—		—		—	Mexico
Yingkou Puxiang Trade Co.,Ltd.	Refractory quality test & import and export		—		100.00		100.00		—		—		—	China
SANTOS CMI Guatemala S.A.	Construction and engineering service		—		100.00		100.00		—		—		—	Guatemala
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd.	Steel manufacturing and sales		100.00		—		100.00		—		—		—	India
COINSA INGENIERIA Y PETROQUIMICA S.R.L	Construction		—		50.00		50.00		—		—		—	Bolivia
POSCO VIETNAM HOLDINGS CO., LTD	Holding company		79.28		20.72		100.00		—		—		—	Vietnam
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation) (*2)	Resources development		—		100.00		100.00		—		—		—	Canada
Chongqing POSCO CISL Automotive Steel Co., Ltd.	Automotive steel sheet manufacturing and sales		51.00		—		51.00		—		—		—	China
POSCO YongXin Rare Earth Metal Co., Ltd.	Magnet material manufacturing and sales		—		51.60		51.60		—		—		—	China
PT. POSCO MTECH INDONESIA	Steelmaking materials manufacturing and sales		—		99.98		99.98		—		—		—	Indonesia
POSCO (Zhangjiagang) STS Processing Center Co., Ltd	Steel manufacturing and sales		—		100.00		100.00		—		—		—	China
EPC EQUITIES LLP	Engineering, procurement and construction		—		80.00		80.00		—		—		—	England
SANTOS CMI CONSTRUCTION TRADING LLP	Engineering, procurement and construction		—		99.90		99.90		—		—		—	England
SANTOS CMI INC. USA	Engineering, procurement and construction		—		100.00		100.00		—		—		—	USA
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA	Engineering, procurement and construction		—		99.98		99.98		—		—		—	Brazil
SANTOS CMI PERU S.A.	Engineering, procurement and construction		—		99.99		99.99		—		—		—	Peru
SANTOS CMI CONSTRUCCIONES S.A.	Engineering, procurement and construction		—		100.00		100.00		—		—		—	Uruguay
GENTECH INTERNATIONAL INC.	Engineering, procurement and construction		—		90.00		90.00		—		—		—	Panama
SANTOS CMI S.A.	Engineering, procurement and construction		—		80.00		80.00		—		—		—	Ecuador
SANTOS CMI CONSTRUCCIONES DE CHILE S.A.	Engineering, procurement and construction		—		99.00		99.00		—		—		—	Chile
COMPANIA DE AUTOMATIZACION &CONTROL, GENESYS S.A.	Engineering, procurement and construction		—		90.00		90.00		—		—		—	Ecuador
POSCO Electrical Steel India Private Limited	Electrical steel manufacturing and sales		100.00		—		100.00		—		—		—	India

(*1) Reclassified to subsidiary from associate during the year ended December 31, 2017.

(*2) Reclassified to joint venture from subsidiary during the year ended December 31, 2017.

The equity of controlling company increased by ￦8,650 million (POSCO Processing & Service and others) and ￦16,288 million (POSCO DAEWOO Corporation, POSMATE and others) in 2016 and 2017, respectively, as a result of changes in the Company’s ownership interests in subsidiaries that did not result in a loss of control.

Cash dividends paid to POSCO by subsidiaries in 2015, 2016 and 2017 amounted to ￦437,194 million, ￦75,830 million and ￦70,087 million, respectively.

As of December 31, 2017, there are no restrictions on the ability of subsidiaries to transfer funds to the controlling company, such as in the form of cash dividends, repayment of loans or payment of advances.

(c) Details of non-controlling interest as of and for the years ended December 31, 2015, 2016 and 2017 are as follows:

1) December 31, 2015

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	3,930,857			441,999			360,812			5,115,325			590,460			9,648,917			20,088,370
Non-current assets		4,777,482			3,363,935			248,549			1,756,367			3,333,351			7,776,264			21,255,948
Current liabilities		(3,568,714	)		(1,004,002	)		(106,167	)		(3,125,697	)		(663,945	)		(9,692,004	)		(18,160,529	)
Non-current liabilities		(1,941,909	)		(2,315,554	)		(5,405	)		(768,529	)		(2,420,547	)		(2,567,980	)		(10,019,924	)
Equity		3,197,716			486,378			497,789			2,977,466			839,319			5,165,197			13,163,865
Non-controlling interests		1,269,096			145,913			199,116			1,405,391			535,878			1,182,137			4,737,531
Sales		16,890,723			1,227,266			1,175,272			6,866,802			1,909,919			25,784,254			53,854,236
Profit (loss) for the period		79,092			(398,438	)		35,516			108,895			15,831			(835,389	)		(994,493	)
Profit (loss) attributable to non-controlling interests		31,390			(119,531	)		14,206			51,399			1,738			(247,106	)		(267,904	)
Cash flows from operating activities		433,493			(13,595	)		19,921			434,257			6,075			(72,371	)		807,780
Cash flows from investing activities		(74,644	)		(8,994	)		25,318			21,075			(20,980	)		(110,712	)		(168,937	)
Cash flows from financing activities (before dividends to non-controlling interest)		(340,532	)		18,886			66			69,615			11,572			289,715			49,322
Dividend to non-controlling interest		(22,597	)		—			(4,135	)		(703	)		(24,125	)		(145,582	)		(197,142	)
Effect of exchange rate fluctuation on cash held		430			83			—			819			—			3,502			4,834
Net increase (decrease) in cash and cash equivalents		(3,850	)		(3,620	)		41,170			525,063			(27,458	)		(35,448	)		495,857

2) December 31, 2016

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	4,038,313			460,376			397,370			5,163,436			713,039			9,696,140			20,468,674
Non-current assets		4,510,085			3,304,292			243,401			1,710,398			3,038,665			7,749,277			20,556,118
Current liabilities		(3,662,811	)		(1,120,077	)		(109,016	)		(3,284,090	)		(937,668	)		(9,669,053	)		(18,782,715	)
Non-current liabilities		(1,681,182	)		(2,337,612	)		(2,337	)		(855,791	)		(2,172,226	)		(2,856,498	)		(9,905,646	)
Equity		3,204,405			306,979			529,418			2,733,953			641,810			4,919,866			12,336,431
Non-controlling interests		1,271,750			92,094			211,767			1,290,450			514,200			945,962			4,326,223
Sales		15,417,550			1,244,711			1,076,455			5,352,395			1,657,890			23,251,563			48,000,564
Profit (loss) for the period		113,832			(187,151	)		41,829			(760,187	)		(130,809	)		(461,034	)		(1,383,520	)
Profit (loss) attributable to non-controlling interests		45,177			(56,145	)		16,732			(358,815	)		(14,357	)		(312,297	)		(679,705	)
Cash flows from operating activities		337,338			45,672			30,295			(211,182	)		18,107			53,050			273,280
Cash flows from investing activities		(35,054	)		(8,804	)		(42,021	)		(102,939	)		(1,047	)		(253,206	)		(443,071	)
Cash flows from financing activities (before dividends to non-controlling interest)		(295,226	)		(36,286	)		(1,250	)		(20,953	)		(2,875	)		204,797			(151,793	)
Dividend to non-controlling interest		(22,597	)		—			(4,726	)		(14,800	)		(24,378	)		(7,349	)		(73,850	)
Effect of exchange rate fluctuation on cash held		10			67			1			760			—			1,687			2,525
Net increase (decrease) in cash and cash equivalents		(15,529	)		649			(17,701	)		(349,114	)		(10,193	)		(1,021	)		(392,909	)

3) December 31, 2017

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	4,483,544			557,041			441,325			4,878,251			1,054,538			8,579,813			19,994,512
Non-current assets		4,590,394			2,771,504			316,724			2,444,616			2,859,824			6,676,559			19,659,621
Current liabilities		(4,221,443	)		(1,237,255	)		(145,649	)		(3,896,680	)		(785,462	)		(8,313,902	)		(18,600,391	)
Non-current liabilities		(1,549,013	)		(1,933,247	)		(970	)		(833,403	)		(2,200,065	)		(2,048,454	)		(8,565,152	)
Equity		3,303,482			158,043			611,430			2,592,784			928,835			4,894,016			12,488,590
Non-controlling interests		1,224,303			47,413			244,572			1,223,816			762,390			974,941			4,477,435
Sales		20,891,526			1,635,837			1,163,918			5,794,532			1,578,026			23,547,072			54,610,911
Profit (loss) for the period		115,321			(117,729	)		101,019			169,011			70,795			258,053			596,470
Profit (loss) attributable to non-controlling interests		42,739			(35,318	)		40,408			79,775			7,770			39,605			174,979
Cash flows from operating activities		128,875			(27,817	)		20,042			(84,840	)		30,295			140,418			206,973
Cash flows from investing activities		(86,365	)		(5,502	)		(18,699	)		(171,924	)		(2,792	)		(63,621	)		(348,903	)
Cash flows from financing activities (before dividends to non-controlling interest)		(19,295	)		31,782			8			150,801			220,317			(38,090	)		345,523
Dividend to non-controlling interest		(22,597	)		—			(7,088	)		—			(24,183	)		(12,777	)		(66,645	)
Effect of exchange rate fluctuation on cash held		(459	)		(147	)		(6	)		(3,541	)		—			(15,532	)		(19,685	)
Net increase (decrease) in cash and cash equivalents		159			(1,684	)		(5,743	)		(109,504	)		223,637			10,398			117,263

(d) Details of associates and joint ventures

1) Associates

Details of associates as of December 31, 2016 and 2017 are as follows:

		Ownership (%)
Investee	Category of business	2016		2017		Region
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	Investment in new technologies		29.37		31.14		Seoul
POSCO PLANTEC Co., Ltd. (*2)	Construction of industrial plant		73.94		73.94		Ulsan
SNNC	Raw material manufacturing and sales		49.00		49.00		Gwangyang
QSONE Co.,Ltd.	Real estate rental and facility management		50.00		50.00		Seoul
Chun-cheon Energy Co., Ltd	Electricity generation		29.90		45.67		Chuncheon
Incheon-Gimpo Expressway Co., Ltd. (*1)	Construction		20.04		18.26		Anyang
BLUE OCEAN Private Equity Fund	Private equity financial		27.52		27.52		Seoul
UITrans LRT Co., Ltd.	Transporting		38.19		38.19		Seoul
Keystone NO. 1. Private Equity Fund	Private equity financial		40.45		40.45		Seoul
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd	Real estate development		29.53		29.53		Chungju
Daesung Steel (*1)	Steel sales		17.54		17.54		Busan
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund (*1)	Investment in new technologies		12.50		12.50		Seoul
KONES, Corp.	Technical service		41.67		41.67		Gyeongju
Gale International Korea, LLC	Real estate rental		29.90		29.90		Seoul
Pohang Techno Valley PFV Corporation (*3)	Real estate development, supply and rental		30.28		57.39		Pohang
Gunggi Green Energy (*1)	Electricity generation		19.00		19.00		Hwaseong
Pohang Special Welding Co.,Ltd.	Welding material and tools manufacturing and sales		50.00		50.00		Pohang
KC Chemicals CORP (*1)	Machinery manufacturing		19.00		19.00		Hwaseong
Posco-IDV Growth Ladder IP Fund (*1)	Investment in new technologies		17.86		17.86		Seoul
DAEHO GLOBAL MANAGEMENT CO., LTD.	Investment advisory service		35.82		35.82		Pohang
Clean Gimpo Co., Ltd.	Construction		29.58		29.58		Gimpo
Postech Early Stage Fund (*1)	Investment in new technologies		10.00		10.00		Pohang
POSCO Energy Valley Fund	Investment in new technologies		20.00		20.00		Pohang
Pureun Tongyeong Enviro Co., Ltd.	Sewerage treatment		20.40		20.40		Tongyeong
Posgreen Co., Ltd. (*1)	Lime and plaster manufacturing		19.00		19.00		Gwangyang
Pohang E&E Co,. Ltd.	Investment in waste energy		30.00		30.00		Pohang
POSTECH Social Enterprise Fund (*1)	Investment in new technologies		9.17		9.17		Seoul
Applied Science Corp.	Machinery manufacturing		24.88		23.87		Paju
Noeul Green Energy (*1)	Electricity generation		10.00		10.00		Seoul
Pohang Techno Valley AMC	Construction		29.50		29.50		Pohang
New Songdo International City Development, LLC	Real estate rental		29.90		29.90		Seoul
Mokpo Deayang Industrial Corporation	Real estate development and rental		27.40		27.40		Mokpo
Clean Iksan Co., Ltd.	Construction		23.50		23.50		Iksan
Innovalley Co., Ltd.	Real estate development		28.77		28.77		Yongin
Pure Gimpo Co., Ltd.	Construction		28.79		28.79		Seoul
Garolim Tidal Power Plant Co.,Ltd	Tidal power plant construction and management		32.13		32.13		Seosan
2016 PoscoPlutus New Technology Investment Fund	Investment in new technologies		25.17		25.17		Seoul
Hyundai Invest Guggenheim CLO Private Special Asset Investment Trust II	Investment in new technologies		38.47		38.47		Seoul
PoscoPlutus Bio Fund (*1)	Investment in new technologies		11.97		11.97		Seoul
PoscoPlutus Project Fund (*1)	Investment in new technologies		11.91		11.91		Seoul
Posco Agrifood Export Investment Fund	Investment in new technologies		30.00		30.00		Seoul
PoscoPlutus Project II Investment Fund (*1)	Investment in new technologies		0.61		0.61		Seoul
Posco Culture Contents Fund	Investment in new technologies		31.67		31.67		Seoul
PCC Centroid 1st Fund (*4)	Investment in new technologies		—		24.10		Seoul
PCC Amberstone Private Equity Fund I (*1,4)	Investment in new technologies		—		9.71		Seoul
POSCO Advanced Technical Staff Fund (*1,4)	Investment in new technologies		—		15.87		Seoul
POSCO 4th Industrial Revolution Fund (*4)	Investment in new technologies		—		20.00		Seoul
METAPOLIS Co.,Ltd. (*6)	Multiplex development		40.05		—		Hwaseong
Universal Studios Resort Asset Management Corporation (*5)	Real estate services		26.17		—		Seoul
Busan-Gimhae Light Rail Transit Co., Ltd. (*5)	Transporting		25.00		—		Gimhae
[Foreign]
South-East Asia Gas Pipeline Company Ltd.	Pipeline construction and management		25.04		25.04		Myanmar
AES-VCM Mong Duong Power Company Limited	Electricity generation		30.00		30.00		Vietnam
7623704 Canada Inc. (*1)	Investments management		10.40		10.40		Canada
Eureka Moly LLC	Raw material manufacturing and sales		20.00		20.00		USA
AMCI (WA) PTY LTD	Iron ore sales & mine development		49.00		49.00		Australia
Nickel Mining Company SAS	Raw material manufacturing and sales		49.00		49.00		New Caledonia
NCR LLC	Coal sales		29.41		29.41		Canada
KOREA LNG LTD.	Gas production and sales		20.00		20.00		England
PT. Batutua Tembaga Raya	Raw material manufacturing and sales		24.10		22.00		Indonesia
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd	Tinplate manufacturing and sales		34.00		34.00		China
PT. Wampu Electric Power	Construction and civil engineering		20.00		20.00		Indonesia
POSCO SeAH Steel Wire(Nantong) Co., Ltd.	Steel processing and sales		25.00		25.00		China
VSC POSCO Steel Corporation	Steel processing and sales		50.00		50.00		Vietnam
IMFA ALLOYS FINLEASE LTD	Raw material manufacturing and sales		24.00		24.00		India
General Medicines Company Ltd.	Medicine manufacturing and sales		33.00		33.00		Sudan
PT.INDONESIA POS CHEMTECH CHOSUN Ref	Refractory manufacturing and sales		30.19		30.19		Indonesia
POSK(Pinghu) Steel Processing Center Co., Ltd.	Steel processing and sales		20.00		20.00		China
SHANGHAI LANSHENG DAEWOO CORP.	Trading		49.00		49.00		China
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd	Steel processing and sales		25.00		25.00		China
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.	Trading		49.00		49.00		China
PT. Tanggamus Electric Power (*1)	Construction and civil engineering		17.50		17.50		Indonesia
NS-Thainox Auto Co., Ltd.	Steel manufacturing and sales		49.00		49.00		Vietnam
Hamparan Mulya	Resource development		45.00		45.00		Indonesia
Sebang Steel	Scrap sales		49.00		49.00		Japan
GLOBAL KOMSCO Daewoo LLC	Cotton celluloid manufacturing and sales		35.00		35.00		Uzbekistan
POSCO-Poggenamp Electrical Steel Pvt. Ltd.	Steel manufacturing and sales		26.00		26.00		India
KIRIN VIETNAM CO., LTD (*1)	Panel manufacturing		19.00		19.00		Vietnam
POSCHROME (PROPRIETARY) LIMITED	Raw material manufacturing and sales		50.00		50.00		South Africa
CAML RESOURCES PTY LTD	Raw material manufacturing and sales		33.34		33.34		Australia
KG Power(M) SDN. BHD	Energy & resource development		20.00		20.00		Malaysia
LI3 ENERGY INC	Energy & resource development		26.06		26.06		Peru
LLP POSUK Titanium	Titanium manufacturing and sales		36.83		36.83	Kazakhstan
POS-SeAH Steel Wire (Thailand) Co., Ltd.	Steel manufacturing and sales		25.00		25.00	Thailand
Jupiter Mines Limited (*1)	Energy & resource development		17.08		17.06	Australia
KRAKATAU POS-CHEM DONG-SUH CHEMICAL (*1)	Chemical by-product manufacturing and sales		19.00		19.00	Indonesia
SAMHWAN VINA CO., LTD (*1,4)	Steel manufacturing and sales		—		19.00	Vietnam
JB CLARK HILLS (*4)	Construction		—		25.00	Philippines
Saudi-Korean Company for Maintenance Properties Management LLC (*1,4)	Building management		—		19.00	Saudi Arabia
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. (*5)	Highway construction and new town development		50.00		—	Vietnam
Fifth Combined Heat and Power Plant LLC (*5)	Thermal power generation		30.00		—	Mongolia
Chongqing CISL High Strength Cold Rolling Steel Co., Ltd. (*6)	Steel manufacturing and sales		10.00		—	China

(*1) Considering the composition of board of directors, the Company is able to exercise significant influence even though the Company’s percentage of ownership is below 20%.

(*2) On September 30, 2015, in order to improve its financial standing and normalize operation, the associates reached a workout agreement with its Creditor Financial Institutions Committee. As a result, the Company lost its control and classified its shares as investment in associate.

(*3) Considering the composition of board of directors, the Company does not have control and classified its shares as investment in an associate, even though the Company’s percentage of ownership is over 50%.

(*4) These associates were newly established or acquired in 2017.

(*5) Excluded from associates due to the disposal of shares during the year ended December 31, 2017.

(*6) Excluded from associates due to loss of significant influence during the year ended December 31, 2017.

2) Joint ventures

Details of joint ventures as of December 31, 2016 and 2017 are as follows:

		Ownership (%)
Investee	Category of business	2016		2017		Region
[Domestic]
POSCO MITSUBISHI CARBON TECHNOLOGY	Steel processing and sales		60.00		60.00		Gwangyang
POSCO-SGI Falcon Pharmaceutic Bio Secondary Fund 1 (*1)	Investment in new technologies		—		24.55		Seoul
POSCO-KB Shipbuilding Restructuring Fund (*1)	Investment in new technologies		—		18.75		Seoul
POSCO-NSC Venture Fund (*1)	Investment in new technologies		—		16.67		Seoul
PCC L&K New Technology 1st Fund (*1)	Investment in new technologies		—		10.00		Seoul
PoscoPlutus Project 3rd Investment Fund (*1)	Investment in new technologies		—		5.96		Seoul
[Foreign]
Roy Hill Holdings Pty Ltd	Energy & resource development		12.50		12.50		Australia
POSCO-NPS Niobium LLC	Mine development		50.00		50.00		USA
CSP — Compania Siderurgica do Pecem	Steel manufacturing and sales		20.00		20.00		Brazil
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.	Steel processing and sales		25.00		25.00		China
KOBRASCO	Steel materials manufacturing and sales		50.00		50.00		Brazil
DMSA/AMSA	Energy & resource development		4.00		4.00		Madagascar
PT. POSMI Steel Indonesia	Steel processing and sales		36.69		36.69		Indonesia
VNS-DAEWOO Co., Ltd.	Steel scrap processing and sale		40.00		40.00		Vietnam
YULCHON MEXICO S.A. DE C.V.	Tube for automobile manufacturing		19.00		19.00		Mexico
POSCO-SAMSUNG-Slovakia Processing Center	Steel processing and sales		30.00		30.00		Slovakia
United Spiral Pipe, LLC	Material manufacturing and sales		35.00		35.00		USA
Korea Siberia Wood CJSC	Forest resource development		50.00		50.00		Russia
Hyunson Engineering & Construction HYENCO	Construction		4.90		4.90		Algeria
USS-POSCO Industries	Cold-rolled steel manufacturing and sales		50.00		50.00		USA
POSCO E&C Saudi Arabia	Civil engineering and construction		40.00		40.00		Saudi Arabia
Pos-Austem Suzhou Automotive Co., Ltd (*1)	Automotive parts manufacturing		—		19.90		China
POS-AUSTEM YANTAI AUTOMOTIVE CO., LTD (*1)	Automotive parts manufacturing		—		11.06		China
POS-AUSTEM WUHAN AUTOMOTIVE CO., LTD (*1)	Automotive parts manufacturing		—		13.00		China
POS-InfraAuto (Suzhou) Co., Ltd (*1)	Automotive parts manufacturing		—		16.20		China
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation) (*2)	Energy & resource development		—		35.00		Canada
Henan Tsingpu Ferro Alloy Co., Ltd. (*3)	Raw material manufacturing and sales		49.00		—		China
Zhangjiagang Pohang Refractories Co., Ltd. (*4)	Refractory manufacturing		50.00		—		China

(*1) These joint ventures were newly established in 2017.

(*2) Reclassified to joint venture from subsidiary during the year ended December 31, 2017.

(*3) Excluded from joint ventures due to the disposal of shares during the year ended December 31, 2017.

(*4) Reclassified to subsidiary from joint venture during the year ended December 31, 2017.

(e) Newly included subsidiaries

Consolidated subsidiaries acquired or newly established during the year ended December 31, 2017 are as follows:

Company	Date of addition	Ownership (%)		Reason
POSCO RU Limited Liability Company	January 2017		100.00	New establishment
Golden Lace DAEWOO Company Limited	April 2017		100.00	New establishment
POSCO Research & Technology	June 2017		100.00	New establishment
POSCO DAEWOO UKRAINE LLC	July 2017		100.00	New establishment
Zhangjiagang Pohang Refractories Co., Ltd.	July 2017		51.00	Reclassification from associate
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2	October 2017		97.47	Acquisition of control
Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust	October 2017		99.01	Acquisition of control
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5	November 2017		99.67	Acquisition of control
KIS Devonian Canada Corporation	December 2017		100.00	Acquisition of control

(f) Excluded subsidiaries

Subsidiaries that were excluded from consolidation during the year ended December 31, 2017 are as follows:

Company	Date of exclusion	Reason
POSCO MAPC SA DE CV	January 2017	Merged into POSCO MPPC S.A. de C.V.
POSCO (Zhangjiagang) STS Processing Center Co., Ltd	January 2017	Merged into Zhangjiagang Pohang Stainless Steel Co., Ltd.
POSCO Engineering CO., Ltd	February 2017	Merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD.
POSCO YongXin Rare Earth Metal Co., Ltd.	March 2017	Disposal
SANTOS CMI S.A.	March 2017	Disposal
EPC EQUITIES LLP	March 2017	Disposal
SANTOS CMI Guatemala S.A.	March 2017	Disposal
COINSA INGENIERIA Y PETROQUIMICA S.R.L	March 2017	Disposal
SANTOS CMI CONSTRUCTION TRADING LLP	March 2017	Disposal
SANTOS CMI INC. USA	March 2017	Disposal
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA	March 2017	Disposal
SANTOS CMI PERU S.A.	March 2017	Disposal
SANTOS CMI CONSTRUCCIONES S.A.	March 2017	Disposal
GENTECH INTERNATIONAL INC.	March 2017	Disposal
SANTOS CMI CONSTRUCCIONES DE CHILE S.A.	March 2017	Disposal
COMPANIADEAUTOMATIZACION & CONTROL, GENESYS S.A.	March 2017	Disposal
POSCO Electrical Steel India Private Limited	March 2017	Merged into POSCO Maharashtra Steel Private Limited
POSEC Hawaii, Inc.	May 2017	Exclusion upon liquidation
PT. POSCO MTECH INDONESIA	May 2017	Disposal
POSCO VIETNAM HOLDINGS CO., LTD	July 2017	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
POSCO-Vietnam Processing Center Co., Ltd.	July 2017	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
Yingkou Puxiang Trade Co.,Ltd.	July 2017	Merged into Zhangjiagang Pohang Refractories Co., Ltd
Chongqing POSCO CISL Automotive Steel Co., Ltd.	September 2017	Loss of control
IT Engineering Co., Ltd.	November 2017	Disposal
POSCO India Delhi Steel Processing Center Private Limited	November 2017	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd.	November 2017	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation)	November 2017	Change in status due to a decline in stake
USA-SRDC	December 2017	Exclusion upon liquidation

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Statement of Compliance and Basis of Presentation

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Statement of Compliance and Basis of Presentation

2. Statement of Compliance and Basis of Presentation

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”), as issued by the International Accounting Standards Board.

The consolidated financial statements were authorized for issue by the authorized directors on February 28, 2018.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the statement of financial position, as described in the accounting policy below.

(a) Derivatives instruments are measured at fair value

(b) Financial instruments at fair value through profit or loss

(c) Available-for-sale financial assets are measured at fair value

(d) Defined benefit liabilities are measured at the present value of the defined benefit obligation less the fair value of the plan assets

Functional and presentation currency

The financial statements of POSCO and subsidiaries are prepared in functional currency of the respective operation. These consolidated financial statements are presented in Korean Won, which is POSCO’s functional currency which is the currency of the primary economic environment in which POSCO operates.

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period prospectively.

(a) Judgments

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

• Note 1 — Subsidiaries, associates and joint ventures

• Note 10 — Assets held for sale

• Note 11 — Investments in associates and joint ventures

• Note 12 — Joint operations

• Note 25 — Hybrid bonds

(b) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next fiscal year is included in the following notes:

• Note 11 — Investments in associates and joint ventures

• Note 15 — Goodwill and other intangible assets, net

• Note 20 — Provisions

• Note 21 — Employee benefits

• Note 29 — Construction contracts

• Note 35 — Income taxes

• Note 38 — Commitments and contingencies

(c) Measurement of fair value

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.

Significant valuation issues are reported to the Company’s Audit Committee.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• Level 1 — unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 — inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly or indirectly.

• Level 3 — inputs for the assets or liability that are not based on observable market data.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Information about the assumptions made in measuring fair values is included in the following note:

• Note 23 — Financial instruments

Changes in Accounting Policies

Except for the application of the amendments to standards for the first time for the annual period beginning on January 1, 2017, as described below, the accounting policies have been consistently applied by the Company for the periods presented.

(a) Amendments to IAS No. 7 “Statement of Cash Flows”

For the year beginning on January 1, 2017, the Company applied the amendments to IAS No. 7 “Statement of Cash Flows”. IAS No. 7 requires that changes in liabilities related to the cash flows that were classified as a financing activity in the statement of cash flows or will be classified as a financing activity in the future should be disclosed as follows:

• Changes from financing cash flows

• Changes arising from obtaining or losing control of subsidiaries or other businesses

• The effect of changes in foreign exchange rates

• Changes in fair values

• Other changes

IAS No. 7 does not require the disclosure of comparative information of prior period. The related disclosures are included in note 39.

(b) Amendments to IAS No. 12 “Income Taxes”

For the year beginning on January 1, 2017, the Company applied the amendments to IAS No. 12 “Income Taxes”. In accordance with IAS No. 12, in the case of debt instruments measured at fair value, deferred tax accounting treatment is clarified. The difference between the carrying amount and taxable base amount of the debt liabilities is considered as temporary differences, regardless of the expected recovery method. When reviewing the recoverability of deferred tax assets, the estimated of probable future taxable income may include the recovery of some of the Company’s assets for more than their carrying amount if there is sufficient evidence that it is probable that the Company will recover the asset for more than its carrying amount. In addition, the estimated of probable future taxable income are determined as the amount before considering the deductible effect from reversal of the deductible temporary differences.

The Company believes that the effect of the amendments to the consolidated financial statements is not significant. Therefore, the Company has not retrospectively applied the amendments in accordance with the transitional requirements.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

The significant accounting policies applied by the Company in preparation of its consolidated financial statements are included below. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, except for those as disclosed in note 2.

Basis of consolidation

(a) Business combinations

The Company accounts for business combinations using the acquisition method when control is transferred to the Company.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-combination service.

(b) Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(c) Subsidiaries

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(d) Loss of control

When the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(e) Interests in equity-accounted investees

The Company’s interests in equity-control investees comprise interests in associates and joint ventures. Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Company has joint control, whereby the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees, until the date on which significant influence or joint control ceases.

(f) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Foreign currency transactions and translation

(a) Foreign currency transactions

Foreign currency transactions are initially recorded using the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of each reporting period, foreign currency monetary items are translated using the closing rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the original transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date fair value was initially determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in profit or loss in the period in which they arise. When gains or losses on non-monetary items are recognized in other comprehensive income, exchange components of those gains or losses are recognized in other comprehensive income. Conversely, when gains or losses on non-monetary items are recognized in profit or loss, exchange components of those gains or losses are recognized in profit or loss.

(b) Foreign operations

If the presentation currency of the Company is different from a foreign operation’s functional currency, the financial statements of the foreign operation are translated into the presentation currency using the following methods:

The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at the closing rate.

When a foreign operation is disposed of, the relevant amount in the translation is transferred to profit or loss as part of the profit or loss on disposal. On the partial disposal of a subsidiary that includes a foreign operation, the relevant proportion of such cumulative amount is reattributed to non-controlling interest. In any other partial disposal of a foreign operation, the relevant proportion is reclassified to profit or loss.

Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other comprehensive income in the translation reserve.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term investments in highly liquid securities that are readily convertible to known amounts of cash with maturities of three months or less from the acquisition date and which are subject to an insignificant risk of changes in value. Equity investments are excluded from cash and cash equivalents.

Non-derivative financial assets

The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. The Company recognizes financial assets in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Upon initial recognition, non-derivative financial assets are measured at their fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the asset’s acquisition or issuance.

(a) Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss if they are held for trading or designated as such upon initial recognition. Upon initial recognition, transaction costs are recognized in profit or loss when incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

(b) Held-to-maturity financial assets

A non-derivative financial asset with a fixed or determinable payment and fixed maturity, for which the Company has the positive intention and ability to hold to maturity, is classified as held-to-maturity. Subsequent to initial recognition, held-to-maturityfinancial assets are measured at amortized cost using the effective interest rate method.

(c) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method unless the effect of discounting is immaterial.

(d) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity financial assets or loans and receivables. Subsequent to initial recognition, they are measured at fair value, with changes in fair value, net of any tax effect, recorded in other comprehensive income in equity. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost. When a financial asset is derecognized or impairment losses are recognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Dividends on an available-for-sale equity instrument are recognized in profit or loss when the Company’s right to receive payment is established.

(e) Derecognition of non-derivative financial assets

The Company derecognizes non-derivative financial assets when the contractual rights to the cash flows from the financial asset expire, or the Company transfers the rights to receive the contractual cash flows from the financial asset as well as substantially all the risks and rewards of ownership of the financial asset. Any interest in a transferred financial asset that is created or retained by the Company is recognized as a separate asset or liability.

If the Company retains substantially all the risks and rewards of ownership of the transferred financial assets, the Company continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.

(f) Offsetting a financial asset and a financial liability

Financial assets and financial liabilities are offset and the net amount is presented in the consolidated statement of financial position only when the Company currently has a legally enforceable right to offset the recognized amounts, and there is the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

Inventories

Inventory costs, except materials-in-transit in which costs are determined by using specific identification method, are determined by using the moving-weighted average method. The cost of inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The allocation of fixed production overheads to the costs of finished goods or work in progress are based on the normal capacity of the production facilities.

Inventories are measured at the lower of cost or net realizable value. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories arising from an increase in net realizable value is recognized as a reduction in the amount of inventories recognized as a cost of goods sold in the period in which the reversal occurs.

The carrying amount of those inventories is recognized as cost of goods sold in the period in which the related revenue is recognized.

Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. In order to be classified as held for sale, the assets or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable. The assets or disposal groups that are classified as non-current assets held for sale are measured at the lower of their carrying amount and fair value less cost to sell.

The Company recognizes an impairment loss for any initial or subsequent write-down of an asset or disposal group to fair value less costs to sell, and a gain for any subsequent increase in fair value less costs to sell, up to the cumulative impairment loss previously recognized in accordance with IAS No. 36 “Impairment of Assets”.

A non-current asset that is classified as held for sale or part of a disposal group classified as held for sale is not depreciated (or amortized).

Investment property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment property is measured initially at its cost. Transaction costs are included in the initial measurement. Subsequently, investment property is carried at depreciated cost less any accumulated impairment losses.

Subsequent costs are recognized in the carrying amount of investment property at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate.

Property, plant and equipment

Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and any accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and, when the Company has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The cost of replacing a part of an item is recognized in the carrying amount of the item of property, plant and equipment, if the following recognition criteria are met:

(a) it is probable that future economic benefits associated with the item will flow to the Company, and

(b) the cost can be measured reliably.

The carrying amount of the replaced part is derecognized at the time the replacement part is recognized. The costs of the day-to-day servicing of the item are recognized in profit or loss as incurred.

Items of property, plant and equipment are depreciated from the date they are available for use or, in respect of self-constructed assets, from the date that the asset is completed and ready for use. Other than land, the costs of an asset less its estimated residual value are depreciated. Depreciation of property, plant and equipment is recognized in profit or loss on a straight-line basis, which most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset, over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognized.

The estimated useful lives for the current and comparative periods are as follows:

Buildings	3-50 years
Structures	4-50 years
Machinery and equipment	4-25 years
Vehicles	3-20 years
Tools	3-10 years
Furniture and fixtures	3-20 years
Lease assets	3-30 years
Bearer plants	20 years

The estimated residual value, useful lives and the depreciation method are reviewed at least at the end of each reporting period and, if expectations differ from previous estimates, the changes are accounted for as changes in accounting estimates.

Borrowing costs

The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale. Financial assets and inventories that are manufactured or otherwise produced over a short period of time are not qualifying assets. Assets that are ready for their intended use or sale when acquired are not qualifying assets.

To the extent that the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Company immediately recognizes other borrowing costs as an expense. To the extent that the Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company shall determine the amount of borrowing costs eligible for capitalization by applying a capitalization rate to the expenditures on that asset. The capitalization rate shall be the weighted average of the borrowing costs applicable to the borrowings of the Company that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs that the Company capitalizes during a period shall not exceed the amount of borrowing costs incurred during that period.

Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses.

Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which club memberships are expected to be available for use, this intangible asset is determined as having an indefinite useful life and not amortized.

Intellectual property rights	4-25 years
Development costs	3-5 years
Port facilities usage rights	4-75 years
Other intangible assets	2-15 years

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the end of each reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the end of each reporting period to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. Changes are accounted for as changes in accounting estimates.

Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in profit or loss as incurred. Development expenditures are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditures are recognized in profit or loss as incurred.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

Exploration for and evaluation of mineral resources

POSCO is engaged in exploration projects for mineral resources through subsidiaries, associates and joint ventures or other contractual arrangements. Expenditures related to the development of mineral resources are recognized as exploration or development intangible assets. The nature of these intangible assets are as follows:

(a) Exploration and evaluation assets

Exploration and evaluation assets consist of expenditures for topographical studies, geophysical studies and trenching. These assets are reclassified as development assets when it is proved that the exploration has identified commercially viable mineral deposit.

(b) Development assets

When proved reserves are determined and development is sanctioned, development expenditures incurred are capitalized. These expenditures include evaluation of oil fields, construction of oil/gas wells, drilling for viability and others. On completion of development and inception of extraction for commercial production of developed proved reserves, the development assets are reclassified as either property, plant and equipment or as intellectual property rights (mining rights) under intangible assets based on the nature of the capitalized expenditure.

The respective property, plant and equipment and intellectual property (mining rights) are each depreciated and amortized based on proved reserves on a unit of production basis.

Government grants

Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grant’s conditions and that the grant will be received.

(a) Grants related to assets

Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted from the carrying amount of the assets and recognized in profit or loss on a systematic and rational basis over the life of the depreciable assets.

(b) Grants related to income

Government grants which are intended to compensate the Company for expenses incurred are deducted from the related expenses.

Leases

The Company classifies and accounts for leases as either a finance or operating lease, depending on the terms. Leases where the Company assumes substantially all of the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

(a) Finance leases

At the commencement of the lease term, the Company recognizes as finance assets and finance liabilities the lower amount of the fair value of the leased property and the present value of the minimum lease payments, each determined at the inception of the lease. Any initial direct costs are added to the amount recognized as an asset.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use on a systematic basis consistent with the depreciation policy the Company adopts for similar depreciable assets that are owned. If there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life.

(b) Operating leases

Lease obligations under operating leases are recognized as an expense on a straight-line basis over the lease term. Contingent rents are charged as expenses in the periods in which they are incurred.

(c) Determining whether an arrangement contains a lease

Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfillment of the arrangement is dependent on the use of a specific asset or assets (the asset) and the arrangement conveys a right to use the asset.

At inception or reassessment of the arrangement, management of the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If management of the Company concludes for a financial lease that it is impracticable to separate the payments reliably, the Company recognizes an asset and a liability at an amount equal to the fair value of the underlying asset that was identified as the subject of the lease. Subsequently, the liability shall be reduced as payments are made and an imputed finance charge on the liability recognized using the purchaser’s incremental borrowing rate of interest.

Impairment for financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. However, losses expected as a result of future events, regardless of likelihood, are not recognized.

Objective evidence that a financial asset or group of financial assets are impaired includes:

(a) significant financial difficulty of the issuer or obligor;

(b) a breach of contract, such as a default or delinquency in interest or principal payments;

(c) the lender, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;

(d) it becoming probable that the borrower will enter bankruptcy or other financial reorganization;

(e) the disappearance of an active market for that financial asset because of financial difficulties; or

(f) observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group.

In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

If there is objective evidence that financial assets are impaired, impairment losses are measured and recognized.

(a) Financial assets measured at amortized cost

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of its estimated future cash flows discounted at the asset’s original effective interest rate. If it is not practicable to obtain the instrument’s estimated future cash flows, impairment losses would be measured by using prices from any observable current market transactions. The Company can recognize impairment losses directly or establish a provision to cover impairment losses. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss shall be reversed either directly or by adjusting an allowance account.

(b) Financial assets carried at cost

If there is objective evidence that an impairment loss has occurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed.

(c) Available-for-sale financial assets

When a decline in the fair value of an available-for-sale financial asset has been recognized in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment even though the financial asset has not been derecognized. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognized in profit or loss.

Impairment for non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from construction contracts, employee benefits, inventories, deferred tax assets and non-current assets held for sale, are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amount to their carrying amount.

Management estimates the recoverable amount of an individual asset. If it is impossible to measure the individual recoverable amount of an asset, then management estimates the recoverable amount of cash-generating unit (“CGU”). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The Company determined that individual operating entities are CGUs.

The recoverable amount of an asset or CGU is the greater of its value-in-use and its fair value less costs to sell. The value-in-use is estimated by applying a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies arising from the goodwill acquired. Any impairment identified at the CGU level will first reduce the carrying amount of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Derivative financial instruments and hedges

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(a) Hedge accounting

The Company holds forward exchange contracts, currency swaps and commodity future contracts to manage foreign exchange risk and commodity fair value risk. The Company designated derivatives as hedging instruments to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Company formally documents the relationship between the hedging instruments and hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

① Fair value hedge

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the consolidated statement of comprehensive income.

The Company discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, or if the hedge no longer meets the criteria for hedge accounting. Any adjustment arising from gain or loss on the hedged item attributable to the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.

② Cash flow hedge

When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

(b) Embedded derivatives

Embedded derivatives are separated from the host contract and accounted for separately only if the following criteria have been met: (a) the economic characteristics and risks of the host contract and the embedded derivatives are not clearly and closely related to a separate instrument with the same terms as the embedded derivative that would meet the definition of a derivative, and (b) the hybrid (combined) instrument is not measured at fair value through profit or loss. Changes in the fair value of separable embedded derivatives from the host contract are recognized immediately in profit or loss. However, convertible rights of convertible bonds are not separated from the host contract and the compound financial instruments of bonds and convertible rights are designated and measured at fair value through profit and loss.

(c) Other derivatives

Changes in the fair value of a derivative that is not designated as a hedging instrument are recognized immediately in profit or loss.

Non-derivative financial liabilities

The Company classifies non-derivative financial liabilities into financial liabilities at fair value through profit or loss or other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities. The Company recognizes financial liabilities in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the financial liability.

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading or designated as such upon initial recognition. Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the acquisition are recognized in profit or loss as incurred.

(b) Other financial liabilities

Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as other financial liabilities. At the date of initial recognition, other financial liabilities are measured at fair value minus transaction costs that are directly attributable to the acquisition. Subsequent to initial recognition, other financial liabilities are measured at amortized cost using the effective interest method. The Company derecognizes a financial liability from the consolidated statement of financial position when it is extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

Construction work in progress

The gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits (less recognized losses) exceed progress billings. If progress billings exceed costs incurred plus recognized profits (less recognized losses), then the gross amount due to customers for contract work is presented. Cost includes all expenditures related directly to specific projects and an allocation of fixed and variable overheads incurred in the Company’s contract activities based on normal operating capacity.

The Company recognizes advances received regarding the amount received from the ordering organization before the commencement of the construction. Also, the Company recognized trade accounts and notes receivable with respect to the amount billed to the ordering organization.

Employee benefits

(a) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service. When an employee has rendered service to the Company during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as profit or loss. If the Company has a legal or constructive obligation which can be reliably measured, the Company recognizes the amount of expected payment for profit-sharing and bonuses payable as liabilities.

(b) Other long-term employee benefits

Other long-term employee benefits include employee benefits that are settled beyond 12 months after the end of the period in which the employees render the related service, and are calculated at the present value of the amount of future benefit that employees have earned in return for their service in the current and prior periods, less the fair value of any related assets. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.

(c) Retirement benefits: Defined contribution plans

For defined contribution plans, when an employee has rendered service to the Company during a period, the Company recognizes the contribution payable to a defined contribution plan in exchange for that service as an accrued expense, after deducting any contributions already paid. If the contributions already paid exceed the contribution due for service before the end of the reporting period, the Company recognizes that excess as an asset (prepaid expense) to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

(d) Retirement benefits: Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of plan assets is deducted. The calculation is performed annually by an independent actuary using the projected unit credit method.

The discount rate is the yield at the reporting date on corporate bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from actuarial assumption changes and experiential adjustments in other comprehensive income when incurred.

When the fair value of plan assets exceeds the present value of the defined benefit obligation, the Company recognizes an asset, to the extent of the present value of the total of cumulative any economic benefits available in the form of refunds from the plan or reduction in the future contributions to the plan.

Remeasurements of net defined benefit liabilities, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments, net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss in curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

Where some or all of the expenditures required to settle a provision are expected to be reimbursed by another party, the reimbursement shall be recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

A provision for warranties is recognized when the underlying products are sold. The provision is based on historical warranty.

Regarding provision for construction warranties, warranty period starts from the completion of construction in accordance with construction contracts. If the Company has an obligation for warranties, provision for warranties which are estimated based on historical warranty data are recorded as cost of construction and provision for warranties during the construction period.

A provision for restoration regarding contamination of land is recognized in accordance with the Company’s announced Environment Policy and legal requirement as needed.

A provision is used only for expenditures for which the provision was originally recognized.

Emission Rights

The Company accounts for greenhouse gases emission right and the relevant liability as follows pursuant to the Act on Allocation and Trading of Greenhouse Gas Emission which became effective in Korea in 2015.

(a) Greenhouse Gases Emission Right

Greenhouse Gases Emission Right consists of emission allowances which are allocated from the government free of charge and those purchased from the market. The cost includes any directly attributable costs incurred during the normal course of business.

Emission rights held for the purpose of performing the obligation are classified as intangible asset and initially measured at cost and subsequently carried at cost less accumulated impairment losses. Emission rights held for short-swing profits are classified as current asset and are measured at fair value with any changes in fair value recognized as profit or loss in the respective reporting period.

The Company derecognizes an emission right asset when the emission allowance is unusable, disposed or submitted to government when the future economic benefits are no longer expected to be probable.

(b) Emission liability

Emission liability is a present obligation of submitting emission rights to the government with regard to emission of greenhouse gas. Emission liability is recognized when there is a high possibility of outflows of resources in performing the obligation and the costs required to perform the obligation are reliably estimable. Emission liability is an amount of estimated obligations for emission rights to be submitted to the government for the performing period. The emission liability is measured based on the expected quantity of emission for the performing period in excess of emission allowance in possession and the unit price for such emission rights in the market at the end of the reporting period.

Equity instruments

(a) Share capital

Common stock is classified as equity and the incremental costs arising directly attributable to the issuance of common stock less their tax effects are deducted from equity.

If the Company reacquires its own equity instruments, the amount of those instruments (“treasury shares”) are presented as a contra equity account. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of its own equity instruments. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase to equity, and the resulting surplus or deficit on the transaction is recorded in capital surplus.

(b) Hybrid Bonds

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and an equity instrument. When the Company has an unconditional right to avoid delivering cash or another financial asset to settle a contractual obligation, the instruments are classified as equity instruments.

Revenue

Revenue from the sale of goods, services provided and the use of assets is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates, which are not significant for all periods presented.

(a) Sale of goods

Revenue from the sale of goods in the ordinary course of activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. The appropriate timing for transfer of risks and rewards varies depending on the individual terms and conditions of the sales contract. For international sales, this timing depends on the type of international commercial terms of the contract.

(b) Construction contracts

Construction contracts of the Company primarily consist of contracts for the construction of plants and infrastructure facilities, and revenue recognition for different types of contracts is as follows:

When the outcome of a construction contract can be estimated reliably, contract revenue is recognized in profit or loss in proportion to the stage of completion of the contract. The stage of completion of a contract is determined based on the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Contract revenue includes the initial amount agreed in the contract plus any variation in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably.

When the outcome of a construction contract cannot be estimated reliably, the revenue is recognized only to the extent of contract costs incurred that it is probable will be recoverable. An expected loss on the construction contract is recognized as an expense immediately.

The Company has construction contracts in which control and the significant risks and rewards of ownership of the residential real estate are transferred to the buyer upon the delivery. Revenue and expenses from development and sale of these residential real estate are recognized when an individual unit of residential real estate is delivered to the buyer.

(c) Services rendered

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.

(d) Rental income

Rental income from investment property, net of lease incentives granted, is recognized in profit or loss on a straight-line basis over the term of the lease.

Finance income and finance costs

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on valuations of hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest rate method. Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established.

Finance costs comprise interest expense on borrowings and changes in the fair value of financial assets at fair value through profit or loss and loss on valuations of hedging instruments that are recognized in profit or loss. Borrowing costs are recognized in profit or loss using the effective interest rate method.

Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

The Company recognizes interest and penalties related to corporate income tax as if it is related to the income taxes, the Company applies IAS No. 12 “Income Taxes”, if it is not related to the income taxes, the Company applies IAS No. 37 “Provisions Contingent Liabilities and Contingent Assets”.

(a) Current income tax

Current income tax is the expected income tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and any adjustment to tax payable in respect of previous years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit of future periods, and non-taxable or non-deductible items from the accounting profit.

(b) Deferred income tax

The measurement of deferred income tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company recognizes a deferred income tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The Company recognizes a deferred income tax asset for deductible temporary differences arising from investments in subsidiaries, associates and joint ventures, to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized. However, deferred income tax is not recognized for the following temporary differences: taxable temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income.

The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and deferred income tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax assets and liabilities are offset only if there is a legally enforceable right to offset the related current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority and they intend to settle current income tax liabilities and assets on a net basis.

Earnings per share

Management calculates basic earnings per share (“EPS”) data for POSCO’s ordinary shares, which is presented at the end of the statement of comprehensive income. Basic EPS is calculated by dividing profit attributable to ordinary shareholders of POSCO by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Operating segments

An operating segment is a component of the Company that: a) engages in business activities from which it may earn revenues and incur expenditures, including revenues and expenses that relate to transactions with any of the Company’s other components, b) whose operating results are regularly reviewed by the Company’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Management has determined that the CODM of the Company is the CEO.

With regard to construction segment, segment profit and loss is determined in the same way that consolidated profit after tax for the period is generally determined under IFRS except that revenues and expenses from the development and sale of certain residential real estate are determined by reference to the stage of completion of the contact activity at the end of the reporting period, while in the consolidated financial statements, they are recognized when an individual unit of residential real estate is delivered to the buyer. No adjustments are made for corporate allocations to segment profit and loss. In addition, segment assets and liabilities are generally measured based on total assets and liabilities in accordance with IFRS without any adjustment for corporate allocations, except that assets and liabilities in connection with the construction and sale of residential real estate are determined by reference to the stage of completion of the contract activity at the end of each period.

For the other segments, segment profit and loss is determined the same way that consolidated net after tax profit for the period is generally determined under IFRS without any adjustment for corporate allocations. The accounting policies used by each segment are consistent with the accounting policies used in the preparation of the consolidated financial statements. Segment assets and liabilities are generally measured based on total assets and liabilities in accordance with IFRS without any adjustment for corporate allocations. Also, segment assets and liabilities are based on the separate financial statements of the entities instead of on consolidated basis.

In addition, there are varying levels of transactions amongst the reportable segments. These transactions include sales of property, plant and assets, and rendering of construction service and so on.

Segment results that are reported to the CEO include items directly attributable to a segment and items allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

New standards and interpretations not yet adopted

The Company will apply IFRS No. 9 “Financial Instruments” and IFRS No. 15 “Revenue from Contracts with Customers” for the year beginning on January 1, 2018. The Company has completed an analysis of the financial impacts resulting from adoption of new standards and the estimated effect on equity in the consolidated financial statements at the date of initial application based on available information which are summarized as follows.

	December 31, 2017			IFRS No. 9			IFRS No. 15			Date of initial application (January 1, 2018)
	(in millions of Won)
Reserves	￦	(682,556	)		(401,344	)		—			(1,083,900	)
Retained earnings		42,974,658			368,612			(71,066	)		43,272,204
Non-controlling interests		3,666,334			(19,545	)		(59,060	)		3,587,729
	￦	45,958,436			(52,277	)		(130,126	)		45,776,033

The above estimated amounts could differ from the actual impact when the Company adopts the new standards in 2018 for the following reasons.

• Changes in internal controls related to application of new standards

• Changes in the Company’s selection in accounting policy during the year ending December 31, 2018 when initial disclosure of the consolidated financial statements at the date of initial application is made

The following new standards, including IFRS No. 9 and IFRS No. 15, interpretations and amendments to existing standards have been published but are not mandatory for the Company for annual periods beginning on January 1, 2017, and the Company has not early adopted them.

(a) IFRS No. 9 “Financial Instruments”

IFRS No. 9 “Financial Instruments” regulates requirements for measurement and recognition of certain contracts in relation to trading financial assets and liabilities or non-financial items. It replaces existing guidance in IAS No. 39 “Financial Instruments: Recognition and Measurement”.

The standard will generally be applied retrospectively with some exemptions allowing an entity not to restate the comparative information for prior periods in relation to classification and measurement (including impairment) changes. Such exemptions will be applied by the Company. The Company will recognize the accumulated effect resulting from initial application of IFRS No. 9 as reserves, retained earnings and non-controlling interests of the Company at the date of initial application.

The standard’s expected impact on the consolidated financial statements are as follows.

1) Classification and measurement of financial assets

When applying IFRS No. 9, the classification of financial assets will be driven by the Company’s business model for managing the financial assets and contractual terms of cash flow.

The following table shows the classification of financial assets measured subsequently at amortized cost, at fair value through other comprehensive income and at fair value through profit or loss. If a hybrid contract contains a host that is a financial asset, the classification of the hybrid contract shall be determined for the entire contract without separating the embedded derivative.

Business model	Contractual cash flows are solely payments of principal and interests	All other cases
To collect contractual cash flows	Amortized cost (*1)	Fair value through profit or loss (*2)
Both to collect contractual cash flows and sell financial assets	Fair value through other comprehensive income (*1)
For trading, and others	Fair value through profit or loss

(*1) The Company may irrevocably designate as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch.

(*2) The Company may irrevocably designate equity investments that are not held for trading as at fair value through other comprehensive income.

As of December 31, 2017, the Company had financial asset at fair value through profit or loss of ￦67,021 million, available-for-sale financial assets of ￦1,978,115 million, financial assets held-to-maturity of ￦5,211 million, and loans and receivables of ￦21,268,107 million.

As a result of analysis of the impact on the consolidated financial statements, the Company expects that debt instruments whose contractual cash flows do not solely represent payments of principal and interest and those held for trading will be measured at fair value through profit or loss; loans and receivables whose contractual cash flows solely represent receipt of principal and interest but are not owned for the purpose of collection of contractual cash flows will be measured at fair value through other comprehensive income or fair value through profit or loss. Accordingly, the financial assets at fair value through profit or loss may increase upon adoption of IFRS No. 9 which may increase the volatility in profit or loss. The Company expects the application of IFRS No. 9 on these financial assets will not have a material impact on the consolidated financial statements.

In accordance with IFRS No. 9, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument which is not held for trading at initial recognition. As of December 31, 2017, the Company had equity instruments classified as financial assets available-for-sale for the purpose of long-term strategic plan and the fair value of the accompanying asset is ￦1,730,753 million. In accordance with IFRS No. 9, the Company expects to make an irrevocable election to classify the equity instrument as assets measured at fair value through other comprehensive income, for which all subsequent changes in fair value are recognized in other comprehensive income and not subsequently recycled to profit or loss. As of January 1, 2018, the date of initial application, the Company expects to recognize a decrease in reserves of ￦401,344 million and an increase in retained earnings of ￦401,344 million due to designation of equity instruments to fair value through other comprehensive income.

2) Impairment: Financial Assets and Contract Assets

IFRS No. 9 replaces the incurred loss model in the existing standard with a forward-looking expected credit loss model for debt instruments, lease receivables, contractual assets, loan commitments, and financial guarantee contracts.

Under IFRS No. 9, impairment losses are likely to be recognized earlier than using the incurred loss model under the existing guidance in IAS No. 39 as loss allowances will be measured either 12-month or lifetime expected credit loss based on the extent of increase in credit risk.

If credit risk has increased significantly since the initial recognition, a loss allowance for lifetime expected credit loss is required to be measured at the end of every reporting period. If credit risk has not increased significantly since the initial recognition, a loss allowance is measured based on 12-month expected credit loss.

If the financial instrument has low credit risk at the end of the reporting period, the Company may assume that the credit risk has not increased significantly since initial recognition. However, a loss allowance for lifetime expected credit losses is required for contract assets or trade receivables that do not contain a significant financing component. Additionally, the Company has elected to recognize lifetime expected credit losses for contract assets or trade receivables that contain a significant financing component.

The Company expects impairment losses of financial assets under IFRS No. 9 to be recognized earlier. As of January 1, 2018, the date of initial application, the Company expects to recognize an increase in loss allowance of ￦66,637 million and a decrease in retained earnings and non-controlling interests of ￦32,732 million and ￦19,545 million, respectively.

3) Classification and Measurement of Financial Liabilities

IFRS No. 9 mostly adheres to the existing requirements under IAS No. 39 regarding the classification of financial liabilities.

Under IAS No. 39, all financial liabilities designated at fair value through profit or loss recognized their fair value movements in profit or loss. However, IFRS No. 9 requires the amount of the change in the liability’s fair value attributable to changes in the credit risk to be recognized in other comprehensive income. Amounts presented in other comprehensive income are not subsequently transferred to profit or loss.

The Company did not designate financial liabilities as financial liability at fair value through profit or loss as of December 31, 2017 and expects the adoption of IFRS No. 9 will not have significant impact on the classification of financial liabilities.

4) Hedge Accounting

Regarding the initial application of IFRS No. 9, the Company may choose as its accounting policy choice to continue to apply all of the hedge accounting requirements of IAS No. 39 instead of the requirements of IFRS No. 9. The Company determined to consistently apply hedge accounting requirements of IAS No. 39.

(b) IFRS No. 15 “Revenue from Contracts with Customers”

IFRS No. 15 “Revenue from Contracts with Customers” provides a unified five-step model for determining the timing, measurement and recognition of revenue. It replaces existing revenue recognition guidance, including IAS No. 18 “Revenue”, IAS No. 11 “Construction Contracts”, SIC No. 31 “Revenue- Barter Transactions Involving Advertising Services”, IFRIC No. 13 “Customer Loyalty Programs”, IFRIC No. 15 “Agreements for the Construction of Real Estate”, and IFRIC No. 18 “Transfers of Assets from Customers”.

The Company intends to apply the modified retrospective approach by recognizing the cumulative impact of initially applying the revenue standard as of January 1, 2018, the date of initial application and the Company also decided to apply the practical expedients as allowed by IFRS No. 15 by applying the new standard only to those contracts that are not considered as completed contracts at the date of initial application. Accordingly, upon adoption of IFRS No. 15, the Company will not restate the financial statements for comparative periods.

Existing IFRS standards and interpretations including IAS No. 18 provide revenue recognition guidance by transaction types such as sales of goods, rendering of services, interest income, royalty income, dividend income and construction revenue; however, under the new standard, IFRS No. 15, the five-step approach (Step 1: Identify the contract(s) with a customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract, Step 5: Recognize revenue when the entity satisfied a performance obligation) is applied for all types of contracts or agreements.

The standard’s expected impact on the consolidated financial statements are as follows.

1) Identification of performance obligations

The Company holds certain contracts for sales of manufactured product and merchandise which include transportation service. When applying IFRS No. 15, sales of manufactured products or merchandise and delivery of products (i.e. shipping service) are identified as separate performance obligations in the contracts with customers. For transactions for which the shipping terms are on shipment basis and the customer pays shipping costs, the two performance obligations are separately accounted for because delivery of products is performed after the control over the products is transferred to the customer. The transaction price allocated to the performance obligation of delivery service will be recognized when the obligation of delivery of the product is completed.

The Company identified shipping service included in the sales contract as a separate performance obligation that will be satisfied over the promised service period. As of January 1, 2018, the date of initial application, change in relevant accounting policy is expected to result in decrease in retained earnings and non-controlling interests of ￦949 million and ￦156 million, respectively.

Certain construction contracts of the Company include design, purchase and construction services through separate service contracts. According to IFRS No. 15, if service or goods provided by the Company are highly dependent or correlated, the Company should identify them as a single performance obligation regardless of the number of contracts made.

The Company considered each service contract as a combined single obligation and therefore, upon adoption of IFRS No. 15 as of January 1, 2018, the date of initial application, the Company expects to recognize increases in retained earnings and non-controlling interests of ￦452 million and ￦628 million, respectively.

2) Variable consideration

Under IFRS No. 15, the Company estimates the amount of variable consideration by using the expected value which the Company expects to better predict the amount of consideration. The Company recognizes revenue with transaction price including variable consideration only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the refund period has lapsed.

In certain sales arrangements, unit price is subject to adjustment due to quality of products. A certain percentage of sales discount is also provided in case customers make payment before the settlement due date. In addition, certain service contracts are subject to compensation payment if the Company fails to achieve a promised level of obligation.

As of January 1, 2018, the date of initial application of IFRS No. 15, the adoption is expected to result in decrease in retained earnings of ￦2,773 million and increase in non-controlling interests of ￦88 million.

3) Performance obligation satisfied over time

In accordance with IFRS No. 15, revenue is recognized over time by measuring progress only if the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

The Company analyzed certain service contracts, where the Company provides manufacturing services for customized machinery. Currently the related revenue is recognized over the period when such services are provided. Under IFRS No. 15, as the Company does not have an enforceable right to payment for performance completed to date, the related revenue is recognized at the time when the machinery is delivered. As of January 1, 2018, the date of initial application, changes in accounting policy due to enforceable right to payment are expected to result in decreases in retained earnings and non-controlling interests of ￦1,188 million and ￦1,115 million, respectively.

According to IFRS No. 15, the effects of any inputs that do not depict the transfer of control of goods or services to the customer such as the costs of wasted materials, labor or other resources to fulfill the contract that were not reflected in the price of the contract should be excluded from calculating percentage of completion. As of January 1, 2018, the date of initial application, change in percentage of completion due to excessive use of materials is expected to result in decreases in retained earnings and non-controlling interests of ￦2,855 million and ￦1,512 million, respectively.

4) Incremental costs of obtaining a contract

In accordance with IFRS No. 15, the Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs, and costs that are recognized as assets are amortized over the period that the related goods or services are transferred to the customer.

Certain costs incurred in construction segment such as costs to obtain a contract that would have been incurred regardless of whether the contract was obtained should be recognized as an expense immediately, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained. Such costs have been previously capitalized if it is probable the related contracts will be entered into. As of January 1, 2018, the date of initial application, change in accounting policy regarding incremental costs of obtaining a contract is expected to result in decreases in retained earnings and non-controlling interests of ￦63,753 million and ￦56,993 million, respectively.

(c) IFRS No. 16 “Leases”

IFRS No. 16 “Leases” will replace IAS No. 17 “Leases” and IFRIC No. 4 “Determining whether an Arrangement contains a Lease”. It is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for a Company which has adopted IFRS No. 15.

As a lessee, the Company shall apply this standard using one of the following two methods; (a) retrospectively to each prior reporting period presented in accordance with IAS No. 8 “Accounting Policies, Changes in Accounting Estimates and Errors” but using the practical expedients for completed contracts- i.e. completed contracts as of the beginning of the earliest prior period presented are not restated; or (b) retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application.

IFRS No. 16 suggests a single accounting model that requires a lessee to recognize lease related asset and liability in the consolidated financial statements. A lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. The lessee may elect not to apply the requirements to short-term lease of which has a term of 12 months or less at the commencement date and low value assets. Accounting treatment for lessor is similar to the existing standard which classifies lease into finance and operating lease.

Application of IFRS No. 16 will change current operating lease expense which has been recognized in straight-line method into depreciation expense of right-of-use asset and interest expense of lease liability, and therefore, nature of expense recognized in relation to lease will change. However, it is expected that there will be no significant impact on finance lease.

The Company has not yet initiated the preparation for the application of IFRS No. 16 and has not performed an assessment of the impact resulting from the application of IFRS No. 16. The Company will complete the analysis of financial impacts arising from applying this standard in 2018.

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Financial risk management

12 Months Ended

Dec. 31, 2017

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Financial risk management

4. Financial risk management

The Company has exposure to the following risks from its use of financial instruments:

• credit risk

• liquidity risk

• market risk

• capital risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

(a) Financial risk management

1) Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

2) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. In addition, credit risk arises from finance guarantees.

The Company implements a credit risk management policy under which the Company only transacts business with counterparties that have a certain level of credit rate evaluated based on financial condition, historical experience, and other factors. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The default risk of a nation or an industry in which a customer operates its business does not have a significant influence on credit risk. The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for companies of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets. Debt securities are analyzed individually, and an expected loss shall be directly deducted from debt securities.

Credit risk also arises from transactions with financial institutions, and such transactions include transactions of cash and cash equivalents, various deposits, and financial instruments such as derivative contracts. The Company manages its exposure to this credit risk by only entering into transactions with banks that have high international credit ratings. The Company’s treasury department authorizes, manages, and overseas new transactions with financial institutions with whom the Company has no previous relationship.

Furthermore, the Company limits its exposure to credit risk of financial guarantee contracts by strictly evaluating their necessity based on internal decision making processes, such as the approval of the board of directors.

3) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company’s cash flow from business, borrowing or financing is sufficient to meet the cash requirements for the Company’s strategic investments. Management believes that the Company is capable of raising funds by borrowing or financing if the Company is not able to generate cash flow requirements from its operations. The Company has committed borrowing facilities with various banks.

4) Market risk

Market risk means that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The goal of market risk management is optimization of profit and controlling the exposure to market risk within acceptable limits.

① Currency risk

The Company’s policy in respect of foreign currency risks is a natural hedge whereby foreign currency income is offset with foreign currency expenditures. The remaining net exposures after the natural hedge have been hedged using derivative contracts such as forward exchange contracts. In addition, the Company’s derivative transactions are limited to hedging actual foreign currency transactions and speculative hedging is not permitted. Based on this policy, the Company has performed currency risk management specific to various characteristics of different segments. The entities in the steel segment reduces the foreign currency exposure by repayment of foreign currency borrowings subjected to investment in overseas when its maturities come. The entities in the engineering and construction segment have hedged foreign currency risks by using forward exchange contracts. Entities in the trading segment have hedged foreign currency risks by using forward exchange contracts when the foreign currencies received and paid are different.

② Interest rate risk

The Company manages the exposure to interest rate risk by adjusting of borrowing structure ratio between borrowings at fixed interest rates and variable interest rate. The Company monitors interest rate risks regularly in order to avoid exposure to interest rate risk on borrowings at variable interest rate.

③ Other market price risk

Equity price risk arises from listed equity securities among available-for-sale equity securities. Management of the Company measures regularly the fair value of listed equity securities and the risk of variance in future cash flow caused by market price fluctuations. Significant investments are managed separately and all buy and sell decisions are approved by management of the Company.

(b) Management of capital

The fundamental goal of capital management is the maximization of shareholders’ value by means of the stable dividend policy and the retirement of treasury shares. The capital structure of the Company consists of equity and net borrowings (after deducting cash and cash equivalents) and current financial instruments from borrowings. The Company applied the same capital risk management strategy that was applied in the previous period.

Net borrowing-to-equity ratio as of December 31, 2016 and 2017 is as follows:

	2016			2017
	(in millions of Won)
Total borrowings	￦	22,704,998			21,063,657
Less: Cash and cash equivalents		2,447,619			2,612,530
Net borrowings		20,257,379			18,451,127
Total equity		45,765,269			47,326,725
Net borrowings-to-equity ratio		44.26	%		38.99	%

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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2017

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Cash and Cash Equivalents

5. Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2016 and 2017 are as follows:

	2016		2017 (*1)
	(in millions of Won)
Cash	￦	11,960		1,896
Demand deposits and checking accounts		1,312,426		1,259,813
Time deposits		254,888		360,985
Other cash equivalents		868,345		989,836
	￦	2,447,619		2,612,530

(*1) As of December 31, 2017, cash equivalents amounting to ￦36,302 million of POSCO ENGINEERING & CONSTRUCTION CO., LTD., a subsidiary of the Company, are restricted for use related to the joint account of joint operations and others.

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Trade Accounts and Notes Receivable

12 Months Ended

Dec. 31, 2017

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Trade Accounts and Notes Receivable

6. Trade Accounts and Notes Receivable

(a) Trade accounts and notes receivable as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Current
Trade accounts and notes receivable	￦	9,320,915			8,579,620
Finance lease receivables		10,300			10,469
Unbilled due from customers for contract work		860,287			728,007
Less: Allowance for doubtful accounts		(517,476	)		(493,533	)
	￦	9,674,026			8,824,563
Non-current
Trade accounts and notes receivable	￦	80,447			871,432
Finance lease receivables		11,326			734
Less: Allowance for doubtful accounts		(40,649	)		(140,596	)
	￦	51,124			731,570

Trade accounts and notes receivable sold to financial institutions, for which the derecognition conditions were not met, amounted to ￦344,410 million and ￦309,964 million as of December 31, 2016 and 2017, respectively. The fair value of trade accounts and notes receivable approximates the carrying amounts and trade accounts and notes receivable are included in short-term borrowings from financial institutions (Note 17).

(b) Finance lease receivables are as follows:

Customer	Contents	2016		2017
	(in millions of Won)
Korea Electric Power Corporation	Combined thermal power plant 3~4	￦	20,648		10,469
KC Chemicals CORP	Machinery and equipment		244		—
Hystech.Co. Ltd.	Machinery and equipment		734		734
		￦	21,626		11,203

(c) The gross amount and present value of minimum lease payments as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Less than 1 year	￦	13,114			11,771
1 year – 5 years		12,547			828
Unrealized interest income		(4,035	)		(1,396	)
Present value of minimum lease payment	￦	21,626			11,203

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Other Receivables

12 Months Ended

Dec. 31, 2017

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Other Receivables

7. Other Receivables

Other receivables as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Current
Loans	￦	421,818			617,696
Other accounts receivable		1,131,492			960,543
Accrued income		139,618			179,971
Deposits		93,891			107,137
Others		13,606			18,925
Less: Allowance for doubtful accounts		(260,683	)		(248,266	)
	￦	1,539,742			1,636,006
Non-current
Loans	￦	733,974			874,158
Other accounts receivable		81,938			92,939
Accrued income		1,746			1,663
Deposits		104,217			122,485
Less: Allowance for doubtful accounts		(158,963	)		(212,069	)
	￦	762,912			879,176

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Other Financial Assets

12 Months Ended

Dec. 31, 2017

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Other Financial Assets

8. Other Financial Assets

Other financial assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Derivatives assets held for trading	￦	49,281		63,912
Financial assets held for trading		—		1,970
Available-for-sale securities (bonds)		2,952		136,141
Current portion of held-to-maturity securities		422		421
Short-term financial instruments (*1,2)		5,172,256		6,843,436
	￦	5,224,911		7,045,880
Non-current
Derivatives assets held for trading	￦	98,301		4,378
Available-for-sale securities (equity instruments) (*3,4)		2,392,534		1,730,753
Available-for-sale securities (bonds)		46,330		54,439
Available-for-sale securities (others)		73,108		56,782
Held-to-maturity securities		2,048		4,790
Long-term financial instruments (*2)		45,371		60,542
	￦	2,657,692		1,911,684

(*1) As of December 31, 2016 and 2017, ￦6,813 million and ￦10,080 million, respectively, are restricted for use in a government project.

(*2) As of December 31, 2016 and 2017, financial instruments amounting to ￦82,008 million and ￦78,477 million, respectively, are restricted for use in financial arrangements, pledge and others.

(*3) During the year ended December 31, 2017, there were objective evidences of impairment for listed equity securities such as FINE BESTEEL CO., LTD and others and for non-listed equity securities such as Congonhas Minerios S.A. and others due to the significant or prolonged decline in the fair value below cost of the shares. As a result, an impairment losses of ￦123,214 million was recognized in profit or loss for the year ended December 31, 2017.

(*4) As of December 31, 2016 and 2017, ￦123,220 million and ￦136,099 million of available-for-sale securities, respectively, have been provided as collateral for borrowings, construction projects and others.

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Inventories

12 Months Ended

Dec. 31, 2017

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Inventories

9. Inventories

(a) Inventories as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Finished goods	￦	1,200,344			1,526,628
Merchandise		851,325			930,558
Semi-finished goods		1,552,988			1,721,130
Raw materials		1,939,539			2,329,268
Fuel and materials		817,397			808,016
Construction inventories		1,455,115			1,692,092
Materials-in-transit		1,807,816			1,818,576
Others		94,535			103,144
		9,719,059			10,929,412
Less: Allowance for inventories valuation		(203,164	)		(135,631	)
	￦	9,515,895			10,793,781

(b) The changes of allowance for inventories valuation for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	161,940			231,378			203,164
Loss on valuation of inventories		152,952			152,249			78,560
Realization on disposal of inventories		(77,102	)		(161,458	)		(138,967	)
Others		(6,412	)		(19,005	)		(7,126	)
Ending	￦	231,378			203,164			135,631

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Assets Held for Sale

12 Months Ended

Dec. 31, 2017

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Assets Held for Sale

10. Assets Held for Sale

Details of assets held for sale as of December 31, 2016 and 2017 are as follows:

	2016						2017
	Controlling company		Subsidiaries (*1)		Total		Controlling company		Subsidiaries (*2)		Total
	(in millions of Won)
Assets
Property, plant and equipment		764		305,864		306,628		392		71,340		71,732
Others		—		5,330		5,330		—		36		36
	￦	764		311,194		311,958		392		71,376		71,768

(*1) During the year ended December 2016, Posco e&c Songdo International Building, a subsidiary of the Company, entered into a sales contract regarding disposal of the office building of POSCO ENGINEERING & CONSTRUCTION CO., LTD. in Songdo and classified the accompanying property, plant and equipment as assets held for sale. During the year ended December 2017, disposal of the accompanying assets held for sale was completed.

(*2) During the year ended December 2017, POSCO ENGINEERING & CONSTRUCTION CO., LTD., a subsidiary of the Company, determined to dispose of the office building, Seomyeon Fiesta, in Busan and classified the related property, plant and equipment amounting to ￦71,340 million as assets held for sale.

XML

Investments in Associates and Joint ventures

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Investments in Associates and Joint ventures

11. Investments in Associates and Joint ventures

(a) Investments in associates and joint ventures as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Investments in associates	￦	1,595,441		1,520,441
Investments in joint ventures		2,286,948		2,037,491
	￦	3,882,389		3,557,932

(b) Details of investments in associates as of December 31, 2016 and 2017 are as follows:

	Number of shares		Ownership (%)		Acquisition cost		Book value
Company							2016		2017
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF		178,713,975,892		31.14	￦	178,787	￦	175,690		175,553
SNNC		18,130,000		49.00		90,650		107,859		110,424
QSONE Co.,Ltd.		200,000		50.00		84,395		84,799		85,049
Chun-cheon Energy Co., Ltd. (*1)		16,098,143		45.67		80,491		45,077		74,378
Incheon-Gimpo Expressway Co., Ltd. (*1)		9,032,539		18.26		45,163		37,372		31,660
BLUE OCEAN Private Equity Fund		333		27.52		33,300		35,752		19,620
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		2,008,000		29.53		10,040		12,551		17,252
UITrans LRT Co., Ltd. (*1)		7,714,380		38.19		38,572		17,851		15,841
Daesung Steel		108,038		17.54		14,000		12,302		15,500
Keystone NO. 1. Private Equity Fund		13,800,000		40.45		13,800		13,314		12,379
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		6,485		12.50		6,485		11,890		6,828
KONES, Corp.		3,250,000		41.67		6,893		5,641		2,827
Others (35 companies) (*1)								55,061		67,325
								615,159		634,636
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		135,219,000		25.04		150,779		215,996		197,069
AES-VCM Mong Duong Power Company Limited (*2)		—		30.00		164,303		167,141		142,348
7623704 Canada Inc.		114,452,000		10.40		124,341		137,512		121,702
Eureka Moly LLC		—		20.00		240,123		89,601		79,398
AMCI (WA) PTY LTD		49		49.00		209,664		70,501		63,378
Nickel Mining Company SAS		3,234,698		49.00		157,585		45,138		45,905
NCR LLC		—		29.41		37,634		36,738		33,738
KOREA LNG LTD.		2,400		20.00		135,205		63,058		33,422
PT. Batutua Tembaga Raya		128,285		22.00		21,824		22,723		21,823
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		10,200,000		34.00		9,517		18,008		15,617
PT. Wampu Electric Power (*1)		8,708,400		20.00		10,054		8,706		13,391
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		50		25.00		4,723		6,840		6,517
Others (26 companies) (*1)								98,320		111,497
								980,282		885,805
							￦	1,595,441		1,520,441

(*1) As of December 31, 2016 and 2017, investments in associates amounting to ￦124,963 million and ￦158,370 million, respectively, are provided as collateral in relation to the associates’ borrowings.

(*2) As of December 31, 2016 and 2017, shares of PSC Energy Global Co., Ltd., a subsidiary of the Company, are provided as collateral in relation to the associates’ borrowings.

(c) Details of investments in joint ventures as of December 31, 2016 and 2017 are as follows:

	Number of shares		Ownership (%)		Acquisition cost		Book value
Company							2016		2017
	(in millions of Won)
[Domestic]
POSCO MITSUBISHI CARBON TECHNOLOGY		11,568,000		60.00	￦	115,680	￦	83,113		110,760
Others (5 companies)								—		6,094
								83,113		116,854
[Foreign]
Roy Hill Holdings Pty Ltd (*1)		13,117,972		12.50		1,528,672		1,186,859		1,125,133
POSCO-NPS Niobium LLC		325,050,000		50.00		364,609		393,570		348,836
CSP — Compania Siderurgica do Pecem		1,108,696,532		20.00		558,821		330,463		146,427
KOBRASCO		2,010,719,185		50.00		32,950		88,308		108,485
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		25.00		61,961		97,369		88,305
DMSA/AMSA (*1)		—		4.00		304,623		74,935		56,735
Others (14 companies)								32,331		46,716
								2,203,835		1,920,637
							￦	2,286,948		2,037,491

(*1) As of December 31, 2016 and 2017, the investments in joint ventures are provided as collateral in relation to the joint ventures’ borrowings.

(d) The movements of investments in associates and joint ventures for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

Company	December 31, 2015 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease) (*1)			December 31, 2016 Book value
						(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	175,676		222		—			(399	)		191			175,690
SNNC		111,326		—		—			(3,417	)		(50	)		107,859
QSONE Co.,Ltd.		83,919		—		—			880			—			84,799
Chun-cheon Energy Co., Ltd		30,420		19,832		—			(5,175	)		—			45,077
Incheon-Gimpo Expressway Co., Ltd.		39,447		—		—			(2,758	)		683			37,372
BLUE OCEAN Private Equity Fund		35,437		—		—			643			(328	)		35,752
CHUNGJU ENTERPRISE CITY  DEVELOPMENT Co.,Ltd		12,265		—		—			286			—			12,551
UITrans LRT Co., Ltd.		40,903		6,817		—			(29,825	)		(44	)		17,851
Daesung Steel		14,000		—		—			(2,272	)		574			12,302
Keystone NO. 1. Private Equity Fund		13,015		—		—			281			18			13,314
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		14,829		1,875		—			1,186			(6,000	)		11,890
KONES, Corp.		5,775		—		—			(256	)		122			5,641
POSCO MITSUBISHI CARBON TECHNOLOGY		104,970		—		—			(21,929	)		72			83,113
POSCO PLANTEC Co., Ltd.		171,218		—		—			(171,927	)		709			—
SeAH Changwon Integrated Special Steel		165,754		—		—			4,797			(170,551	)		—
POSCO ES MATERIALS CO.,LTD		38,447		—		—			(2,061	)		(36,386	)		—
Others (33 companies)		33,933		20,061		(200	)		(2,802	)		4,069			55,061
		1,091,334		48,807		(200	)		(234,748	)		(206,921	)		698,272
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		222,269		—		(59,717	)		46,855			6,589			215,996
AES-VCM Mong Duong Power Company Limited		153,271		—		—			27,031			(13,161	)		167,141
7623704 Canada Inc.		134,034		—		(921	)		175			4,224			137,512
Eureka Moly LLC		87,878		—		—			(18	)		1,741			89,601
AMCI (WA) PTY LTD		72,289		—		—			(3,358	)		1,570			70,501
Nickel Mining Company SAS		76,445		—		—			(31,047	)		(260	)		45,138
NCR LLC		35,447		—		—			(41	)		1,332			36,738
KOREA LNG LTD.		53,548		—		(6,342	)		6,392			9,460			63,058
PT. Batutua Tembaga Raya		15,382		7,040		—			—			301			22,723
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		19,311		—		—			(412	)		(891	)		18,008
PT. Wampu Electric Power		8,855		—		—			(397	)		248			8,706
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		7,061		—		—			242			(463	)		6,840
Roy Hill Holdings Pty Ltd		1,153,434		—		—			12,643			20,782			1,186,859
POSCO-NPS Niobium LLC		381,461		—		(10,893	)		11,499			11,503			393,570
CSP - Compania Siderurgica do Pecem		80,805		88,930		—			116,694			44,034			330,463
KOBRASCO		78,364		—		(29,297	)		20,761			18,480			88,308
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		100,908		—		—			258			(3,797	)		97,369
DMSA/AMSA		105,964		24,624		—			(60,415	)		4,762			74,935
Others (37 companies)		67,273		28,993		(4,252	)		(791	)		39,428			130,651
		2,853,999		149,587		(111,422	)		146,071			145,882			3,184,117
	￦	3,945,333		198,394		(111,622	)		(88,677	)		(61,039	)		3,882,389

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals, change in capital adjustments effect from translations of financial statements of foreign investees and others.

2) For the year ended December 31, 2017

Company	December 31, 2016 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease) (*1)			December 31, 2017 Book value
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	175,690		—		—			418			(555	)		175,553
SNNC		107,859		—		—			2,370			195			110,424
QSONE Co.,Ltd.		84,799		—		(368	)		618			—			85,049
Chun-cheon Energy Co., Ltd		45,077		27,791		—			1,510			—			74,378
Incheon-Gimpo Expressway Co., Ltd.		37,372		—		—			(6,463	)		751			31,660
BLUE OCEAN Private Equity Fund		35,752		—		—			(8,154	)		(7,978	)		19,620
CHUNGJU ENTERPRISE CITY
DEVELOPMENT Co.,Ltd		12,551		—		—			4,701			—			17,252
UITrans LRT Co., Ltd.		17,851		—		—			(2,010	)		—			15,841
Daesung Steel		12,302		—		—			3,198			—			15,500
Keystone NO. 1. Private Equity Fund		13,314		—		—			(886	)		(49	)		12,379
KoFC POSCO HANWHA KB Shared Growth
NO. 2. Private Equity Fund		11,890		—		—			(197	)		(4,865	)		6,828
KONES, Corp.		5,641		—		—			(2,774	)		(40	)		2,827
POSCO MITSUBISHI CARBON TECHNOLOGY		83,113		—		—			27,582			65			110,760
Others (40 companies)		55,061		28,348		(137	)		(7,995	)		(1,858	)		73,419
		698,272		56,139		(505	)		11,918			(14,334	)		751,490
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		215,996		—		(37,016	)		42,896			(24,807	)		197,069
AES-VCM Mong Duong Power Company Limited		167,141		—		(30,798	)		19,644			(13,639	)		142,348
7623704 Canada Inc.		137,512		—		(7,563	)		7,468			(15,715	)		121,702
Eureka Moly LLC		89,601		—		—			(35	)		(10,168	)		79,398
AMCI (WA) PTY LTD.		70,501		—		—			(4,299	)		(2,824	)		63,378
Nickel Mining Company SAS		45,138		—		—			424			343			45,905
NCR LLC		36,738		276		—			(60	)		(3,216	)		33,738
KOREA LNG LTD.		63,058		—		(6,466	)		(70,180	)		47,010			33,422
PT. Batutua Tembaga Raya		22,723		—		—			260			(1,160	)		21,823
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		18,008		—		—			(1,268	)		(1,123	)		15,617
PT. Wampu Electric Power		8,706		—		—			5,927			(1,242	)		13,391
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		6,840		—		—			303			(626	)		6,517
Roy Hill Holdings Pty Ltd.		1,186,859		—		—			46,020			(107,746	)		1,125,133
POSCO-NPS Niobium LLC		393,570		—		(17,277	)		17,173			(44,630	)		348,836
CSP-Compania Siderurgica do Pecem		330,463		—		—			(147,847	)		(36,189	)		146,427
KOBRASCO		88,308		—		(22,135	)		56,445			(14,133	)		108,485
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		97,369		—		(5,542	)		1,555			(5,077	)		88,305
DMSA/AMSA		74,935		13,712		—			(22,339	)		(9,573	)		56,735
Others (40 companies)		130,651		22,209		(4,408	)		46,535			(36,774	)		158,213
		3,184,117		36,197		(131,205	)		(1,378	)		(281,289	)		2,806,442
	￦	3,882,389		92,336		(131,710	)		10,540			(295,623	)		3,557,932

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals, change in capital adjustments effect from translations of financial statements of foreign investees and others.

(e) Summarized financial information of associates and joint ventures as of and for the years ended December 31, 2016 and 2017 are as follows:

1) December 31, 2016

Company	Assets		Liabilities		Equity  (deficit)			Sales		Net income  (loss)
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	597,767		864		596,903			—		(1,349	)
SNNC		725,987		482,429		243,558			527,101		2,022
QSONE Co.,Ltd.		247,385		77,786		169,599			15,961		1,760
Chun-cheon Energy Co., Ltd		547,805		378,613		169,192			—		(3,748	)
Incheon-Gimpo Expressway Co., Ltd.		929,539		718,107		211,432			—		(1,910	)
BLUE OCEAN Private Equity Fund		357,723		220,895		136,828			456,311		2,335
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		136,857		124,666		12,191			19,028		967
UITrans LRT Co., Ltd.		400,761		307,625		93,136			—		(822	)
Daesung Steel		150,944		112,194		38,750			60,772		(12,955	)
Keystone NO. 1. Private Equity Fund		119,378		79,946		39,432			197		694
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		96,213		1,094		95,119			14,157		9,561
KONES, Corp.		2,627		1,519		1,108			3,952		(615	)
POSCO MITSUBISHI CARBON TECHNOLOGY		448,618		311,070		137,548			53,908		(36,572	)
POSCO PLANTEC Co., Ltd.		501,659		678,004		(176,345	)		361,351		(43,195	)
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		2,171,689		1,305,942		865,747			491,011		187,114
7623704 Canada Inc.		1,334,391		1		1,334,390			—		19,485
Nickel Mining Company SAS		491,458		347,194		144,264			145,571		(61,473	)
KOREA LNG LTD.		303,389		19,704		283,685			33,035		31,962
PT. Batutua Tembaga Raya		351,119		332,037		19,082			—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		83,291		24,676		58,615			117,387		(1,216	)
PT. Wampu Electric Power		206,052		165,618		40,434			3,405		(1,984	)
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		67,905		40,451		27,454			81,260		938
Roy Hill Holdings Pty Ltd		10,962,261		8,059,714		2,902,547			845,243		129,968
POSCO-NPS Niobium LLC		786,937		—		786,937			—		24,719
CSP - Compania Siderurgica do Pecem		5,682,161		4,237,247		1,444,914			226,669		243,151
KOBRASCO		178,853		2,236		176,617			72,274		41,522
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		789,336		427,475		361,861			948,488		1,033
DMSA/AMSA		6,570,172		4,842,560		1,727,612			579,388		(519,969	)

2) December 31, 2017

Company	Assets		Liabilities		Equity		Sales		Net income  (loss)
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	562,698		866		561,832		—		1,261
SNNC		705,975		459,519		246,456		576,023		2,417
QSONE Co.,Ltd.		248,779		78,680		170,099		15,297		1,236
Chun-cheon Energy Co., Ltd		700,079		539,137		160,942		164,294		(8,250	)
Incheon-Gimpo Expressway Co., Ltd.		1,132,233		922,338		209,895		—		(23,221	)
BLUE OCEAN Private Equity Fund		311,129		188,512		122,617		445,238		(3,345	)
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		76,184		48,072		28,112		77,093		15,921
UITrans LRT Co., Ltd.		464,074		384,202		79,872		3,689		(13,263	)
Daesung Steel		169,774		112,795		56,979		70,434		18,230
Keystone NO. 1. Private Equity Fund		170,155		133,033		37,122		5,391		(2,070	)
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		55,936		1,315		54,621		10,212		(1,578	)
KONES, Corp.		2,766		1,616		1,150		5,379		139
POSCO MITSUBISHI CARBON TECHNOLOGY		478,847		295,052		183,795		154,312		46,138
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		1,911,942		1,121,783		790,159		445,682		171,303
7623704 Canada Inc.		1,182,376		9		1,182,367		—		82,344
Nickel Mining Company SAS		465,700		324,687		141,013		179,683		(4,450	)
KOREA LNG LTD.		179,269		86		179,183		34,640		32,446
PT. Batutua Tembaga Raya		336,085		272,542		63,543		195,520		49,091
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		70,437		18,722		51,715		85,850		(3,736	)
PT. Wampu Electric Power		212,095		148,177		63,918		779		29,634
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		70,701		43,588		27,113		84,973		1,210
Roy Hill Holdings Pty Ltd		10,148,416		6,600,900		3,547,516		2,988,372		797,008
POSCO-NPS Niobium LLC		697,470		—		697,470		—		32,481
CSP - Compania Siderurgica do Pecem		4,805,353		4,223,392		581,961		1,290,767		(740,591	)
KOBRASCO		252,813		35,843		216,970		179,453		112,890
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		717,472		391,871		325,601		1,245,178		5,978
DMSA/AMSA		5,586,171		4,167,906		1,418,265		630,229		(475,958	)

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Joint Operations

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Joint Operations

12. Joint Operations

Details of significant joint operations that the Company is participating in as a party to a joint arrangement as of December 31, 2017 are as follows:

Joint operations	Operation	Ownership (%)	Location
Myanmar A-1/A-3 mine	Mineral development and gas production	51.00	Myanmar
Offshore midstream	Gas transportation facility	51.00	Myanmar
Greenhills mine	Mine development	20.00	Canada
Arctos Anthracite coal project	Mine development	50.00	Canada
Mt. Thorley J/V	Mine development	20.00	Australia
POSMAC J/V	Mine development	20.00	Australia
RUM J/V	Mine development	10.00	Australia
Hanam-Gamil package public housing project	Construction	7.70	Korea
Sejong 2-1 P3 Block public housing project	Construction	37.00	Korea
Yongin-Giheung Station area city development project	Construction	61.00	Korea
Korean wave world complex land multi-purpose building development project	Construction	33.30	Korea
Sejong 4-1 P3 Block public housing project	Construction	60.00	Korea

XML

Investment Property, Net

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Investment Property, Net

13. Investment Property, Net

(a) Investment property as of December 31, 2016 and 2017 are as follows:

	2016							2017
	Acquisition cost		Accumulated depreciation and impairment loss			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Book value
	(in millions of Won)
Land	￦	423,910		(31,187	)		392,723		360,402		—			360,402
Buildings		807,657		(136,118	)		671,539		727,022		(92,982	)		634,040
Structures		3,148		(1,001	)		2,147		7,717		(1,436	)		6,281
Construction-in-progress		51,311		—			51,311		64,191		—			64,191
	￦	1,286,026		(168,306	)		1,117,720		1,159,332		(94,418	)		1,064,914

As of December 31, 2017, the fair value of investment property is ￦1,663,682 million, among which the Company believed the fair value of its investment property of six subsidiaries, including POSCO (Dalian) IT Center Development Co., Ltd. approximate its book value of ￦126,026 million. Also, the Company used the prior year’s fair value for some of the investment property since it is believed that the fair value has not changed significantly.

(b) Changes in the carrying amount of investment property for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	346,879		24,116		(8,056	)		—			29,784			392,723
Buildings		696,526		7,548		(3,339	)		(24,043	)		(5,153	)		671,539
Structures		1,819		1		—			(288	)		615			2,147
Construction-in-progress		39,068		13,910		—			—			(1,667	)		51,311
	￦	1,084,292		45,575		(11,395	)		(24,331	)		23,579			1,117,720

(*1) Impairment loss on investment property amounting to ￦318 million is included.

(*2) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Disposals			Depreciation			Others (*1)			Ending
	(in millions of Won)
Land	￦	392,723		20,941		(37,725	)		—			(15,537	)		360,402
Buildings		671,539		38,831		(9,506	)		(23,450	)		(43,374	)		634,040
Structures		2,147		—		—			(591	)		4,725			6,281
Construction-in-progress		51,311		17,648		—			—			(4,768	)		64,191
	￦	1,117,720		77,420		(47,231	)		(24,041	)		(58,954	)		1,064,914

(*1) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

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Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2017

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Property, Plant and Equipment, Net

14. Property, Plant and Equipment, Net

(a) Property, plant and equipment as of December 31, 2016 and 2017 are as follows:

	2016										2017
	Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value
	(in millions of Won)
Land	￦	2,607,660		(6,452	)		—			2,601,208		2,534,102		(6,452	)		—			2,527,650
Buildings		9,180,028		(4,183,974	)		(423	)		4,995,631		9,311,426		(4,433,996	)		(412	)		4,877,018
Structures		5,385,365		(2,476,818	)		(67	)		2,908,480		5,452,713		(2,686,802	)		(59	)		2,765,852
Machinery and equipment		46,698,254		(26,379,544	)		(320	)		20,318,390		46,669,612		(27,301,410	)		(245	)		19,367,957
Vehicles		306,770		(259,986	)		(85	)		46,699		296,815		(263,884	)		(70	)		32,861
Tools		385,960		(312,266	)		(2,314	)		71,380		380,144		(315,446	)		(1,058	)		63,640
Furniture and fixtures		609,736		(477,064	)		(266	)		132,406		643,779		(498,192	)		(148	)		145,439
Finance lease assets		248,590		(89,577	)		—			159,013		243,160		(97,903	)		—			145,257
Bearer plants		—		—			—			—		70,031		(4,516	)		—			65,515
Construction-in-progress		2,542,233		—			(5,101	)		2,537,132		1,897,885		—			(5,539	)		1,892,346
	￦	67,964,596		(34,185,681	)		(8,576	)		33,770,339		67,499,667		(35,608,601	)		(7,531	)		31,883,535

(b) Changes in the carrying amount of property, plant and equipment for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Business combination		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	2,572,807		8,901		15,687		(16,176	)		(6,452	)		26,441			2,601,208
Buildings		5,165,725		37,493		277,242		(12,857	)		(396,899	)		(75,073	)		4,995,631
Structures		2,949,413		19,043		—		(1,994	)		(216,631	)		158,649			2,908,480
Machinery and equipment		21,093,743		193,856		47,021		(36,095	)		(2,277,740	)		1,297,605			20,318,390
Vehicles		52,005		8,967		88		(1,990	)		(18,484	)		6,113			46,699
Tools		73,478		17,546		635		(848	)		(27,396	)		7,965			71,380
Furniture and fixtures		148,099		30,650		32		(4,248	)		(51,361	)		9,234			132,406
Finance lease assets		92,796		79,556		—		(38	)		(13,409	)		108			159,013
Construction-in-progress		2,374,789		1,935,339		2,181		(4,255	)		—			(1,770,922	)		2,537,132
	￦	34,522,855		2,331,351		342,886		(78,501	)		(3,008,372	)		(339,880	)		33,770,339

(*1) Includes impairment losses on property, plant and equipment amounting to ￦196,882 million. During the year ended December 31, 2016, due to the existence of indicators for impairment, such as continuing operating loss on fuel cell business of the POSCO ENERGY CO., LTD., which is included in other reportable segment, the Company performed impairment test and recognized impairment loss of ￦61,565 million. Recoverable amount was determined based on value-in-use, which was calculated by applying a 14.0% discount rate. The impairment recorded in 2016 also included ￦58,388 million related to POSCO for individual assets based on disposal plans.

(*2) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	2,601,208		3,477		(18,226	)		—			(58,809	)		2,527,650
Buildings		4,995,631		53,961		(5,782	)		(361,531	)		194,739			4,877,018
Structures		2,908,480		18,943		(2,558	)		(246,229	)		87,216			2,765,852
Machinery and equipment		20,318,390		194,653		(93,210	)		(2,217,435	)		1,165,559			19,367,957
Vehicles		46,699		9,982		(1,623	)		(22,340	)		143			32,861
Tools		71,380		16,424		(976	)		(28,539	)		5,351			63,640
Furniture and fixtures		132,406		61,597		(1,296	)		(48,416	)		1,148			145,439
Finance lease assets		159,013		4,760		(453	)		(14,810	)		(3,253	)		145,257
Bearer plants		—		—		—			(4,830	)		70,345			65,515
Construction-in-progress		2,537,132		1,894,067		(817	)		(36,706	)		(2,501,330	)		1,892,346
	￦	33,770,339		2,257,864		(124,941	)		(2,980,836	)		(1,038,891	)		31,883,535

(*1) Includes impairment losses on property, plant and equipment amounting to ￦117,231 million. During the year ended December 31, 2017, due to the existence of indicators for impairment, such as continuing operating loss on Suncheon Bay Personal Rapid Transit business of the Suncheon Eco Trans Co., Ltd, a subsidiary of the Company, the Company performed impairment test and recognized impairment loss of ￦48,070 million. The impairment recorded in 2017 also included ￦17,651 million related to POSCO for individual assets due to a decline in economic result and others.

(*2) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

(c) Borrowing costs capitalized and the capitalized interest rate for the years ended December 31, 2016 and 2017 were as follows:

	2016		2017
	(in millions of Won)
Weighted average expenditure	￦	1,070,280		1,180,563
Borrowing costs capitalized		40,321		37,261
Capitalization rate (%)		3.32 ~ 3.82		1.74 ~ 3.45

(d) Property, plant and equipment and investment property pledged as collateral as of December 31, 2016 and 2017 are as follows:

		Book value
	Collateral right holder	2016		2017 (*2)
		(in millions of Won)
Land (*1)	Korean Development Bank and others	￦	925,670		822,057
Buildings and structures (*1)	Korean Development Bank and others		1,734,543		1,678,403
Machinery and equipment	Korean Development Bank and others		4,037,813		3,527,420
Construction-in-progress	Korean Development Bank and others		—		15,389
		￦	6,698,026		6,043,269

(*1) Investment property and other assets(land-use right) are included.

(*2) As of December 31, 2017, the pledged amount is ￦4,984,841 million.

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Goodwill and Other Intangible Assets, Net

12 Months Ended

Dec. 31, 2017

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Goodwill and Other Intangible Assets, Net

15. Goodwill and Other Intangible Assets, Net

(a) Goodwill and other intangible assets as of December 31, 2016 and 2017 are as follows:

	2016										2017
	Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value		Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value
	(in millions of Won)
Goodwill	￦	1,669,556		(294,425	)		—			1,375,131		1,604,288		(254,450	)		—			1,349,838
Intellectual property rights		2,923,030		(401,156	)		(703	)		2,521,171		3,140,159		(690,966	)		—			2,449,193
Premium in rental		139,843		(20,804	)		—			119,039		139,873		(21,563	)		—			118,310
Development expense		376,327		(259,184	)		(131	)		117,012		397,129		(316,892	)		(19	)		80,218
Port facilities usage rights		633,025		(376,408	)		—			256,617		705,692		(396,319	)		—			309,373
Exploration and evaluation assets		196,124		(33,856	)		—			162,268		296,320		(90,376	)		—			205,944
Customer relationships		859,643		(345,398	)		—			514,245		857,624		(390,679	)		—			466,945
Power generation permit		539,405		—			—			539,405		539,405		—			—			539,405
Other intangible assets		1,007,871		(524,000	)		(30	)		483,841		1,006,219		(573,152	)		(24	)		433,043
	￦	8,344,824		(2,255,231	)		(864	)		6,088,729		8,686,709		(2,734,397	)		(43	)		5,952,269

(b) The changes in carrying amount of goodwill and other intangible assets for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Disposals			Amortization			Impairment loss			Others (*2)			Ending
	(in millions of Won)
Goodwill	￦	1,461,954		—		—			—			(95,984	)		9,161			1,375,131
Intellectual property rights		2,667,086		56,849		(753	)		(204,112	)		(16,786	)		18,887			2,521,171
Premium in rental (*1)		127,949		1,964		(7,526	)		(243	)		(1,559	)		(1,546	)		119,039
Development expense		135,796		4,027		(60	)		(61,732	)		(298	)		39,279			117,012
Port facilities usage rights		264,801		—		—			(15,217	)		—			7,033			256,617
Exploration and evaluation assets		151,144		45,524		—			—			(3,290	)		(31,110	)		162,268
Customer relationships		559,809		—		—			(47,790	)		—			2,226			514,245
Power generation permit		539,405		—		—			—			—			—			539,405
Other intangible assets		497,810		52,350		(1,454	)		(48,910	)		(7,353	)		(8,602	)		483,841
	￦	6,405,754		160,714		(9,793	)		(378,004	)		(125,270	)		35,328			6,088,729

(*1) Premium in rental includes memberships with indefinite useful lives.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Business combination		Disposals			Amortization			Impairment loss			Others (*2)			Ending
	(in millions of Won)
Goodwill	￦	1,375,131		—		—		—			—			(21,750	)		(3,543	)		1,349,838
Intellectual property rights		2,521,171		167,580		47,625		(450	)		(217,932	)		(74,524	)		5,723			2,449,193
Premium in rental (*1)		119,039		6,006		—		(3,666	)		(611	)		(1,661	)		(797	)		118,310
Development expense		117,012		3,479		—		(1,179	)		(66,847	)		(694	)		28,447			80,218
Port facilities usage rights		256,617		—		—		—			(19,912	)		—			72,668			309,373
Exploration and evaluation assets		162,268		91,548		—		—			—			(56,519	)		8,647			205,944
Customer relationships		514,245		—		—		—			(46,508	)		—			(792	)		466,945
Power generation permit		539,405		—		—		—			—			—			—			539,405
Other intangible assets		483,841		84,502		—		(1,641	)		(57,964	)		(11,829	)		(63,866	)		433,043
	￦	6,088,729		353,115		47,625		(6,936	)		(409,774	)		(166,977	)		46,487			5,952,269

(*1) Premium in rental includes memberships with indefinite useful lives.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

(c) For the purpose of impairment testing, goodwill is allocated to individually operating entities which are determined to be CGUs. The goodwill amounts as of December 31, 2016 and 2017 are as follows:

Reportable segments	Total number of CGUs
	2016		2017		CGUs	2016		2017
						(in millions of Won)
Steel		9		7	POSCO VST CO., LTD.	￦	36,955		36,955
					Others (*1)		13,151		12,494
Trading		2		2	POSCO DAEWOO Corporation (*1)		1,163,922		1,165,030
					PT. Bio Inti Agrindo		8,070		7,099
E&C		4		2	POSCO ENGINEERING & CONSTRUCTION CO., LTD. (*2)		—		90,426
					POSCO Engineering CO.,Ltd (*2)		111,309		—
					DONG FANG JIN HONG		166		157
Others		6		5	POSCO ENERGY CO., LTD.		26,471		26,471
					Others		15,087		11,206
Total		21		16		￦	1,375,131		1,349,838

(*1) For the year ended December 31, 2017, POSCO DAEWOO Corporation has taken over steel marketing and other business unit of POSCO Processing & Service. As a result, goodwill of POSCO Processing & Service amounting to ￦1,108 million was transferred to POSCO DAEWOO Corporation.

Recoverable amounts of POSCO DAEWOO Corporation are determined based on its value in use. As of December 31, 2017, value in use is estimated by applying 8.1% discount rate and 1.9% terminal growth rate within 5 years, the period for the estimated future cash flows, based on management’s business plan. The terminal growth rate does not exceed long-term average growth rate of its industry. No impairment loss on goodwill was recognized for the year ended December 31, 2017 as the recoverable amount exceeded the carrying amount of the CGU.

The estimated recoverable amount of the CGU exceeded the carrying amount by ￦117,324 million. Value in use of the CGU was affected by the assumptions such as discount rate and terminal growth used in discount cash flow model. When the discount rate increases by 0.25%, value in use will be decreased by 3.45% and when the terminal growth rate decreases by 0.25%, value in use will be decreased by 1.78%. Management believes that any reasonably possible negative change in the key assumptions on which the recoverable amount is based would result in impairment loss of goodwill.

(*2) For the year ended December 31, 2017, POSCO Engineering CO., Ltd was merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD, resulting in transfer of its goodwill to POSCO ENGINEERING & CONSTRUCTION CO., LTD.

Recoverable amounts of POSCO ENGINEERING & CONSTRUCTION CO., LTD are determined based on its value in use. As of December 31, 2017, value in use is estimated by applying 8.2% discount rate and 1.0% terminal growth rate within 5 years, the period for the estimated future cash flows, based on management’s business plan. The terminal growth rate does not exceed long-term average growth rate of its industry. Impairment loss on goodwill of ￦20,883 million was recognized for the year ended December 31, 2017 as the recoverable amount is lower than the carrying amount of the CGU.

Value in use of the CGU was affected by the assumptions such as discount rate and terminal growth used in discount cash flow model. When the discount rate increases by 0.25%, value in use will be decreased by 3.02% and when the terminal growth rate decreases by 0.25%, value in use will be decreased by 2.06%.

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Other Assets

12 Months Ended

Dec. 31, 2017

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Other Assets

16. Other Assets

Other current assets and other non-current assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Advance payment	￦	787,452		661,779
Prepaid expenses		105,102		143,032
Firm commitment asset		—		15,115
Others		1,930		1,316
		894,484		821,242
Non-current
Long-term advance payment		27,189		24,201
Long-term prepaid expenses		380,678		333,153
Others (*1)		159,813		131,657
	￦	567,680		489,011

(*1) As of December 31, 2016 and 2017, the Company recognized tax assets amounting to ￦100,693 million and ￦88,633 million, respectively, based on the Company’s best estimate of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years’ tax audits that were finalized and claim for rectification are finalized.

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Borrowings

12 Months Ended

Dec. 31, 2017

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Borrowings

17. Borrowings

(a) Short-term borrowings and current portion of long-term borrowings as of December 31, 2016 and 2017 are as follows:

	Bank	Issuance date	Maturity date	Interest rate (%)		2016			2017
	(in millions of Won)
Short-term borrowings
Bank overdrafts	JP Morgan and others	January, 2017~ December, 2017	January, 2018~ December, 2018		1.2~9.0	￦	254,036			217,879
Short-term borrowings	HSBC and others	January, 2017~ December, 2017	January, 2018~ December, 2018		0.3~10.5		7,725,691			7,956,939
							7,979,727			8,174,818
Current portion of long-term liabilities
Current portion of long-term borrowings	Export-Import Bank of Korea and others	September, 2001~ November, 2017	February, 2018~ December, 2018		0.4~8.5		1,390,733			1,407,123
Current portion of debentures	Korean Development Bank and others	August, 2009~ November, 2016	February, 2018~ December, 2018		1.4~6.1		825,176			1,693,974
Less: Current portion of discount on debentures issued							(829	)		(1,399	)
							2,215,080			3,099,698
						￦	10,194,807			11,274,516

(b) Long-term borrowings, excluding current portion as of December 31, 2016 and 2017 are as follows:

	Bank	Issuance date	Maturity date	Interest rate (%)		2016			2017
	(in millions of Won)
Long-term borrowings	Export-Import bank of Korea and others	September, 2001~ December, 2017	March, 2019~ March, 2037		0.5~8.4	￦	6,420,612			4,839,199
Less: Present value discount							(55,799	)		(36,459	)
Bonds	Korea Development Bank and others	August, 2009~ November, 2017	February, 2019~ July, 2025		1.8~6.3		6,163,896			4,999,575
Less: Discount on debentures issued							(18,518	)		(13,174	)
						￦	12,510,191			9,789,141

(c) Assets pledged as collateral in regards to the borrowings as of December 31, 2017 are as follows:

	Bank	Book value		Pledged amount
	(in millions of Won)
Property, plant and equipment and Investment property (*1)	Korea Development Bank and others	￦	5,777,330		4,969,201
Trade accounts and notes receivable	Korea Development Bank and others		147,581		147,581
Inventories	Export-Import Bank of Korea and others		162,198		116,378
Financial instruments	Woori Bank and others		56,491		55,048
		￦6,143,600		5,288,208

(*1) Includes other assets(land-use right).

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Other Payables

12 Months Ended

Dec. 31, 2017

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Other Payables

18. Other Payables

Other payables as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Accounts payable	￦	854,623		800,374
Accrued expenses		665,295		653,923
Dividend payable		7,770		7,213
Finance lease liabilities		24,523		17,763
Withholdings		299,448		274,188
	￦	1,851,659		1,753,461
Non-current
Accounts payable	￦	6,823		4,632
Accrued expenses		41,082		14,234
Finance lease liabilities		89,886		75,255
Long-term withholdings		70,768		53,629
	￦	208,559		147,750

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Other Financial Liabilities

12 Months Ended

Dec. 31, 2017

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Other Financial Liabilities

19. Other Financial Liabilities

Other financial liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Derivatives liabilities	￦	85,786		69,872
Financial guarantee liabilities		63,962		59,940
	￦	149,748		129,812
Non-current
Derivatives liabilities	￦	37,110		85,638
Financial guarantee liabilities		44,199		28,467
	￦	81,309		114,105

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Provisions

12 Months Ended

Dec. 31, 2017

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Provisions

20. Provisions

(a) Provisions as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Current		Non-current		Current		Non-current
	(in millions of Won)
Provision for bonus payments	￦	42,986		—		49,171		—
Provision for construction warranties		10,551		86,158		11,804		106,232
Provision for legal contingencies and claims (*1)		4,348		80,498		495		36,269
Provision for the restoration (*2)		10,169		52,425		12,273		121,917
Others (*3,4)		46,811		118,658		37,203		212,754
	￦	114,865		337,739		110,946		477,172

(*1) The Company recognized probable outflow of resources amounting to ￦30,425 million and ￦27,963 million as provisions in relation to lawsuits against the Company as of December 31, 2016 and 2017, respectively.

(*2) Due to contamination of lands near the Company’s magnesium smelting plant located in Gangneung province and others, the Company recognized present values of estimated costs for recovery, ￦29,471 million as provisions for restoration as of December 31, 2017. In order to determine the estimated costs, the Company has assumed that it would use all of technologies and materials available for now to recover the land. In addition, the Company has applied a discount rate of 2.73% to measure present value of these costs.

(*3) As of December 31, 2016 and 2017, POSCO ENERGY CO., LTD., a subsidiary of the Company, recognized ￦87,827 million and ￦157,461 million of provisions for warranties, respectively, for the service contract on fuel cell based on its estimate of probable outflow of resources.

(*4) As of December 31, 2016 and 2017, the amount includes a provision of ￦23,600 million for expected outflow of resources in connection with the performance guarantee for the Hwaseong-Dongtan complexes development project of POSCO ENGINEERING & CONSTRUCTION CO., LTD.

(b) The following are the key assumptions concerning the future and other key sources of estimation uncertainties at the end of the reporting period.

	Key assumptions for the estimation
Provision for bonus payments	Estimations based on financial performance
Provision for construction warranties	Estimations based on historical warranty data
Provision for legal contingencies and claims	Estimations based on the degree of probability of an unfavorable outcome and the ability to make a sufficient reliable estimate of the amount of loss

(c) Changes in provisions for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Increase		Utilization			Reversal			Others (*1)			Ending
	(in millions of Won)
Provision for bonus payments	￦	42,602		44,106		(42,211	)		(272	)		(1,239	)		42,986
Provision for construction warranties		81,446		33,925		(19,469	)		(2,695	)		3,502			96,709
Provision for legal contingencies and claims		52,610		45,525		(14,012	)		(188	)		911			84,846
Provisions for the restoration		45,111		42,529		(13,367	)		(12,475	)		796			62,594
Others		102,243		131,911		(68,143	)		(3,086	)		2,544			165,469
	￦	324,012		297,996		(157,202	)		(18,716	)		6,514			452,604

(*1) Includes adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2017

	Beginning		Increase		Utilization			Reversal			Others (*1)			Ending
	(in millions of Won)
Provision for bonus payments	￦	42,986		74,728		(64,319	)		(3,035	)		(1,189	)		49,171
Provision for construction warranties		96,709		40,916		(18,006	)		(2,502	)		919			118,036
Provision for legal contingencies and claims		84,846		27,459		(70,156	)		(1,749	)		(3,636	)		36,764
Provisions for the restoration		62,594		63,438		(8,530	)		—			16,688			134,190
Others		165,469		161,054		(64,850	)		(20,199	)		8,483			249,957
	￦	452,604		367,595		(225,861	)		(27,485	)		21,265			588,118

(*1) Includes adjustments of foreign currency translation differences and others.

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Employee Benefits

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Employee Benefits

21. Employee Benefits

(a) Defined contribution plans

The expenses related to post-employment benefit plans under defined contribution plans for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Expense related to post-employment benefit plans under defined contribution plans	￦	25,224		30,344		35,538

(b) Defined benefit plans

1) The amounts recognized in relation to net defined benefit liabilities in the statements of financial position as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Present value of funded obligations	￦	1,715,583			1,826,907
Fair value of plan assets (*1)		(1,693,118	)		(1,714,166	)
Present value of non-funded obligations		17,437			16,228
Net defined benefit liabilities	￦	39,902			128,969

(*1) As of December 31, 2016 and 2017, the Company recognized net defined benefit assets amounting to ￦83,702 million and ￦8,224 million, respectively, since there are consolidated entities whose fair value of plan assets exceeded the present value of defined benefit obligations.

2) Changes in present value of defined benefit obligations for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Defined benefit obligations at the beginning of period	￦	1,714,115			1,733,020
Current service costs		285,706			209,612
Interest costs		39,286			35,830
Remeasurements:		(32,927	)		51,994
— Gain from change in financial assumptions		(72,910	)		(50,218	)
— Loss (gain) from change in demographic assumptions		(4,140	)		15,952
— Others		44,123			86,260
Benefits paid		(278,278	)		(185,220	)
Others		5,118			(2,101	)
Defined benefit obligations at the end of period	￦	1,733,020			1,843,135

3) Changes in fair value of plan assets for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Fair value of plan assets at the beginning of period	￦	1,532,090			1,693,118
Interest on plan assets		37,385			45,516
Remeasurement of plan assets		(6,963	)		(17,190	)
Contributions to plan assets		328,671			164,828
Benefits paid		(189,817	)		(168,643	)
Others		(8,248	)		(3,463	)
Fair value of plan assets at the end of period	￦	1,693,118			1,714,166

The Company expects to make an estimated contribution of ￦164,865 million to the defined benefit plan assets in 2018.

4) The fair value of plan assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Equity instruments	￦	56,187		41,218
Debt instruments		411,726		367,027
Deposits		1,167,475		1,254,571
Others		57,730		51,350
	￦	1,693,118		1,714,166

5) The amounts recognized in consolidated statements of comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Current service costs	￦	239,508		285,706		209,612
Net interest costs (*1)		5,894		1,901		(9,686	)
	￦	245,402		287,607		199,926

(*1) The actual return on plan assets amounted to ￦32,630 million, ￦30,422 million and ￦28,326 million for the years ended December 31, 2015, 2016 and 2017, respectively.

The above expenses by function were as follows:

	2015		2016		2017
	(in millions of Won)
Cost of sales	￦	170,334		161,810		131,724
Selling and administrative expenses		74,210		124,994		67,424
Others		858		803		778
	￦	245,402		287,607		199,926

6) Accumulated actuarial gains (losses), net of tax recognized in other comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	(314,106	)		(272,152	)		(251,612	)
Current actuarial gains (losses)		41,954			20,540			(47,543	)
Ending	￦	(272,152	)		(251,612	)		(299,155	)

7) The principal actuarial assumptions as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(%)
Discount rate		2.15~8.59		2.70~7.75
Expected future increase in salaries (*1)		1.00~10.00		1.04~10.00

(*1) The expected future increase in salaries is based on the average salary increase rate for the past three years.

All assumptions are reviewed at the end of the reporting period. Additionally, the total estimated defined benefit obligation includes actuarial assumptions associated with the long-term characteristics of the defined benefit plan.

8) Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

	1% Increase						1% Decrease
	Amount			Percentage (%)			Amount			Percentage (%)
	(in millions of Won)
Discount rate	￦	(123,568	)		(6.7	)		138,196			7.5
Expected future increase in salaries		136,385			7.4			(124,400	)		(6.7	)

9) As of December 31, 2017 the maturity of the expected benefit payments are as follows:

	Within 1 year		1 year - 5 years		5 years - 10 years		10 years - 20 years		After  20 years		Total
	(in millions of Won)
Benefits paid	￦	109,212		613,786		792,792		655,599		347,280		2,518,669

The maturity analysis of the defined benefit obligation was nominal amounts of defined benefit obligations using expected remaining period of service of employees.

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Other Liabilities

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Other Liabilities

22. Other Liabilities

Other liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Due to customers for contract work	￦	1,031,663		782,968
Advances received		864,536		1,183,108
Unearned revenue		8,702		7,121
Withholdings		186,665		221,940
Firm commitment liability		—		12,192
Others		22,307		33,590
	￦	2,113,873		2,240,919
Non-current
Advances received		418,832		353,631
Unearned revenue		20,013		18,440
Others		40,338		14,360
	￦	479,183		386,431

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Financial Instruments

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Financial Instruments

23. Financial Instruments

(a) Classification of financial instruments

1) Financial assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Financial assets at fair value through profit or loss
Financial assets held for trading	￦	—		1,970
Derivatives assets held for trading		147,582		65,051
Derivatives assets designated as hedging instruments		—		3,239
Available-for-sale financial assets		2,514,924		1,978,115
Held-to-maturity financial assets		2,470		5,211
Loans and receivables		19,277,709		21,268,107
	￦	21,942,685		23,321,693

The Company applies fair value hedge which uses commodity futures as hedging instrument in order to hedge the risk of changes in fair value of product prices regarding fixed price sales or purchase commitments. Also, the Company applies cash flow hedge which uses currency swap as hedging instrument in order to hedge the risk of changes in cash flow from borrowings due to foreign currency fluctuations.

2) Financial liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Financial liabilities at fair value through profit or loss
Derivatives liabilities held for trading	￦	122,896		142,280
Derivatives liabilities designated as hedging instruments		—		13,230
Financial liabilities measured at amortized cost
Trade accounts and notes payable		4,117,798		3,477,678
Borrowings		22,704,998		21,063,657
Financial guarantee liabilities		108,161		88,407
Others		2,007,114		1,865,683
	￦	29,060,967		26,650,935

3) Finance income and costs by category of financial instrument for the years ended December 31, 2015, 2016 and 2017 were as follows:

① December 31, 2015

	Finance income and costs																					Other comprehensive loss
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total
	(in millions of Won)
Derivatives assets	￦	—			129,949			—			357,715			—			—			487,664			—
Available-for-sale financial assets		1,956			—			—			138,782			(142,781	)		183,712			181,669			(187,854	)
Held-to-maturity financial assets		456			—			—			—			—			(688	)		(232	)		—
Loans and receivables		207,781			—			283,030			(15,406	)		—			(217	)		475,188			—
Derivatives liabilities		—			(46,748	)		—			(334,340	)		—			—			(381,088	)		—
Financial liabilities measured at amortized cost		(788,772	)		—			(665,583	)		—			—			(138,827	)		(1,593,182	)		—
	￦	(578,579	)		83,201			(382,553	)		146,751			(142,781	)		43,980			(829,981	)		(187,854	)

② December 31, 2016

	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total			Other comprehensive income
	(in millions of Won)
Derivatives assets	￦	—			57,411			—			310,625			—			—			368,036			—
Available-for-sale financial assets		431			—			—			127,524			(248,404	)		41,000			(79,449	)		310,608
Held-to-maturity financial assets		266			—			—			—			—			38			304			—
Loans and receivables		181,778			—			140,751			(17,854	)		—			(172	)		304,503			—
Derivatives liabilities		—			(72,976	)		—			(332,415	)		—			—			(405,391	)		—
Financial liabilities measured at amortized cost		(658,726	)		—			(283,059	)		(61	)		—			(28,367	)		(970,213	)		—
	￦	(476,251	)		(15,565)			(142,308	)		87,819			(248,404	)		12,499			(782,210	)		310,608

③ December 31, 2017

	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total			Other comprehensive loss
	(in millions of Won)
Financial assets held for trading	￦	—			16			—			—			—			—			16			—
Derivatives assets		—			(99,942	)		—			206,362			—			—			106,420			(143	)
Available-for-sale financial assets		60			—			—			418,789			(123,214	)		92,961			388,596			(31,389	)
Held-to-maturity financial assets		236			—			—			—			—			7			243			—
Loans and receivables		212,155			—			(607,837	)		(32,456	)		—			(304	)		(428,442	)		—
Derivatives liabilities		—			(61,809	)		—			(231,908	)		—			—			(293,717	)		—
Financial liabilities measured at amortized cost		(653,115	)		—			777,935			—			—			(9,546	)		115,274			—
	￦	(440,664	)		(161,735	)		170,098			360,787			(123,214	)		83,118			(111,610	)		(31,532	)

(b) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the Company’s maximum exposure to credit risk. The maximum exposure to credit risk as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Cash and cash equivalents	￦	2,447,619		2,612,530
Financial assets held for trading		—		1,970
Derivative assets		147,582		68,290
Available-for-sale financial assets		51,649		192,866
Held-to-maturity financial assets		2,470		5,211
Loans and other receivables		7,104,940		9,099,444
Trade accounts and notes receivable, net		9,674,026		8,824,563
Long-term trade accounts and notes receivable, net		51,124		731,570
	￦	19,479,410		21,536,444

The Company provided financial guarantees for the repayment of loans of associates, joint ventures and third parties. As of December 31, 2016 and 2017, the maximum exposure to credit risk related to the financial guarantees amounted to ￦2,995,544 million and ￦3,135,084 million, respectively.

2) Impairment losses on financial assets

① Allowance for doubtful accounts as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Trade accounts and notes receivable	￦	558,125		634,129
Other accounts receivable		203,346		187,706
Loans		210,346		258,957
Other assets		5,954		13,672
	￦	977,771		1,094,464

② Impairment losses on financial assets for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Bad debt expenses on trade accounts and notes receivable	￦	165,150			173,694
Other bad debt expenses (*1)		50,225			100,920
Impairment loss on available-for-sale financial assets		248,404			123,214
Less: Recovery of allowance for other bad debt accounts		(12,658	)		(2,743	)
Less: Recovery of impairment loss on held-to-maturity financial assets		(38	)		(20	)
	￦	451,083			395,065

(*1) Other bad debt expenses are mainly related to other receivables and loans.

③ The aging and impairment losses of trade accounts and notes receivable as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Trade accounts and notes receivable		Impairment		Trade accounts and notes receivable		Impairment
	(in millions of Won)
Not due	￦	7,963,491		62,511		7,736,092		65,314
Over due less than 1 month		790,042		27,482		445,390		12,546
1 month – 3 months		205,394		8,955		170,682		742
3 months – 12 months		189,605		26,814		384,313		21,030
Over 12 months		1,134,743		432,363		1,453,785		534,497
	￦	10,283,275		558,125		10,190,262		634,129

④ The aging and impairment losses of other receivables as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Other receivables		Impairment		Other receivables		Impairment
	(in millions of Won)
Not due	￦	1,641,924		23,958		1,888,726		9,672
Over due less than 1 month		197,772		75,207		235,559		35,539
1 month – 3 months		27,525		1,189		69,372		54,335
3 months – 12 months		82,337		20,300		96,942		64,467
over 12 months		357,401		298,992		365,202		296,322
	￦	2,306,959		419,646		2,655,801		460,335

⑤ Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	954,153			999,678			977,771
Bad debt expenses		189,616			165,150			173,694
Other bad debt expenses		147,619			37,567			98,177
Others (*1)		(291,710	)		(224,624	)		(155,178	)
Ending	￦	999,678			977,771			1,094,464

(*1) Others for the year ended December 31, 2015 included a decrease of ￦199,003 million due to exclusion of POSCO PLANTEC Co., Ltd. from consolidation. Others for years ended December 31, 2016 and 2017, included decreases mainly due to write-off amounting to ￦216,657 million and ￦119,964 million, respectively.

(c) Liquidity risk

1) Contractual maturities for non-derivative financial liabilities, including estimated interest, are as follows:

	Book value		Contractual cash flow		Within 1 year		1 year - 5 years		After 5 years
	(in millions of Won)
Trade accounts and notes payable	￦	3,477,678		3,478,992		3,466,001		12,991		—
Borrowings		21,063,657		22,928,112		12,093,516		9,200,416		1,634,180
Financial guarantee liabilities (*1)		88,407		3,135,084		3,135,084		—		—
Other financial liabilities		1,865,683		1,874,667		1,721,004		153,663		—
	￦	26,495,425		31,416,855		20,415,605		9,367,070		1,634,180

(*1) For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

2) The maturity analysis of derivative financial liabilities is as follows:

	Within 1 year		1 year - 5 years		Total
	(in millions of Won)
Currency forward	￦	9,744		300		10,044
Currency futures		9,632		74,834		84,466
Currency swaps		25,553		10,504		36,057
Interest swaps		153		—		153
Other forwards		24,790		—		24,790
	￦	69,872		85,638		155,510

(d) Currency risk

1) The Company has exposure to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in foreign exchange rates. The exposure to currency risk as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Assets		Liabilities		Assets		Liabilities
	(in millions of Won)
USD	￦	5,007,649		6,636,065		4,215,151		5,940,380
EUR		463,110		550,235		552,630		454,072
JPY		45,975		821,403		165,356		709,318
Others		219,444		286,112		220,723		117,632

2) As of December 31, 2016 and 2017, provided that functional currency against foreign currencies other than functional currency hypothetically strengthens or weakens by 10%, the changes in gain or loss during the years ended December 31, 2016 and 2017 were as follows:

	2016					2017
	10% increase			10% decrease		10% increase			10% decrease
	(in millions of Won)
USD	￦	(162,842	)		162,842		(172,523	)		172,523
EUR		(8,713	)		8,713		9,856			(9,856	)
JPY		(77,543	)		77,543		(54,396	)		54,396

(e) Interest rate risk

1) The carrying amount of interest-bearing financial instruments as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Fixed rate
Financial assets	￦	8,650,483			10,943,300
Financial liabilities		(10,794,724	)		(11,179,635	)
		(2,144,241	)		(236,335	)
Variable rate
Financial liabilities	￦	(12,024,683)			(9,977,040	)

2) Sensitivity analysis on the fair value of financial instruments with fixed interest rate

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company does not designate derivatives (interest rate swaps) as hedging instruments under fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

3) Sensitivity analysis on the cash flows of financial instruments with variable interest rate

As of December 31, 2016 and 2017, provided that other factors remain the same and the interest rate of borrowings with floating rates increases or decreases by 1%, the changes in interest expense for the years ended December 31, 2016 and 2017 were as follows:

	2016				2017
	1% increase		1% decrease		1% increase			1% decrease
	(in millions of Won)
Variable rate financial instruments	￦	(120,247)		120,247		(99,770	)		99,770

(f) Fair value

1) Fair value and book value

The carrying amount and the fair value of financial instruments as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Book value		Fair value		Book value		Fair value
	(in millions of Won)
Financial assets measured at fair value
Available-for-sale financial assets (*1)	￦	2,139,687		2,139,687		1,506,893		1,506,893
Financial assets held for trading		—		—		1,970		1,970
Derivatives assets		147,582		147,582		68,290		68,290
		2,287,269		2,287,269		1,577,153		1,577,153
Financial assets measured at amortized cost (*2)
Cash and cash equivalents		2,447,619		2,447,619		2,612,530		2,612,530
Trade accounts and notes receivable, net		9,725,150		9,725,150		9,556,133		9,556,133
Loans and other receivables, net		7,104,940		7,104,940		9,099,444		9,099,444
Held-to-maturity financial assets		2,470		2,470		5,211		5,211
		19,280,179		19,280,179		21,273,318		21,273,318
Financial liabilities measured at fair value
Derivatives liabilities		122,896		122,896		155,510		155,510
Financial liabilities measured at amortized cost (*2)
Trade accounts and notes payable		4,117,798		4,117,798		3,477,678		3,477,678
Borrowings		22,704,998		22,956,571		21,063,657		21,217,415
Financial guarantee liabilities		108,161		108,161		88,407		88,407
Others		2,007,114		2,007,114		1,865,683		1,865,683
	￦	28,938,071		29,189,644		26,495,425		26,649,183

(*1) Available-for-sale financial assets which are not measured at fair value are not included.

(*2) The fair value of financial assets and liabilities measured at amortized cost is measured using discounted cash flow method, and the fair value is mainly calculated for the disclosures in the note. On the other hand, the Company has not performed fair value measurement for the financial assets and liabilities measured at amortized cost except borrowings which are classified as fair value hierarchy level 2 since their carrying amounts approximate fair value.

2) The fair values of financial assets and financial liabilities by fair value hierarchy as of December 31, 2016 and 2017 are as follows:

① December 31, 2016

	Level 1		Level 2		Level 3		Total
	(in millions of Won)
Financial assets
Available-for-sale financial assets	￦	1,800,943		—		338,744		2,139,687
Derivatives assets		—		137,236		10,346		147,582
		1,800,943		137,236		349,090		2,287,269
Financial liabilities
Derivatives liabilities	￦	—		122,896		—		122,896

② December 31, 2017

	Level 1		Level 2		Level 3		Total
	(in millions of Won)
Financial assets
Available-for-sale financial assets	￦	1,137,662		17,812		351,419		1,506,893
Financial assets held for trading		—		1,970		—		1,970
Derivatives assets		—		68,290		—		68,290
		1,137,662		88,072		351,419		1,577,153
Financial liabilities
Derivatives liabilities	￦	—		155,510		—		155,510

3) Financial assets and financial liabilities classified as fair value hierarchy level 2

Fair values of derivatives are measured using the derivatives instrument valuation model such as discounted cash flow method and others. Inputs of the financial instrument valuation model include forward rate, interest rate and others. It may change depending on the type of derivatives and the nature of the underlying assets.

4) Financial assets and financial liabilities classified as fair value hierarchy level 3

① Value measurement method and significant but not observable inputs for the financial assets classified as fair value hierarchy level 3 as of December 31, 2017 are as follows:

	Fair value		Valuation technique	Inputs	Range of inputs	Effect on fair value assessment with unobservable input
	(in millions of Won)
Available-for-sale financial assets	￦	235,803	Discounted cash flows	Growth rate	0% ~ 2.0%	As growth rate increases, fair value increases
				Discount rate	0.5% ~ 11.9%	As discount rate increases, fair value decreases
		14,775	Market comparable companies	Price multiple	1.085 ~ 5.245	As price multiple increases, fair value increases
		100,841	Asset value approach	—	—	—

② Sensitivity analysis of financial assets and financial liabilities classified as Level 3 of fair value hierarchy

If other inputs remain constant as of December 31, 2017 and one of the significant but not observable input is changed, the effect on fair value measurement is as follows:

	Input variable	Favorable changes		Unfavorable changes
	(in millions of Won)
Available-for-sale financial assets	Fluctuation 0.5% of growth rate	￦	5,713		4,641
	Fluctuation 0.5% of discount rate		27,238		22,724

③ Changes in fair value of financial assets and financial liabilities classified as Level 3 for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Beginning	￦	466,407			349,090
Acquisition and others		47,493			129,766
Gain (loss) on valuations of derivatives		(59,829	)		(10,346	)
Other comprehensive income (loss)		(38,731	)		35,126
Impairment		(19,111	)		(107,934	)
Disposal and others		(47,139	)		(44,283	)
Ending	￦	349,090			351,419

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Share Capital and Capital Surplus

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Share Capital and Capital Surplus

24. Share Capital and Capital Surplus

(a) Share capital as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(Share, in Won)
Authorized shares		200,000,000		200,000,000
Par value	￦	5,000		5,000
Issued shares(*1)		87,186,835		87,186,835
Shared capital(*2)	￦	482,403,125,000		482,403,125,000

(*1) As of December 31, 2017, total shares of ADRs of 36,840,292 outstanding in overseas stock market are equivalent to 9,210,073 of common stock.

(*2) As of December 31, 2017, the difference between the ending balance of common stock and the par value of issued common stock is ￦46,469 million due to retirement of 9,293,790 treasury stocks.

(b) The changes in issued common stock for the years ended December 31, 2016 and 2017 were as follows:

	2016							2017
	Issued  shares		Treasury  shares			Number of outstanding shares		Issued  shares		Treasury  shares			Number of outstanding shares
	(share)
Beginning		87,186,835		(7,191,187	)		79,995,648		87,186,835		(7,189,170	)		79,997,665
Disposal of treasury shares		—		2,017			2,017		—		1,939			1,939
Ending		87,186,835		(7,189,170	)		79,997,665		87,186,835		(7,187,231	)		79,999,604

(c) Capital surplus as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Share premium	￦	463,825		463,825
Gain on disposal of treasury shares		783,788		783,914
Other capital deficit		159,634		174,282
	￦	1,407,247		1,422,021

(d) During the year ended December 31, 2017, POSCO ENERGY CO., LTD., a subsidiary of the Company, issued redeemable convertible preferred shares which are classified as non-controlling interests in the consolidated financial statements. The details of redeemable convertible preferred shares as of December 31, 2017 are as follows:

	Redeemable Convertible Preferred Shares
	(Share, in Won)
Issue date	February 25, 2017
Number of shares issued	8,643,193 shares
Price per share	￦28,346
Voting rights	No voting rights for 3 years from issue date
Dividend rights	Comparative, Non-participating · Minimum dividend rate for 1~3 years: 3.98% · Minimum dividend rate after 4 years: Comparative rate + Issuance spread + 2%
Details about Redemption	Issuer can demand redemption of all or part of redeemable convertible preferred shares every year after the issue date, for a period of 10 years from the issue date.
Details about Conversion	Stockholders of redeemable convertible preferred shares can convert them to common shares from 3 years after the issue date to the end of the redemption period (10 years). Conversion price is equal to issue price, which could be adjusted according to anti-dilution clause.

Redeemable convertible preferred stocks are classified as non-controlling interests in the consolidated financial statements since the issuer has a redemption right and can control the circumstances in which the entity can settle with a variable quantity of equity instruments.

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Hybrid Bonds

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Hybrid Bonds

25. Hybrid Bonds

(a) Hybrid bonds classified as equity as of December 31, 2016 and 2017 are as follows:

	Date of issue		Date of maturity		Interest rate (%)		2016			2017
	(in millions of Won)
Hybrid bond 1-1 (*1)		2013-06-13		2043-06-13		4.30	￦	800,000			800,000
Hybrid bond 1-2 (*1)		2013-06-13		2043-06-13		4.60		200,000			200,000
Issuance cost								(3,081	)		(3,081	)
							￦	996,919			996,919

(*1) Details of hybrid bonds as of December 31, 2017 are as follows:

	Hybrid bond 1-1	Hybrid bond 1-2
	(in millions of Won)
Issue price	800,000	200,000
Maturity date	30 years (POSCO has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-06-12: 4.3%  Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.3% · After 10 years: additionally +0.25% according to Step-up clauses  · After 25 years: additionally +0.75%	Issue date ~ 2023-06-12: 4.6% Reset every 10 years as follows; · After 10 years: return on government bond (10 years) + 1.4% · After 10 years: additionally +0.25% according to Step-up clauses  · After 30 years: additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to POSCO)
Others	POSCO can call the hybrid bond at year 5 and interest payment date afterwards	POSCO can call the hybrid bond at year 10 and interest payment date afterwards

The hybrid bond holders’ preference in the event of liquidation is higher than the common stock holders, but lower than other creditors. The interest accumulated but not paid on the hybrid bonds as of December 31, 2017 amounts to ￦2,389 million.

(b) POSCO ENERGY CO., LTD., a subsidiary of the Company, issued hybrid bonds, which are classified as non-controlling interests in the consolidated financial statements. Hybrid bonds as of December 31, 2016 and 2017 are as follows:

	Date of issue		Date of maturity		Interest rate (%)		2016			2017
	(in millions of Won)
Hybrid bond 1-1 (*1)		2013-08-29		2043-08-29		4.66	￦	165,000			165,000
Hybrid bond 1-2 (*1)		2013-08-29		2043-08-29		4.72		165,000			165,000
Hybrid bond 1-3 (*1)		2013-08-29		2043-08-29		4.72		30,000			30,000
Hybrid bond 1-4 (*1)		2013-08-29		2043-08-29		5.21		140,000			140,000
Issuance cost								(1,532	)		(1,532	)
							￦	498,468			498,468

(*1) Details of issuance of hybrid bonds of POSCO ENERGY CO., LTD. as of December 31, 2017 are as follows:

	Hybrid bond 1-1	Hybrid bond 1-2 and 1-3	Hybrid bond 1-4
	(in millions of Won)
Issue price	165,000	195,000	140,000
Maturity date	30 years (The Company has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-08-29: 4.66% Reset every 5 years as follows;	Issue date ~ 2018-08-29: 4.72% Reset every 5 years as follows;	Issue date ~ 2023-08-29: 5.21% Reset every 10 years as follows;
	· After 5 years: return on government bond (5 years) + 1.39%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	· After 5 years: return on government bond (5 years) + 1.45%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	· After 10 years: return on government bond (10 years) + 1.55%· After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company but for hybrid bond 1-3, the Company pays every quarter(3/30, 6/30, 9/30, 12/30))
Others	The issuer can call the hybrid bond at year 5 and interest payment date afterwards		The issuer can call the hybrid bond at year 10 and interest payment date afterwards

The hybrid bond holders’ preference in the event of liquidation is higher than the common stock holders, but lower than other creditors. The interest accumulated but not paid on the hybrid bonds as of December 31, 2017 amounts to ￦2,004 million.

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Reserves

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Reserves

26. Reserves

(a) Reserves as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Accumulated comprehensive loss of investments in associates and joint ventures	￦	(301,734	)		(516,528	)
Changes in the unrealized fair value of available-for-sale investments		276,143			230,190
Currency translation differences		(99,264	)		(372,166	)
Gain or losses on valuation of derivatives		—			(136	)
Others		(19,130	)		(23,916	)
	￦	(143,985	)		(682,556	)

(b) Changes in the unrealized fair value of available-for-sale investments for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Beginning balance	￦	(38,294	)		276,143
Changes in the unrealized fair value of available-for-sale investments		218,542			183,761
Reclassification to profit or loss upon disposal		(88,781	)		(299,862	)
Impairment of available-for-sale investments		187,108			96,083
Others		(2,432	)		(25,935	)
Ending balance	￦	276,143			230,190

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Treasury Shares

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Treasury Shares

27. Treasury Shares

Based on the Board of Directors’ resolution, the Company holds treasury shares for business purposes including price stabilization. The changes in treasury shares for the years ended December 31, 2016 and 2017 were as follows:

	2016						2017
	Number of shares			Amount			Number of shares			Amount
	(shares, in millions of Won)
Beginning		7,191,187		￦	1,533,898			7,189,170		￦	1,533,468
Disposal of treasury shares		(2,017	)		(430	)		(1,939	)		(414	)
Ending		7,189,170		￦	1,533,468			7,187,231		￦	1,533,054

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Revenue

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Revenue

28. Revenue

Details of revenue for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Sale of goods	￦	47,018,466		43,683,169		51,357,709
Services		2,489,447		2,276,534		2,064,583
Construction revenue		8,546,454		6,497,723		6,299,483
Rental income		11,757		8,930		6,370
Others		456,144		473,415		458,722
	￦	58,522,268		52,939,771		60,186,867

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Construction Contracts

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Construction Contracts

29. Construction Contracts

(a) Details of in-progress construction contracts as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Aggregate amount of costs incurred	￦	22,012,241			21,404,321
Add: Recognized profits		1,429,555			1,524,208
Less: Recognized losses		(1,139,165	)		(718,593	)
Cumulative construction revenue		22,302,631			22,209,936
Less: Progress billing		(22,483,968	)		(22,265,891	)
Others		9,961			994
	￦	(171,376	)		(54,961	)

(b) Details of due from customers for contract work and due to customers for contract work related to construction as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Unbilled due from customers for contract work	￦	860,287			728,007
Due to customers for contract work		(1,031,663	)		(782,968	)
	￦	(171,376	)		(54,961	)

(c) Due to the factors causing the variation of costs for the years ended December 31, 2016 and 2017, the estimated total contract costs have changed. Details of changes in estimated total contract costs and the impact on profit before income taxes for the years ended December 31, 2016, 2017 and future periods are as follows:

	2016			2017
	(in millions of Won)
Changes in estimated total contract costs	￦	532,801			164,812
Changes in profit before income taxes of construction contract:
- Current period		(790,391	)		(69,656	)
- Future periods		69,464			(6,041	)

The effect on the current and future profit is estimated based on the circumstances that have occurred from the commencement date of the contract to the end of period. The estimation is evaluated for the total contract costs and expected total contract revenue as of the end of the period. Also, it may change during future periods.

(d) Uncertainty of estimates

1) Total contract revenues

Total contract revenues are measured based on contractual amount initially agreed. However, the contract revenues can increase due to additional contract work, claims and incentive payments in the course of construction, or decrease due to penalty when the completion of contract is delayed due to the Company’s fault. Therefore, this measurement of contract revenues is affected by the uncertainty of the occurrence of future events.

2) Total contract costs

Construction revenues are recognized based on the percentage of completion, which is measured on the basis of the gross amount incurred to date. Total contract costs are estimated based on estimates of future material costs, labor costs, outsourcing cost and others. There is uncertainty in future estimates due to various internal and external factors such as fluctuation of market, the risk of business partner and the experience of project performance and others. The significant assumptions including uncertainty of the estimate of total contract costs are as follows:

	Method of significant assumption
Material cost	Assumption based on recent purchasing price and quoted market price
Labor cost	Assumption based on standard monthly and daily labor cost
Outsourcing cost	Assumption based on the past experience rate of similar project and market price

Management reviews the assumptions used in estimated contract costs at each reporting period end and adjusts them, if necessary.

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Selling and Administrative Expenses

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Selling and Administrative Expenses

30. Selling and Administrative Expenses

(a) Administrative expenses

Administrative expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Wages and salaries	￦	810,851		769,589		774,900
Expenses related to post-employment benefits		87,293		200,956		78,654
Other employee benefits		193,967		176,794		159,920
Travel		48,426		40,828		39,790
Depreciation		105,470		103,442		97,261
Amortization		168,525		139,569		146,314
Communication		12,502		11,186		11,740
Electricity expenses		9,573		7,527		7,050
Taxes and public dues		74,315		78,895		72,826
Rental		119,836		82,005		69,976
Repairs		11,677		11,316		9,859
Entertainment		15,740		13,157		11,582
Advertising		90,698		86,141		119,724
Research & development		135,508		120,608		125,795
Service fees		218,751		201,129		193,387
Vehicles maintenance		10,756		10,090		8,211
Industry association fee		12,603		13,468		10,140
Conference		16,053		13,108		14,494
Increase to provisions		14,900		6,532		10,990
Bad debt expenses		189,616		165,150		173,694
Others		48,188		40,050		40,493
	￦	2,395,248		2,291,540		2,176,800

(b) Selling expenses

Selling expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Freight and custody expenses	￦	1,531,906		1,342,009		1,336,969
Operating expenses for distribution center		11,021		10,315		10,503
Sales commissions		80,165		94,377		115,925
Sales advertising		3,220		5,117		3,800
Sales promotion		22,443		10,670		12,414
Sample		2,576		2,335		1,989
Sales insurance premium		30,682		31,379		36,546
Contract cost		38,425		49,480		23,061
Others		8,518		8,004		16,070
	￦	1,728,956		1,553,686		1,557,277

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Research and Development Expenditures Recognized as Expenses

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Research and Development Expenditures Recognized as Expenses

31. Research and Development Expenditures Recognized as Expenses

Research and development expenditures recognized as expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Administrative expenses	￦	135,508		120,608		125,795
Cost of sales		356,173		324,190		361,093
	￦	491,681		444,798		486,888

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Other Operating Income and Expenses

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Other Operating Income and Expenses

32. Other Operating Income and Expenses

Details of other operating income and expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Other operating income
Gain on disposal of assets held for sale	￦	227,956			23,112			1,180
Gain on disposal of investments in subsidiaries, associates and joint ventures		88,718			23,305			81,794
Gain on disposal of property, plant and equipment		22,730			23,826			32,145
Gain on disposal of intangible assets		1,432			671			23,391
Recovery of allowance for other doubtful accounts		10,452			12,658			2,743
Gain on valuation of firm commitment		—			—			56,301
Rental revenues		1,019			1,771			1,498
Gain on insurance proceeds		14,976			22,400			5,878
Others (*1)		181,765			107,393			246,294
	￦	549,048			215,136			451,224
Other operating expenses
Impairment losses on assets held for sale	￦	(133,547	)		(24,890	)		—
Loss on disposal of assets held for sale		(190,357	)		(254	)		(608	)
Loss on disposal of investments in subsidiaries, associates and joint ventures		(18,996	)		(22,499	)		(19,985	)
Loss on disposal of property, plant and equipment		(101,732	)		(86,622	)		(151,343	)
Impairment losses on property, plant and equipment		(136,269	)		(196,882	)		(117,231	)
Impairment losses on goodwill and intangible assets		(161,412	)		(127,875	)		(167,995	)
Other bad debt expenses		(158,071	)		(50,225	)		(100,920	)
Loss on valuation of firm commitment		—			—			(43,164	)
Idle tangible asset expenses		(12,773	)		(6,437	)		(10,490	)
Incease to provisions		(18,396	)		(53,058	)		(33,964	)
Donations		(62,957	)		(43,810	)		(51,424	)
Others (*2)		(447,788	)		(143,168	)		(95,172	)
	￦	(1,442,298	)		(755,720	)		(792,296	)

(*1) The Company recognized the refund of VAT and others amounting to ￦160,501 million as other operating income for the year ended December 31, 2017, based on the result of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years tax audits for rectification were finalized.

(*2) The Company paid ￦299,037 million in connection with its settlement with Nippon Steel & Sumitomo Metal Corporation for a civil lawsuit regarding improperly acquired trade secrets and patents for the year ended December 31, 2015.

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Finance Income and Costs

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Finance Income and Costs

33. Finance Income and Costs

Details of finance income and costs for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Finance income
Interest income	￦	210,193			182,475			212,451
Dividend income		183,712			41,000			92,962
Gain on foreign currency transactions		1,025,240			1,032,552			785,616
Gain on foreign currency translations		466,090			377,723			564,016
Gain on derivatives transactions		366,482			316,524			210,727
Gain on valuations of derivatives		155,334			147,111			64,735
Gain on disposals of available-for-sale financial assets		139,136			130,830			425,684
Others		10,886			3,765			16,476
	￦	2,557,073			2,231,980			2,372,667
Finance costs
Interest expenses	￦	(788,772	)		(658,726	)		(653,115	)
Loss on foreign currency transactions		(1,157,161	)		(1,147,192	)		(756,654	)
Loss on foreign currency translations		(716,722	)		(405,391	)		(422,880	)
Loss on derivatives transactions		(343,118	)		(338,314	)		(236,273	)
Loss on valuation of derivatives		(72,133	)		(162,676	)		(226,487	)
Impairment loss on available-for-sale financial assets		(142,781	)		(248,404	)		(123,214	)
Others		(166,367	)		(53,487	)		(65,654	)
	￦	(3,387,054	)		(3,014,190	)		(2,484,277	)

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Expenses by Nature

12 Months Ended

Dec. 31, 2017

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Expenses by Nature

34. Expenses by Nature

Expenses that are recorded by nature as cost of sales, selling and administrative expenses and other operating expenses in the statements of comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows (excluding finance costs and income tax expense):

	2015		2016		2017
	(in millions of Won)
Raw material used, changes in inventories and others	￦	33,939,108		30,177,732		35,584,184
Employee benefits expenses (*2)		3,472,295		3,444,276		3,357,861
Outsourced processing cost		8,681,271		7,678,055		7,074,948
Electricity expenses		1,251,546		1,018,429		933,045
Depreciation (*1)		2,836,663		2,835,843		2,887,646
Amortization		381,583		378,004		409,774
Freight and custody expenses		1,531,906		1,342,009		1,336,969
Sales commissions		80,165		94,377		115,925
Loss on disposal of property, plant and equipment		101,732		86,622		151,343
Impairment loss on property, plant and equipment		136,269		196,882		117,231
Impairment loss on goodwill and intangible assets		161,412		127,875		167,995
Increase to provisions		86,903		189,914		215,383
Donations		62,957		43,810		51,424
Other expenses		4,861,126		3,258,583		4,038,242
	￦	57,584,936		50,872,411		56,441,970

(*1) Includes depreciation expense of investment property.

(*2) The details of employee benefits expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Wages and salaries	￦	3,186,237		3,016,488		3,105,364
Expenses related to post-employment benefits		286,058		427,788		252,497
	￦	3,472,295		3,444,276		3,357,861

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Income Taxes

12 Months Ended

Dec. 31, 2017

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Income Taxes

35. Income Taxes

(a) Income tax expense for the years ended December 31, 2015, 2016 and 2017 was as follows:

	2015			2016			2017
	(in millions of Won)
Current income taxes	￦	553,041			699,269			864,143
Deferred income tax due to temporary differences		(253,860	)		(209,706	)		300,037
Items recorded directly in equity		(32,621	)		(110,019	)		21,560
Income tax expense	￦	266,560			379,544			1,185,740

(b) The income taxes credited (charged) directly to equity for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Net changes in the unrealized fair value of available-for-sale investments	￦	60,077			(100,550	)		1,271
Loss (gain) on sale of treasury shares		12			(10	)		(40	)
Other capital surplus		(86,765	)		—			—
Others		(5,945	)		(9,459	)		20,329
	￦	(32,621	)		(110,019	)		21,560

(c) The following table reconciles the calculated income tax expense based on POSCO’s statutory rate (24.2%) to the actual amount of taxes recorded by the Company for the years ended December 31, 2015, 2016 and 2017.

	2015			2016			2017
	(in millions of Won)
Profit before income tax expense	￦	150,345			1,411,609			4,095,051
Income tax expense computed at statutory rate		35,921			341,148			990,540
Adjustments:
Tax credits		(152,139	)		(30,124	)		(40,757	)
Over provisions from prior years		(47,053	)		(11,829	)		(20,912	)
Investment in subsidiaries, associates and joint ventures		439,575			76,751			55,113
Tax effects due to permanent differences		(26,045	)		(9,962	)		4,798
Effect of tax rate change (*1)		—			—			175,647
Others		16,301			13,560			21,311
		230,639			38,396			195,200
Income tax expense	￦	266,560			379,544			1,185,740
Effective tax rate (%)		177.30	%		26.89	%		28.96	%

(*1) During the year ended December 31, 2017, the statutory rate changed from 24.2% to 27.5% for taxable income in excess of ￦300,000 million was enacted as a result of a revision to Korean tax law, which will be effective from 2018.

(d) The movements in deferred tax assets (liabilities) for the years ended December 31, 2016 and 2017 were as follows:

	2016									2017
	Beginning			Inc. (Dec.)			Ending			Beginning			Inc. (Dec.)			Ending
	(in millions of Won)
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	202,592			10,527			213,119			213,119			60,875			273,994
Reserve for technology developments		(177,676	)		85,716			(91,960	)		(91,960	)		53,973			(37,987	)
PP&E — Depreciation		(15,240	)		3,601			(11,639	)		(11,639	)		26,280			14,641
Share of profit or loss of equity-accounted investees		(45,174	)		115,433			70,259			70,259			125,783			196,042
Allowance for inventories valuation		13,373			2,278			15,651			15,651			(4,871	)		10,780
PP&E — Revaluation		(1,393,501	)		(130,648	)		(1,524,149	)		(1,524,149	)		(304,015	)		(1,828,164	)
Prepaid expenses		19,180			485			19,665			19,665			335			20,000
PP&E — Impairment loss		8,055			(2,760	)		5,295			5,295			245			5,540
Gain or loss on foreign currency translation		(29,355	)		23,398			(5,957	)		(5,957	)		(42,515	)		(48,472	)
Defined benefit obligations		354,175			7,663			361,838			361,838			68,279			430,117
Plan assets		(287,839	)		(28,686	)		(316,525	)		(316,525	)		(36,129	)		(352,654	)
Provision for construction losses		612			385			997			997			(556	)		441
Provision for construction warranty		21,604			2,718			24,322			24,322			4,395			28,717
Accrued income		(8,982	)		(459	)		(9,441	)		(9,441	)		(3,474	)		(12,915	)
Impairment loss on AFS		266,474			(21,306	)		245,168			245,168			(42,373	)		202,795
Difference in acquisition costs of treasury shares		62,116			(17	)		62,099			62,099			8,448			70,547
Others		296,207			107,541			403,748			403,748			(27,740	)		376,008
		(713,379	)		175,869			(537,510	)		(537,510	)		(113,060	)		(650,570	)
Deferred income taxes recognized directly to equity
Loss (gain) on valuation of available-for-sale investments		50,043			(100,550	)		(50,507	)		(50,507	)		1,271			(49,236	)
Others		61,291			(9,459	)		51,832			51,832			20,329			72,161
		111,334			(110,009	)		1,325			1,325			21,600			22,925
Deferred tax from tax credit
Tax credit carry-forward and others		277,261			30,074			307,335			307,335			(189,303	)		118,032
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		(18,089	)		104,219			86,130			86,130			(17,704	)		68,426
	￦	(342,873	)		200,153			(142,720	)		(142,720	)		(298,467	)		(441,187	)

(e) Deferred tax assets and liabilities as of December 31, 2016 and 2017 are as follows:

	2016								2017
	Assets		Liabilities			Net			Assets		Liabilities			Net
	(in millions of Won)
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	213,119		—			213,119			273,994		—			273,994
Reserve for technology developments		—		(91,960	)		(91,960	)		—		(37,987	)		(37,987	)
PP&E — Depreciation		50,843		(62,482	)		(11,639	)		59,912		(45,271	)		14,641
Share of profit or loss of equity-accounted investees		178,538		(108,279	)		70,259			236,637		(40,595	)		196,042
Allowance for inventories valuation		15,651		—			15,651			10,780		—			10,780
PP&E — Revaluation		—		(1,524,149	)		(1,524,149	)		—		(1,828,164	)		(1,828,164	)
Prepaid expenses		19,665		—			19,665			20,000		—			20,000
PP&E — Impairment loss		5,397		(102	)		5,295			5,639		(99	)		5,540
Gain or loss on foreign currency translation		99,836		(105,793	)		(5,957	)		113,760		(162,232	)		(48,472	)
Defined benefit obligations		361,838		—			361,838			430,117		—			430,117
Plan assets		—		(316,525	)		(316,525	)		—		(352,654	)		(352,654	)
Provision for construction losses		997		—			997			441		—			441
Provision for construction warranty		24,322		—			24,322			28,717		—			28,717
Accrued income		—		(9,441	)		(9,441	)		—		(12,915	)		(12,915	)
Impairment loss on AFS		245,168		—			245,168			202,795		—			202,795
Difference in acquisition costs of treasury shares		62,099		—			62,099			70,547		—			70,547
Others		452,425		(48,677	)		403,748			473,025		(97,017	)		376,008
		1,729,898		(2,267,408	)		(537,510	)		1,926,364		(2,576,934	)		(650,570	)
Deferred income taxes recognized directly to equity
Loss (gain) on valuation of available-for-sale investments		50,245		(100,752	)		(50,507	)		110,865		(160,101	)		(49,236	)
Others		65,532		(13,700	)		51,832			92,981		(20,820	)		72,161
		115,777		(114,452	)		1,325			203,846		(180,921	)		22,925
Deferred tax from tax credit
Tax credit carry-forward and others		307,335		—			307,335			118,032		—			118,032
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		561,506		(475,376	)		86,130			563,406		(494,980	)		68,426
	￦	2,714,516		(2,857,236	)		(142,720	)		2,811,648		(3,252,835	)		(441,187	)

(f) As of December 31, 2016 and 2017, The Company did not recognize income tax effects associated with deductible temporary differences of ￦4,612,900 million and ￦5,300,667 million, respectively, mainly relating to loss of subsidiaries and associates because realization is not considered probable. As of December 31, 2016 and 2017, the Company did not recognize income tax effects associated with taxable temporary differences of ￦3,933,428 million and ￦4,362,127 million (deferred tax liabilities of￦951,890 million and ￦1,137,632 million), respectively, mainly relating to increase in retained earnings of subsidiaries since it is probable that the temporary difference will not reverse in the foreseeable future.

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Earnings per Share

12 Months Ended

Dec. 31, 2017

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Earnings per Share

36. Earnings per Share

Basic and diluted earnings per share for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in Won, except per share information)
Profit attribute to controlling interest	￦	171,493,811,117			1,354,806,734,940			2,756,230,487,872
Interests of hybrid bonds		(33,029,632,499	)		(33,225,163,081	)		(33,048,799,997	)
Weighted-average number of common shares outstanding (*1)		79,993,834			79,996,389			79,998,600
Basic and diluted earnings per share	￦	1,731			16,521			34,040

(*1) The weighted-average number of common shares used to calculate basic and diluted earnings per share are as follows:

(shares)	2015			2016			2017
Total number of common shares issued		87,186,835			87,186,835			87,186,835
Weighted-average number of treasury shares		(7,193,001	)		(7,190,446	)		(7,188,235	)
Weighted-average number of common shares outstanding		79,993,834			79,996,389			79,998,600

Since there were no potential shares of common stock which had dilutive effects as of December 31, 2015, 2016 and 2017, diluted earnings per share is equal to basic earnings per share.

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Related Party Transactions

12 Months Ended

Dec. 31, 2017

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Related Party Transactions

37. Related Party Transactions

(a) Significant transactions between the controlling company and related parties for the years ended December 31, 2015, 2016 and 2017 were as follows:

1) For the year ended December 31, 2015

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	4,441		145		19		427,760		2,250		37,488
POSCO Processing & Service		1,074,826		24		437,626		—		—		2,281
POSCO COATED & COLOR STEEL Co., Ltd.		380,626		—		—		—		9,359		104
POSCO ICT (*3)		1,259		7		—		210,877		29,612		182,745
eNtoB Corporation		—		—		261,989		6,501		130		22,017
POSCO CHEMTECH		436,594		30,343		519,956		9,515		297,183		1,773
POSCO ENERGY CO., LTD.		188,458		1,359		—		—		—		6
POSCO TMC Co., Ltd.		263,242		—		—		—		1,497		1,560
POSCO AST		362,658		15		4,115		—		39,175		1,611
POSHIMETAL Co., Ltd.		10,777		151		145,165		—		—		46
POSCO DAEWOO Corporation		3,505,187		34,334		46,675		—		—		480
SeAH Changwon Integrated Special Steel (*4)		2,811		176,904		8,239		—		515		75
POSCO PLANTEC Co., Ltd. (*4)		4,280		33		2,544		125,192		15,135		13,649
POSCO Thainox Public Company Limited		268,576		10		5,147		—		—		34
POSCO America Corporation		624,549		6		—		—		—		725
POSCO Canada Ltd.		—		—		111,243		—		—		—
POSCO Asia Co., Ltd.		1,822,932		960		269,086		—		513		2,273
Qingdao Pohang Stainless Steel Co., Ltd.		118,845		—		—		—		—		220
POSCO JAPAN Co., Ltd.		1,051,910		9,383		25,957		2,278		201		2,754
POSCO MEXICO S.A. DE C.V.		270,184		80		—		—		—		11
PT. KRAKATAU POSCO		—		—		118,888		—		—		—
POSCO Maharashtra Steel Private Limited		421,244		752		—		—		—		31
Others (*5)		867,334		14,474		223,393		113,769		212,539		129,506
		11,680,733		268,980		2,180,042		895,892		608,109		399,389
Associates and joint ventures
SeAH Changwon Integrated Special Steel (*4)		6,042		—		3,802		—		419		—
POSCO PLANTEC Co., Ltd. (*4)		147		14		1,017		82,338		3,513		4,676
SNNC		4,673		594		422,420		—		—		—
POSCO-SAMSUNG-Slovakia Processing center		26,379		—		—		—		—		—
Others (*6,7)		28,841		40,600		51,855		—		—		—
		66,082		41,208		479,094		82,338		3,932		4,676
	￦	11,746,815		310,188		2,659,136		978,230		612,041		404,065

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*4) During the year ended December 31, 2015, it was reclassified from a subsidiary to an associate.

(*5) During the year ended December 31, 2015, the Company borrowed USD 17.42 million from POSCO-Uruguay S.A., a subsidiary of the Company, and the entire amount was repaid as of December 31, 2015.

(*6) During the year ended December 31, 2015, the Company lent USD 60 million to CSP-Compania Siderurgica do Pecem, an associate of the Company, and the entire amount of loan was collected as of December 31, 2015.

(*7) The Company has collected loans of USD 3.85 million from LLP POSUK Titanium, an associate of the Company for the year ended December 31, 2015

2) For the year ended December 31, 2016

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	29,511		16,661		8		183,768		—		24,511
POSCO Processing & Service		1,212,220		5,778		549,803		2,896		22,704		2,445
POSCO COATED & COLOR STEEL Co., Ltd.		326,078		2,560		—		—		12,232		126
POSCO ICT (*3)		1,224		727		—		219,301		32,456		171,107
eNtoB Corporation		—		5		278,016		9,836		212		19,436
POSCO CHEMTECH		319,164		33,784		502,448		14,847		290,427		5,139
POSCO ENERGY CO., LTD.		187,311		1,382		—		—		—		7
POSCO TMC Co., Ltd. (*4)		219,489		—		2		—		863		1,177
POSCO AST (*4)		152,098		1		—		—		19,695		922
POSCO DAEWOO Corporation		3,227,716		34,341		92,203		—		343		—
POSCO Thainox Public Company Limited		237,471		2,915		9,593		—		19		548
POSCO America Corporation		469,543		—		284		—		—		1,103
POSCO Canada Ltd.		275		—		148,528		—		—		—
POSCO Asia Co., Ltd.		1,758,080		1,373		403,174		247		939		3,602
Qingdao Pohang Stainless Steel Co., Ltd.		135,405		—		—		—		—		525
POSCO JAPAN Co., Ltd.		1,112,489		128		23,217		3,744		345		3,841
POSCO-VIETNAM Co., Ltd.		226,063		445		—		—		—		—
POSCO MEXICO S.A. DE C.V.		274,210		462		—		—		—		—
POSCO Maharashtra Steel Private Limited		355,829		2,613		—		—		—		93
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		149,911		—		—		—		—		—
Others		766,263		22,717		207,601		62,202		212,344		145,562
		11,160,350		125,892		2,214,877		496,841		592,579		380,144
Associates and joint ventures
SeAH Changwon Integrated Special Steel		28		—		1,095		—		627		—
POSCO PLANTEC Co., Ltd.		2,245		48		3,533		244,898		16,812		8,146
SNNC		6,004		1,042		487,395		—		—		2
POSCO-SAMSUNG-Slovakia Processing center		44,686		—		—		—		—		—
KOBRASCO		—		29,297		—		—		—		—
Others		26,625		13,122		175,246		—		—		—
		79,588		43,509		667,269		244,898		17,439		8,148
	￦	11,239,938		169,401		2,882,146		741,739		610,018		388,292

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*4) During the year ended December 31, 2016, it was merged into POSCO Processing & Service.

3) For the year ended December 31, 2017

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries (*3)
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	3,328		71		—		151,639		32		18,352
POSCO Processing & Service		298,781		1		113,628		4,595		8,309		404
POSCO COATED & COLOR STEEL Co., Ltd.		417,369		3,533		—		—		8,483		106
POSCO ICT (*4)		1,697		5,097		—		315,748		29,773		183,226
eNtoB Corporation		1		30		330,921		8,215		139		26,023
POSCO CHEMTECH		359,862		33,076		479,896		23,043		296,296		6,860
POSCO ENERGY CO., LTD.		179,966		1,456		—		—		—		2
POSCO DAEWOO Corporation		5,214,127		35,182		550,258		221		44,108		1,948
POSCO Thainox Public Company Limited		218,005		9,780		10,168		—		—		—
POSCO America Corporation		345,225		—		90		—		—		1,776
POSCO Canada Ltd.		439		690		278,915		—		—		—
POSCO Asia Co., Ltd.		1,949,354		1,454		365,025		337		1,625		4,982
Qingdao Pohang Stainless Steel Co., Ltd.		161,803		—		—		—		—		176
POSCO JAPAN Co., Ltd.		1,436,159		20		26,256		621		—		44,829
POSCO-VIETNAM Co., Ltd.		212,883		—		—		—		—		7
POSCO MEXICO S.A. DE C.V.		276,387		—		—		—		—		1,749
POSCO Maharashtra Steel Private Limited		467,206		—		—		—		—		65
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		192,467		—		—		—		—		—
Others		932,048		10,073		262,828		25,270		240,687		118,665
		12,667,107		100,463		2,417,985		529,689		629,452		409,170
Associates and joint ventures (*3)
POSCO PLANTEC Co., Ltd.		2,947		112		5,487		300,041		20,718		19,763
SNNC		6,734		712		554,151		—		—		4
POSCO-SAMSUNG-Slovakia Processing Center		52,779		—		—		—		—		—
Roy Hill Holdings Pty Ltd		—		—		697,096		—		—		—
CSP — Compania Siderurgica do Pecem		7,384		—		159,501		—		—		—
Others		14,943		52,583		79,103		—		—		3
		84,787		53,407		1,495,338		300,041		20,718		19,770
	￦	12,751,894		153,870		3,913,323		829,730		650,170		428,940

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) As of December 31, 2017, the Company provided guarantees to related parties (Note 38).

(*4) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(b) The related account balances of significant transactions between the controlling company and related companies as of December 31, 2016 and 2017 are as follows:

1) December 31, 2016

	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Trade accounts and notes payable		Accounts payable		Others		Total
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	3		3,359		3,362		—		9,825		515		10,340
POSCO Processing & Service		207,744		178		207,922		1,085		5,367		5,184		11,636
POSCO COATED & COLOR STEEL Co., Ltd.		48,716		324		49,040		—		5		1,600		1,605
POSCO ICT		—		128		128		1,062		89,382		6,074		96,518
eNtoB Corporation		—		—		—		9,948		29,310		15		39,273
POSCO CHEMTECH		27,253		3,868		31,121		54,702		11,870		19,282		85,854
POSCO ENERGY CO., LTD.		18,701		2,012		20,713		—		—		1,425		1,425
POSCO DAEWOO Corporation		182,700		11,184		193,884		460		183		49		692
POSCO Thainox Public Company Limited		62,034		8		62,042		—		224		—		224
POSCO America Corporation		10,008		—		10,008		—		—		—		—
POSCO Asia Co., Ltd.		375,823		458		376,281		25,101		—		—		25,101
Qingdao Pohang Stainless Steel Co., Ltd.		25,386		—		25,386		—		5		—		5
POSCO MEXICO S.A. DE C.V.		114,166		1,024		115,190		—		—		—		—
POSCO Maharashtra Steel Private Limited		208,737		9,923		218,660		—		—		—		—
Others		333,031		64,526		397,557		17,374		46,455		26,974		90,803
		1,614,302		96,992		1,711,294		109,732		192,626		61,118		363,476
Associates and joint ventures
POSCO PLANTEC Co., Ltd.		30		9		39		2,125		39,647		—		41,772
SNNC		223		26		249		40,201		—		—		40,201
Others		800		1		801		991		17,685		—		18,676
		1,053		36		1,089		43,317		57,332		—		100,649
	￦	1,615,355		97,028		1,712,383		153,049		249,958		61,118		464,125

2) December 31, 2017

	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Trade accounts and notes payable		Accounts payable		Others		Total
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	2		2,908		2,910		—		21,965		674		22,639
POSCO COATED & COLOR STEEL Co., Ltd.		58,184		324		58,508		—		5		504		509
POSCO ICT		55		217		272		1,458		72,586		27,009		101,053
eNtoB Corporation		—		—		—		12,252		31,899		20		44,171
POSCO CHEMTECH		61,810		3,589		65,399		51,774		20,313		17,568		89,655
POSCO ENERGY CO., LTD.		33,239		1,673		34,912		—		—		1,425		1,425
POSCO DAEWOO Corporation		483,915		12,739		496,654		10,213		2,145		5,794		18,152
POSCO Thainox Public Company Limited		57,826		—		57,826		1,204		—		—		1,204
POSCO America Corporation		5,365		—		5,365		—		—		—		—
POSCO Asia Co., Ltd.		404,857		541		405,398		9,811		24		—		9,835
Qingdao Pohang Stainless Steel Co., Ltd.		31,693		—		31,693		—		—		—		—
POSCO MEXICO S.A. DE C.V.		55,695		530		56,225		—		—		—		—
POSCO Maharashtra Steel Private Limited		392,630		5,733		398,363		—		—		—		—
Others		384,385		49,403		433,788		15,038		59,575		31,118		105,731
		1,969,656		77,657		2,047,313		101,750		208,512		84,112		394,374
Associates and joint ventures
POSCO PLANTEC Co., Ltd.		1,946		9		1,955		3,842		15,723		—		19,565
SNNC		648		61		709		49,506		3		—		49,509
Others		8,350		904		9,254		824		—		—		824
		10,944		974		11,918		54,172		15,726		—		69,898
	￦	1,980,600		78,631		2,059,231		155,922		224,238		84,112		464,272

(c) Significant transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2015, 2016 and 2017 were as follows:

1) December 31, 2015

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
SeAH Changwon integrated Special Steel	￦	32,802		—		49,862		1,977
POSCO PLANTEC Co., Ltd.		10,543		—		5,953		6,386
New Songdo International City Development, LLC		420,094		—		—		667
SNNC		32,160		44		6,518		53,260
Posco e&c Songdo International Building		6,278		—		—		25,197
VSC POSCO Steel Corporation		37,416		—		2,395		3
USS-POSCO Industries		353,626		—		1,109		—
CSP — Compania Siderurgica do Pecem		845,979		—		—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		68,300		111		70,236		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		3		—		23,320		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		9,668		—		—		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		30,310		—		4		—
Zhangjiagang Pohang Refractories Co., Ltd.		970		1,248		17,484		2,023
Sebang Steel		—		—		29,007		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		214,521		—		3,960		3,190
DMSA/AMSA		800		9,322		241,074		—
South-East Asia Gas Pipeline Company Ltd.		—		47,556		—		—
Others		415,217		17,793		18,518		2,683
	￦	2,478,687		76,074		469,440		95,386

2) December 31, 2016

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
SeAH Changwon integrated Special Steel	￦	16,294		—		22,029		—
POSCO PLANTEC Co., Ltd.		21,659		5		3,335		5,912
New Songdo International City Development, LLC		226,042		—		—		14
SNNC		29,330		—		21,479		9,494
Posco e&c Songdo International Building		4,245		—		—		16,219
Chun-cheon Energy Co., Ltd		288,307		—		—		—
Noeul Green Energy		107,268		—		—		—
Incheon-Gimpo Expressway Co., Ltd.		102,183		—		—		—
VSC POSCO Steel Corporation		43,650		47		479		—
USS-POSCO Industries		287,072		—		1,195		—
CSP — Compania Siderurgica do Pecem		157,814		—		—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		61,844		—		57,179		—
LLP POSUK Titanium		—		—		14,575		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		—		24,365		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		15,759		—		—		—
PT. Batutua Tembaga Raya		—		—		13,079		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		31,711		—		65		—
Zhangjiagang Pohang Refractories Co., Ltd.		250		14		364		2,472
Sebang Steel		—		—		26,276		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		157,886		—		3,535		—
DMSA/AMSA		—		—		72,582		—
South-East Asia Gas Pipeline Company Ltd.		—		87,973		—		—
Others		195,139		11,184		16,664		1,801
	￦	1,746,453		99,223		277,201		35,912

3) December 31, 2017

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	19,513		—		98		8,113
New Songdo International City Development, LLC		223,567		13,207		—		49
SNNC		26,288		—		3,578		17,985
Chun-cheon Energy Co., Ltd		42,147		—		—		—
Noeul Green Energy		11,863		—		—		2,178
VSC POSCO Steel Corporation		19,404		—		188		—
USS-POSCO Industries		26,899		107		2,222		—
CSP — Compania Siderurgica do Pecem		241,299		—		101,018		21,154
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		38,484		—		47,241		—
LLP POSUK Titanium		—		—		3,972		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		4		—		20,145		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		20,004		—		—		—
PT. Batutua Tembaga Raya		—		—		21,024		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		34,088		—		192		—
Zhangjiagang Pohang Refractories Co., Ltd.		—		—		87		1,632
Sebang Steel		441		—		23,778		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		43,764		—		—		—
DMSA/AMSA		—		99		47,092		—
South-East Asia Gas Pipeline Company Ltd.		—		62,423		—		—
Others		272,107		43,126		19,520		19,483
	￦	1,019,872		118,962		290,155		70,594

(d) The related account balances of significant transactions between the Company, excluding the controlling company, and related companies as of December 31, 2016 and December 31, 2017 are as follows:

1) December 31, 2016

	Receivables (*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	4,709		—		6		4,715		2,718		8,521		11,239
New Songdo International City Development, LLC		255,822		—		5,725		261,547		—		—		—
Chun-cheon Energy Co., Ltd		12,142		—		—		12,142		—		3,171		3,171
VSC POSCO Steel Corporation		5,265		—		—		5,265		—		—		—
USS-POSCO Industries		583		—		—		583		75		—		75
Nickel Mining Company SAS		133		60,425		116		60,674		—		—		—
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.		62,814		60,425		1,643		124,882		—		875		875
CSP — Compania Siderurgica do Pecem		224,760		—		149,700		374,460		—		109,272		109,272
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		3,279		6,647		6		9,932		1,365		—		1,365
PT. Batutua Tembaga Raya		—		38,120		—		38,120		2,293		—		2,293
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		9,292		8,460		43		17,795		40		—		40
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO.,LTD.		100,367		—		—		100,367		—		—		—
DMSA/AMSA		—		90,638		—		90,638		—		—		—
South-East Asia Gas Pipeline Company Ltd.		—		276,605		48		276,653		—		—		—
Others		184,402		142,812		6,593		333,807		4,615		750		5,365
	￦	863,568		684,132		163,880		1,711,580		11,106		122,589		133,695

(*1) As of December 31, 2016, the Company recognizes bad debt allowance for receivables amounting to ￦48,891 million.

2) December 31, 2017

	Receivables (*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	2,287		—		5		2,292		3,442		5,595		9,037
New Songdo International City Development, LLC		484,038		282,775		1,696		768,509		—		7,146		7,146
Chun-cheon Energy Co., Ltd		—		—		21		21		—		9,617		9,617
VSC POSCO Steel Corporation		16		—		—		16		17		—		17
USS-POSCO Industries		—		—		4		4		—		—		—
Nickel Mining Company SAS		—		59,668		118		59,786		—		—		—
CSP — Compania Siderurgica do Pecem		380,180		—		13,443		393,623		—		29,700		29,700
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		2,108		5,357		6		7,471		2,449		—		2,449
PT. Batutua Tembaga Raya		24		29,048		—		29,072		—		—		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		8,067		5,357		32		13,456		107		—		107
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO.,LTD.		715		—		—		715		—		526		526
DMSA/AMSA		—		69,713		4,443		74,156		—		—		—
South-East Asia Gas Pipeline Company Ltd.		—		229,880		—		229,880		—		—		—
Others		134,397		134,506		6,885		275,788		1,856		2,005		3,861
	￦	1,011,832		816,304		26,653		1,854,789		7,871		54,589		62,460

(*1) As of December 31, 2017, the Company recognizes bad debt allowance for receivables amounting to ￦4,217 million.

(e) Significant financial transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2016 and 2017 were as follows:

1) December 31, 2016

	Beginning		Lend		Collect			Others (*3)			Ending
	(in millions of Won)
Associates and joint ventures
METAPOLIS Co.,Ltd.	￦	26,000		—		(12,730	)		—			13,270
Posco e&c Songdo International Building (*1)		—		298,865		—			(298,865	)		—
DMSA/AMSA (*2)		99,854		11,774		—			(20,990	)		90,638
South-East Asia Gas Pipeline Company Ltd.		283,954		27,087		(43,080	)		8,644			276,605
PT. Batutua Tembaga Raya		36,830		—		—			1,290			38,120
PT. Tanggamus Electric Power		2,359		1,174		—			73			3,606
PT. Wampu Electric Power		4,454		1,169		—			138			5,761
PT. POSMI Steel Indonesia		4,688		—		—			146			4,834
Nickel Mining Company SAS		17,580		40,594		—			2,251			60,425
POSK(Pinghu) Steel Processing Center Co., Ltd.		5,743		5,683		(11,366	)		(60	)		—
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.		58,600		—		—			1,825			60,425
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		10,782		—		(4,471	)		336			6,647
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		—		6,959		—			292			7,251
Hamparan Mulya		3,516		—		—			110			3,626
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		5,274		—		—			164			5,438
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		11,720		—		(3,480	)		220			8,460
POS-SeAH Steel Wire (Thailand) Co., Ltd.		—		6,959		—			292			7,251
AMCI (WA) PTY LTD		85,168		4,665		—			1,942			91,775
	￦	656,522		404,929		(75,127	)		(302,192	)		684,132

(*1) During the year ended December 31, 2016, it was classified as a subsidiary from an associate.

(*2) During the year ended December 31, 2016, loans amounting to ￦24,624 million have been converted to shares of DMSA/AMSA, and its amount is included in others.

(*3) Includes adjustments of foreign currency translation differences and others.

2) December 31, 2017

	Beginning		Lend		Collect			Others (*4)			Ending
		(in millions of Won)
Associates and joint ventures
METAPOLIS Co.,Ltd. (*1)	￦	13,270		—		—			(13,270	)		—
New Songdo International City Development, LLC		—		484,644		(201,869	)		—			282,775
GALE International Korea, LLC		—		2,000		—			—			2,000
DMSA/AMSA (*2)		90,638		2,956		—			(23,881	)		69,713
South-East Asia Gas Pipeline Company Ltd.		276,605		28,967		(46,252	)		(29,440	)		229,880
PT. Batutua Tembaga Raya		38,120		—		—			(9,072	)		29,048
PT. Tanggamus Electric Power		3,606		—		—			(409	)		3,197
PT. Wampu Electric Power		5,761		—		—			(654	)		5,107
PT. POSMI Steel Indonesia		4,834		—		—			(548	)		4,286
Nickel Mining Company SAS		60,425		—		—			(757	)		59,668
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. (*1)		60,425		—		—			(60,425	)		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		6,647		—		(577	)		(713	)		5,357
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		7,251		—		—			(823	)		6,428
Hamparan Mulya		3,626		—		(3,626	)		—			—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		5,438		—		(5,438	)		—			—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		8,460		—		(2,262	)		(841	)		5,357
POS-SeAH Steel Wire (Thailand) Co., Ltd.		7,251		—		(1,142	)		319			6,428
AMCI (WA) PTY LTD		91,775		4,327		—			(4,041	)		92,061
POS-AUSTEM YANTAI AUTOMOTIVE CO.,LTD (*3)		—		—		—			5,357			5,357
POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD (*3)		—		—		—			8,571			8,571
SAMHWAN VINA CO., LTD (*3)		—		—		—			1,071			1,071
	￦	684,132		522,894		(261,166	)		(129,556	)		816,304

(*1) During the year ended December 31, 2017, it was excluded from associates.

(*2) During the year ended December 31, 2017, loans amounting to ￦13,712 million have been converted to shares of DMSA/AMSA, and its amount is included in others.

(*3) During the year ended December 31, 2017, it was newly classified to associates and joint ventures.

(*4) Includes adjustments of foreign currency translation differences and others.

(f) For the years ended December 31, 2015, 2016 and 2017, details of compensation to key management officers were as follows:

	2015		2016		2017
	(in millions of Won)
Short-term benefits	￦	111,278		90,916		112,688
Long-term benefits		19,513		17,905		8,632
Retirement benefits		21,850		17,870		20,422
	￦	152,641		126,691		141,742

Key management officers include directors (including non-standing directors), executive officials and fellow officials who have significant influences and responsibilities in the Company’s business and operations.

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Commitments and Contingencies

38. Commitments and Contingencies

(a) Contingent liabilities

Contingent liabilities may develop in a way not initially expected. Therefore, management continuously assesses contingent liabilities to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognized in the consolidated financial statements of the period in which the change in probability occurs (except in the extremely rare circumstances where no reliable estimate can be made).

Management makes estimates and assumptions that affect disclosures of commitments and contingencies. All estimates and assumptions are based on the evaluation of current circumstances and appraisals with the supports of internal specialists or external consultants.

Management regularly analyzes current information about these matters and provides for probable contingent losses including the estimate of legal expense to resolve the matters. Internal and external lawyers are used for these assessments. In making the decision regarding the need for a provision, management considers whether the Company has an obligation as a result of a past event, whether it is probable that an outflow or cash or other resources embodying economic benefits will be required to settle the obligation and the ability to make a reliable estimate of the amount of the obligation.

(b) Details of guarantees

Contingent liabilities on outstanding guarantees provided by the Company as of December 31, 2017 are as follows:

			Guarantee limit				Guarantee amount
Guarantors	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	(in millions of Won)
[The Company]
POSCO	POSCO Asia Co., Ltd.	BOC	USD	50,000,000		53,570		50,000,000		53,570
	POSCO ASSAN TST STEEL INDUSTRY	SMBC and others	USD	146,527,500		156,990		131,874,750		141,291
	POSCO COATED STEEL (THAILAND) CO., LTD.	The Great&CO Co.,Ltd (SPC)	THB	5,501,000,000		180,268		5,501,000,000		180,268
	POSCO Maharashtra Steel Private Limited	Export-Import Bank of Korea and others	USD	649,853,000		696,252		323,918,500		347,045
	POSCO MEXICO S.A. DE C.V.	BOA and others	USD	160,000,000		171,424		160,000,000		171,424
	POSCO SS-VINA CO., LTD.	Export-Import Bank of Korea and others	USD	354,351,050		379,652		314,599,225		337,062
	POSCO VST CO., LTD.	ANZ and others	USD	65,000,000		69,641		8,125,000		8,706
	POSCO-VIETNAM Co., Ltd.	Export-Import Bank of Korea	USD	196,000,000		209,994		196,000,000		209,994
	PT. KRAKATAU POSCO	Export-Import Bank of Korea and others	USD	1,350,300,000		1,446,711		1,187,394,785		1,272,174
	Zhangjiagang Pohang Stainless Steel Co., Ltd.	BTMU and others	CNY	760,500,000		124,456		684,450,000		112,011
POSCO DAEWOO Corporation	Daewoo Global Development. Pte., Ltd	Export-Import Bank of Korea	USD	21,633,300		23,178		21,633,300		23,178
		MIRAE ASSET DAEWOO CO.,LTD.	KRW	29,137		29,137		10,703		10,703
	Daewoo Power PNG Ltd.	Export-Import Bank of Korea	USD	54,400,000		58,284		54,400,000		58,284
	Daewoo Textile LLC	Export-Import Bank of Korea	USD	4,000,000		4,286		4,000,000		4,286
	POSCO ASSAN TST STEEL INDUSTRY	ING and others	USD	14,652,750		15,699		14,652,750		15,699
	POSCO DAEWOO INDIA PVT., LTD.	Shinhan Bank and others	USD	162,400,000		173,995		51,237,684		54,896
		SC Bank and others	INR	7,350,000,000		122,892		2,037,278,075		34,063
	PT. Bio Inti Agrindo	Export-Import Bank of Korea and others	USD	120,875,000		129,505		120,875,000		129,505
	Songdo Posco family Housing	SAMSUNG SECURITIES CO.,LTD and others	KRW	70,000		70,000		49,500		49,500
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	POSCO E&C Vietnam Co., Ltd.	Export-Import Bank of Korea	USD	30,000,000		32,142		30,000,000		32,142
	HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Woori Bank and others	USD	138,000,000		147,853		138,000,000		147,853
	POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	HSBC	USD	100,000,000		107,140		100,000,000		107,140
	POSCO ENGINEERING (THAILAND) CO., LTD.	POSCO Asia Co., Ltd	USD	39,451,000		42,268		39,451,000		42,268
	POSCO Engineering and Construction India Private Limited	Woori Bank	USD	2,100,000		2,250		2,100,000		2,250
	PT PEN INDONESIA	POSCO Asia Co., Ltd.	USD	5,000,000		5,357		5,000,000		5,357
	PT. POSCO E&C INDONESIA	BNP Indonesia	IDR	79,000,000,000		6,241		79,000,000,000		6,241
	Songdo Posco family Housing	SAMSUNG SECURITIES CO.,LTD and others	KRW	70,000		70,000		49,500		49,500
	Daewoo Global Development. Pte., Ltd	POSCO Asia Co., Ltd. and others	USD	68,719,200		73,626		59,088,100		63,307
POSCO ICT	PT.POSCO ICT INDONESIA	POSCO Asia Co., Ltd.	USD	1,500,000		1,607		1,500,000		1,607
POSCO CHEMTECH	PT.Krakatau Posco Chemtech Calcination	Hana Bank	USD	33,600,000		35,999		20,705,882		22,184
POSCO COATED & COLOR STEEL Co., Ltd.	Myanmar POSCO C&C Company, Limited.	POSCO Asia Co., Ltd. and others	USD	13,986,947		14,985		13,986,947		14,985
POSCO ENERGY CO., LTD.	PT. KRAKATAU POSCO ENERGY	Export-Import Bank of Korea and others	USD	193,900,000		207,744		137,396,174		147,206
POSCO Asia Co., Ltd.	POSCO ASSAN TST STEEL INDUSTRY	SMBC	USD	25,000,000		26,785		25,000,000		26,785
[Associates and joint ventures]
POSCO	CSP — Compania Siderurgica do Pecem	Export-Import Bank of Korea and others	USD	420,000,000		449,990		420,000,000		449,990
		BNDES	BRL	464,060,000		150,100		464,060,000		150,100
	LLP POSUK Titanium	SMBC	USD	15,000,000		16,071		15,000,000		16,071
	Nickel Mining Company SAS	SMBC	EUR	46,000,000		58,846		37,000,000		47,332
POSCO DAEWOO Corporation	GLOBAL KOMSCO Daewoo LLC	Industrial & Commercial Bank of China	USD	8,225,000		8,812		8,225,000		8,812
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	New Songdo International City Development, LLC	Others	KRW	340,000		340,000		317,900		317,900
	UITrans LRT Co., Ltd.	Kookmin Bank and others	KRW	20,740		20,740		20,740		20,740
	Chun-cheon Energy Co., Ltd	Kookmin Bank and others	KRW	11,600		11,600		10,993		10,993
POSCO ICT	Incheon-Gimpo Expressway co., Ltd.	Korea Development Bank	KRW	100,000		100,000		100,000		100,000
	UITrans LRT Co., Ltd.	Kookmin Bank	KRW	76,000		76,000		76,000		76,000
POSCO CHEMTECH	KRAKATAU POS-CHEM DONG-SUH CHEMICAL	Hana Bank	USD	1,140,000		1,221		1,140,000		1,221
POSCO(Suzhou) Automotive Processing Center Co.,Ltd.	POS-InfraAuto (Suzhou) Co., Ltd	Korea Development Bank	USD	780,000		836		780,000		836
[Others]
POSCO DAEWOO Corporation	Ambatovy Project Investments Limited and others	Export-Import Bank of Korea	USD	87,272,727		93,504		28,325,258		30,348
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	Ecocity CO.,LTD and others	Others	KRW	960,011		960,011		446,098		446,098
	AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.	POSCO Asia Co., Ltd. and others	USD	150,000,000		160,710		150,000,000		160,710
POSCO ICT	SMS Energy and others	Hana Bank and others	KRW	104,880		104,880		73,676		73,676
	Hyochun CO., LTD	Daegu Bank and others	KRW	39,575		39,575		39,575		39,575
	BLT Enterprise and others	Kyobo Life Insurance Co.,Ltd and others	KRW	1,163,585		1,163,585		1,163,585		1,163,585
POSCO AUSTRALIA PTY LTD	Department of Trade and Investment(NSW Government)	Woori Bank and others	AUD	25,260,721		21,097		25,260,721		21,097
			USD	4,683,667,474		5,018,081		3,834,409,355		4,108,186
			KRW	2,985,528		2,985,528		2,358,270		2,358,270
			CNY	760,500,000		124,456		684,450,000		112,011
			INR	7,350,000,000		122,892		2,037,278,075		34,063
			IDR	79,000,000,000		6,241		79,000,000,000		6,241
			THB	5,501,000,000		180,268		5,501,000,000		180,268
			EUR	46,000,000		58,846		37,000,000		47,332
			AUD	25,260,721		21,097		25,260,721		21,097
			BRL	464,060,000		150,100		464,060,000		150,100

(c) POSCO ENGINEERING & CONSTRUCTION CO., LTD. has provided the completion guarantees for Samsung C&T Corporation amounting to ￦395,792 million while Samsung C&T Corporation has provided the construction guarantees or payment guarantees on customers’ borrowings on behalf of POSCO ENGINEERING & CONSTRUCTION CO., LTD. amounting to ￦269,455 million as of December 31, 2017.

(d) Other commitments

Details of other commitments of the Company as of December 31, 2017 are as follows:

POSCO	POSCO entered into long-term contracts to purchase iron ore, coal, nickel and others. The contracts of iron ore and coal generally have terms of more than three years and the contracts of nickel have terms of more than one year. These contracts provide for periodic price adjustments based on the market price. As of December 31, 2017, 116 million tons of iron ore and 18 million tons of coal remained to be purchased under such long-term contracts.
	POSCO entered into an agreement with Tangguh Liquefied Natural Gas (LNG) Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. The purchase price is subject to change, based on changes of the monthly standard oil price (JCC) and with a price ceiling.
	As of December 31, 2017, the Company entered into commitments with KOREA ENERGY AGENCY for long-term foreign currency borrowings, which enables the Company to borrow up to the amount of USD 6.49 million. The borrowings are related to the Company’s the exploration of gas hydrates in Western Fergana-Chinabad. The repayment of the borrowings depends on the success of the projects. The Company is not liable for the repayment of full or part of the amount borrowed if the respective projects fail. The Company has agreed to pay a certain portion of its profits under certain conditions, as defined by the borrowing agreements. As of December 31, 2017, the ending balance of the borrowing amounts to USD 1.02 million.
	POSCO has provided a supplemental funding agreement, as the largest shareholder, as requested from the creditors, including Norddeutsche Landesbank, for seamless funding to POSCO ENERGY Co., Ltd. under construction of new power plant.
	The Company provides a supplementary fund of up to ￦9.8 billion to the Company’s subsidiary, Busan E&E Co., Ltd., at the request of creditors such as the Korea Development Bank.
	The Company provides supplementary funding for the purpose of promoting the Suncheon Bay PRT business of Suncheon Eco Trans Co., Ltd, a subsidiary of the Company, at the request of creditors.
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	As of December 31, 2017, POSCO ENGINEERING & CONSTRUCTION CO., LTD. has foreign currency guarantee of up to USD 2,311 million and uses USD 1,306 million with Woori Bank and others.
POSCO ICT	As of December 31, 2017, in relation to contract enforcement, POSCO ICT was provided with ￦143,582 million and ￦22,432 million guaranties from Korea Software Financial Cooperative and Seoul Guarantee Insurance, respectively.

(e) Litigation in progress

As of December 31, 2017, litigations in progress that POSCO and certain subsidiaries are defendants in legal actions arising from the normal course of business are as follows:

Company	Legal actions		Claim amount		Korean Won equivalent		Description
	(In millions of Won, in thousands of foreign currencies)
POSCO		15	KRW	23,037		23,037	Lawsuit on claim for employee right and others(*1)
		1	USD	1,583		1,696	Arbitration on trading and others
POSCO DAEWOO Corporation		2	EUR	2,747		3,514	Lawsuit on claim for damages and others
		3	INR	4,518,694		75,553	Lawsuit on claim for payment on guarantees and others(*1)
		10	KRW	9,903		9,903	Lawsuit on claim for payment and others
		3	USD	22,228		23,815	Lawsuit on claim for damages and others(*1)
		1	PKR	124,775		1,208	Lawsuit on claim for damages
		1	CAD	79,000		67,363	Lawsuit on claim for damages
POSCO ENGINEERING & CONSTRUCTION CO., LTD.		104	KRW	461,134		461,134	Arbitration on construction costs allocation and others
POSCO ICT		13	KRW	9,894		9,894	Lawsuit on claim for payment and others
POSCO A&C		3	KRW	3,985		3,985	Lawsuit on claim for payment on construction
POSCO ENERGY CO., LTD.		4	KRW	7,017		7,017	Lawsuit on claim for damages and revocation of electricity supply contract and others
POSCO E&C CHINA CO., LTD.		11	CNY	13,679		2,239	Lawsuit on claim for payment of reserve for construction warranty and others
		1	KRW	3,305		3,305	Lawsuit on claim for payment on construction
Posco e&c Songdo International Building		3	KRW	892		892	Lawsuit on affirmation of the non-existence of general meeting of stockholders and others
POSPOWER CO., Ltd.		1	KRW	1,000		1,000	Lawsuit on claim for damages
POSCO ENGINEERING(THAILAND) CO., LTD.		7	THB	724,400		23,739	Lawsuit on claim for payment on construction
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S		6	TRY	31		9	Lawsuit on claim for unfair dismissal and others
PT. KRAKATAU POSCO		1	IDR	324,858,033		25,664	Lawsuit on claim for payment on construction
POSCO(Dalian)IT Center Development Co., Ltd.		2	CNY	423		69	Lawsuit over contract dispute dealing apartment
Brazil Sao Paulo Steel Processing Center		3	BRL	12,167		3,935	Lawsuit on claim for payment on construction and others
POSCO ENGINEERING &CONSTRUCTION DO BRAZIL LTDA.		184	BRL	121,058		39,156	Lawsuit on claim for damages and others(*1)
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.		1	KRW	3,305		3,305	Lawsuit on claim for payment on construction
POSCO India Chennai Steel Processing Center Pvt.Ltd.		6	USD	8,409		9,009	Lawsuit on custom duty and others

(*1) The Company made a reliable estimate in 163 lawsuits by considering the possibility and amount of outflow of resources and recognized ￦27,963 million as provision for legal contingencies and claims.

For all the other lawsuits and claims, management does not believe the Company has any present obligations and therefore, the Company has not recognized any provisions as of December 31, 2017 for the matters.

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Additional Information of Cash Flow Statements

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Additional Information of Cash Flow Statements

39. Additional Information of Cash Flow Statements

(a) Changes in operating assets and liabilities for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Trade accounts and notes receivable	￦	1,586,113			273,419			63,075
Other receivables		259,741			191,591			113,740
Inventories		2,456,068			(889,998	)		(1,435,170	)
Other current assets		42,131			(287,377	)		110,688
Other non-current assets		72,826			33,584			12,455
Trade accounts and notes payable		(894,129	)		769,337			(607,999	)
Other payables		39,811			(179,174	)		(26,922	)
Other current liabilities		(457,947	)		2,490			338,273
Provisions		(119,172	)		(124,884	)		(145,763	)
Payments of severance benefits		(157,983	)		(278,278	)		(185,220	)
Plan assets		(115,274	)		(138,854	)		3,815
Other non-current liabilities		72,267			223,574			(82,605	)
	￦	2,784,452			(404,570	)		(1,841,633	)

(b) Changes in liabilities arising from financial activities for the year ended December 31, 2017 were as follows:

	Liabilities												Derivatives held to hedge borrowings
	Short-term  borrowings			long-term  borrowings			Dividend payable			Finance lease  liabilities
	(in millions of Won)
Beginning	￦	7,979,727			14,725,271			7,770			114,409			(52,373	)
Changes from financing cash flows		558,083			(1,410,033	)		(931,232	)		(10,536	)		—
Changes arising from obtaining or losing control of subsidiaries or other business		(12,469	)		3,299			—			—			—
The effect of changes in foreign exchange rates		(350,523	)		(435,170	)		—			(10,855	)		—
Changes in fair values		—			—			—			—			171,693
Other changes:
Decrease in retained earnings		—			—			863,579			—			—
Decrease in non-controlling interests		—			—			67,096			—			—
Amortization of discount on debentures issued		—			5,472			—			—			—
Ending	￦	8,174,818			12,888,839			7,213			93,018			119,320

XML

Operating Segments and Geographic Information

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Operating Segments and Geographic Information

40. Operating Segments and Geographic Information

(a) The Company’s operating businesses are organized based on the nature of markets and customers. The Company has four reportable operating segments—steel, construction, trading and others. The steel segment includes production of steel products and revenue of such products. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas. The trading segment consists of exporting and importing a wide range of steel products and raw materials that are both obtained from and supplied to POSCO, as well as between other suppliers and purchasers in Korea and overseas. Other segments include power generation, liquefied natural gas production, network and system integration and logistics. The policies of classification and measurement on operating segments were the same for all periods presented.

(b) Information about reportable segments as of and for the years ended December 31, 2015, 2016 and 2017 was as follows:

1) As of and for the year ended December 31, 2015

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	28,292,824			18,315,487			8,515,780			3,068,254			58,192,345
Internal revenues		16,543,951			8,692,020			1,352,067			2,691,361			29,279,399
Including inter segment revenue		9,146,808			4,480,744			1,090,193			2,571,219			17,288,964
Total revenues		44,836,775			27,007,507			9,867,847			5,759,615			87,471,744
Interest income		139,821			55,630			27,134			16,173			238,758
Interest expenses		(560,767	)		(76,672	)		(91,742	)		(141,095	)		(870,276	)
Depreciation and amortization		(2,782,680	)		(166,814	)		(50,605	)		(282,817	)		(3,282,916	)
Impairment loss on property, plant and equipment and others		(243,828	)		(17,281	)		(28,345	)		(22,979	)		(312,433	)
Impairment loss on available-for-sale financial assets		(151,503	)		(1,410	)		(47,616	)		(40,261	)		(240,790	)
Share of profit or loss of investment in associates and JVs		(562,133	)		(212,535	)		(25,223	)		(22,618	)		(822,509	)
Income tax expense		(390,000	)		(4,772	)		(30,615	)		(18,718	)		(444,105	)
Segment profit (loss)		181,495			38,843			(275,651	)		(65,570	)		(120,883	)
Segment assets		70,102,972			12,160,406			9,997,683			10,962,594			103,223,655
Investment in associates		17,457,391			1,097,971			1,076,024			1,186,307			20,817,693
Acquisition of non-current assets		2,102,674			303,753			276,863			345,971			3,029,261
Segment liabilities		21,078,613			8,953,410			5,716,550			6,472,925			42,221,498

2) As of and for the year ended December 31, 2016

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	26,844,154			16,774,078			6,768,348			2,696,933			53,083,513
Internal revenues		16,062,016			9,646,026			713,703			2,379,945			28,801,690
Including inter segment revenue		8,992,783			5,296,847			557,526			2,285,128			17,132,284
Total revenues		42,906,170			26,420,104			7,482,051			5,076,878			81,885,203
Interest income		126,210			40,424			65,256			13,564			245,454
Interest expenses		(459,345	)		(70,841	)		(102,292	)		(126,523	)		(759,001	)
Depreciation and amortization		(2,788,535	)		(165,863	)		(57,719	)		(264,299	)		(3,276,416	)
Impairment loss on property, plant and equipment and others		(99,165	)		(45,995	)		(9,426	)		(88,696	)		(243,282	)
Impairment loss on available-for-sale financial assets		(225,225	)		(28,988	)		(35,331	)		(24,902	)		(314,446	)
Share of profit or loss of investment in associates and JVs		(211,084	)		(53,586	)		(283,833	)		(6,369	)		(554,872	)
Income tax expense		(495,874	)		(18,629	)		107,520			(56,026	)		(463,009	)
Segment profit (loss)		1,511,383			53,244			(1,403,712	)		(25,889	)		135,026
Segment assets		69,914,939			13,580,179			9,501,046			8,529,600			101,525,764
Investment in associates		16,109,360			1,100,973			795,445			1,200,295			19,206,073
Acquisition of non-current assets		2,334,842			249,597			25,533			191,715			2,801,687
Segment liabilities		20,292,764			10,134,170			6,780,380			4,709,689			41,917,003

3) As of and for the year ended December 31, 2017

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	30,230,368			20,802,207			6,886,606			2,735,919			60,655,100
Internal revenues		17,381,010			14,075,996			398,924			2,548,674			34,404,604
Including inter segment revenue		12,004,614			8,043,643			329,215			2,446,029			22,823,501
Total revenues		47,611,378			34,878,203			7,285,530			5,284,593			95,059,704
Interest income		128,827			32,799			100,922			17,940			280,488
Interest expenses		(422,357	)		(121,967	)		(112,983	)		(100,656	)		(757,963	)
Depreciation and amortization		(2,856,133	)		(206,490	)		(42,123	)		(255,620	)		(3,360,366	)
Impairment loss on property, plant and equipment and others		(149,840	)		(140,839	)		(37,476	)		(8,564	)		(336,719	)
Impairment loss on available-for-sale financial assets		(95,261	)		—			(18,637	)		(13,421	)		(127,319	)
Share of profit or loss of investment in associates and JVs		8,352			—			(8,555	)		(1,518	)		(1,721	)
Income tax expense		(977,853	)		(109,710	)		(109,961	)		(77,172	)		(1,274,696	)
Segment profit (loss)		2,790,855			112,661			24,545			232,700			3,160,761
Segment assets		70,017,816			14,139,098			8,609,753			8,776,090			101,542,757
Investment in associates		16,116,654			1,134,798			668,392			1,193,895			19,113,739
Acquisition of non-current assets		2,033,184			286,185			99,190			251,665			2,670,224
Segment liabilities		19,057,249			10,386,294			5,744,693			4,620,902			39,809,138

(c) Reconciliations of total segment revenues, profit or loss, assets and liabilities, and other significant items to their respective consolidated financial statement line items are as follows:

1) Revenues

	2015			2016			2017
	(in millions of Won)
Total revenue for reportable segments	￦	87,471,744			81,885,203			95,059,704
Elimination of inter-segment revenue		(29,279,399	)		(28,801,690	)		(34,404,604	)
Basis difference (*2)		329,923			(143,742	)		(468,233	)
	￦	58,522,268			52,939,771			60,186,867

2) Profit

	2015			2016			2017
	(in millions of Won)
Total profit (loss) for reportable segments	￦	(120,883	)		135,026			3,160,761
Goodwill and corporate FV adjustments		(95,150	)		(123,110	)		(84,370	)
Elimination of inter-segment profits		119,852			1,036,253			(102,922	)
Income tax expense		276,939			384,685			1,206,223
Basis difference (*2)		(30,413	)		(21,245	)		(84,641	)
Profit before income tax expense	￦	150,345			1,411,609			4,095,051

3) Assets

	2016			2017
	(in millions of Won)
Total assets for reportable segments (*1)	￦	101,525,764			101,542,757
Equity-accounted investees		(15,322,271	)		(15,555,972	)
Goodwill and corporate FV adjustments		3,750,915			3,368,333
Elimination of inter-segment assets		(10,191,413	)		(10,330,159	)
Basis difference (*2)		374,619			760,670
	￦	80,137,614			79,785,629

(*1) As segment assets and liabilities are determined based on separate financial statements, for subsidiaries which are in a different segment from that of its immediate parent company, their carrying amount in separate financial statements is eliminated upon consolidation. In addition, adjustments are made to adjust the amount of investment in associates and joint ventures from the amount reflected in segment assets to that determined using equity method in consolidated financial statements.

4) Liabilities

	2016			2017
	(in millions of Won)
Total liabilities for reportable segments	￦	41,917,003			39,809,138
Corporate FV adjustments		442,178			483,693
Elimination of inter-segment liabilities		(8,434,580	)		(8,731,880	)
Basis difference (*2)		447,744			897,953
	￦	34,372,345			32,458,904

5) Other significant items

a) December 31, 2015

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	238,758			—			(28,565	)		—		210,193
Interest expenses		(870,276	)		1,282			80,222			—		(788,772	)
Depreciation and amortization		(3,282,916	)		(117,595	)		182,265			—		(3,218,246	)
Share of profit or loss of investment in associates		(822,509	)		—			316,455			—		(506,054	)
Income tax expense		(444,105	)		24,294			142,872			10,379		(266,560	)
Impairment loss on property, plant and equipment and others		(312,433	)		—			(142,234	)		—		(454,667	)
Impairment loss on available-for-sale financial assets		(240,790	)		—			98,009			—		(142,781	)
	￦	(5,734,271	)		(92,019	)		649,024			10,379		(5,166,887	)

b) December 31, 2016

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	245,454			—			(62,979	)		—		182,475
Interest expenses		(759,001	)		(807	)		101,082			—		(658,726	)
Depreciation and amortization		(3,276,416	)		(104,949	)		167,518			—		(3,213,847	)
Share of profit or loss of investment in associates		(554,872	)		(38,732	)		504,927			—		(88,677	)
Income tax expense		(463,009	)		21,945			56,379			5,141		(379,544	)
Impairment loss on property, plant and equipment and others		(243,282	)		—			(125,657	)		—		(368,939	)
Impairment loss on available-for-sale financial assets		(314,446	)		—			66,042			—		(248,404	)
	￦	(5,365,572	)		(122,543	)		707,312			5,141		(4,775,662	)

c) December 31, 2017

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	280,488			—			(68,037	)		—		212,451
Interest expenses		(757,963	)		1,304			103,544			—		(653,115	)
Depreciation and amortization		(3,360,366	)		(106,195	)		169,141			—		(3,297,420	)
Share of profit or loss of investment in associates		(1,721	)		—			12,261			—		10,540
Income tax expense		(1,274,696	)		21,270			47,203			20,483		(1,185,740	)
Impairment loss on property, plant and equipment and others		(336,719	)		(867	)		34,619			—		(302,967	)
Impairment loss on available-for-sale financial assets		(127,319	)		—			4,105			—		(123,214	)
	￦	(5,578,296	)		(84,488	)		302,836			20,483		(5,339,465	)

(*2) Basis difference is related to the difference in recognizing revenue and expenses in connection with development and sale of certain residential real estate between the report reviewed by the CEO and the consolidated financial statements.

(d) Revenue by geographic area for years ended December 31, 2015, 2016 and 2017 was as follows:

	2015		2016			2017
	(in millions of Won)
Domestic	￦	39,268,907		34,883,941			38,882,220
Japan		1,934,808		1,892,022			2,200,405
China		5,756,867		5,908,046			6,731,214
Asia-other		5,888,045		5,649,843			7,750,553
North America		1,921,039		1,899,291			1,725,120
Others		3,422,679		2,850,370			3,365,588
		58,192,345		53,083,513			60,655,100
Basis difference		329,923		(143,742	)		(468,233	)
	￦	58,522,268		52,939,771			60,186,867

In presenting geographic information revenue is based on the geographical location of customers.

(e) Non-current assets by geographic area as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Domestic	￦	31,772,641		30,790,462
Japan		187,266		162,328
China		1,451,405		1,284,561
Asia-other		6,163,388		5,266,799
North America		168,800		277,249
Others		1,233,288		1,119,319
	￦	40,976,788		38,900,718

Non-current assets by geographic area include investment property, property, plant and equipment, goodwill and other intangible assets.

(f) There are no customers whose revenue is 10% or more of consolidated revenue.

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Basis of consolidation

Basis of consolidation

(a) Business combinations

The Company accounts for business combinations using the acquisition method when control is transferred to the Company.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-combination service.

(b) Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(c) Subsidiaries

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(d) Loss of control

When the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(e) Interests in equity-accounted investees

The Company’s interests in equity-control investees comprise interests in associates and joint ventures. Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Company has joint control, whereby the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees, until the date on which significant influence or joint control ceases.

(f) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Foreign currency transactions and translation

Foreign currency transactions and translation

(a) Foreign currency transactions

Foreign currency transactions are initially recorded using the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of each reporting period, foreign currency monetary items are translated using the closing rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the original transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date fair value was initially determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in profit or loss in the period in which they arise. When gains or losses on non-monetary items are recognized in other comprehensive income, exchange components of those gains or losses are recognized in other comprehensive income. Conversely, when gains or losses on non-monetary items are recognized in profit or loss, exchange components of those gains or losses are recognized in profit or loss.

(b) Foreign operations

If the presentation currency of the Company is different from a foreign operation’s functional currency, the financial statements of the foreign operation are translated into the presentation currency using the following methods:

The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at the closing rate.

When a foreign operation is disposed of, the relevant amount in the translation is transferred to profit or loss as part of the profit or loss on disposal. On the partial disposal of a subsidiary that includes a foreign operation, the relevant proportion of such cumulative amount is reattributed to non-controlling interest. In any other partial disposal of a foreign operation, the relevant proportion is reclassified to profit or loss.

Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other comprehensive income in the translation reserve.

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term investments in highly liquid securities that are readily convertible to known amounts of cash with maturities of three months or less from the acquisition date and which are subject to an insignificant risk of changes in value. Equity investments are excluded from cash and cash equivalents.

Non-derivative financial assets

Non-derivative financial assets

The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. The Company recognizes financial assets in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Upon initial recognition, non-derivative financial assets are measured at their fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the asset’s acquisition or issuance.

(a) Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss if they are held for trading or designated as such upon initial recognition. Upon initial recognition, transaction costs are recognized in profit or loss when incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

(b) Held-to-maturity financial assets

A non-derivative financial asset with a fixed or determinable payment and fixed maturity, for which the Company has the positive intention and ability to hold to maturity, is classified as held-to-maturity. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest rate method.

(c) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method unless the effect of discounting is immaterial.

(d) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity financial assets or loans and receivables. Subsequent to initial recognition, they are measured at fair value, with changes in fair value, net of any tax effect, recorded in other comprehensive income in equity. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost. When a financial asset is derecognized or impairment losses are recognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Dividends on an available-for-sale equity instrument are recognized in profit or loss when the Company’s right to receive payment is established.

(e) Derecognition of non-derivative financial assets

The Company derecognizes non-derivative financial assets when the contractual rights to the cash flows from the financial asset expire, or the Company transfers the rights to receive the contractual cash flows from the financial asset as well as substantially all the risks and rewards of ownership of the financial asset. Any interest in a transferred financial asset that is created or retained by the Company is recognized as a separate asset or liability.

If the Company retains substantially all the risks and rewards of ownership of the transferred financial assets, the Company continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.

(f) Offsetting a financial asset and a financial liability

Financial assets and financial liabilities are offset and the net amount is presented in the consolidated statement of financial position only when the Company currently has a legally enforceable right to offset the recognized amounts, and there is the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

Inventories

Inventories

Inventory costs, except materials-in-transit in which costs are determined by using specific identification method, are determined by using the moving-weighted average method. The cost of inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The allocation of fixed production overheads to the costs of finished goods or work in progress are based on the normal capacity of the production facilities.

Inventories are measured at the lower of cost or net realizable value. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories arising from an increase in net realizable value is recognized as a reduction in the amount of inventories recognized as a cost of goods sold in the period in which the reversal occurs.

The carrying amount of those inventories is recognized as cost of goods sold in the period in which the related revenue is recognized.

Non-current assets held for sale

Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. In order to be classified as held for sale, the assets or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable. The assets or disposal groups that are classified as non-current assets held for sale are measured at the lower of their carrying amount and fair value less cost to sell.

The Company recognizes an impairment loss for any initial or subsequent write-down of an asset or disposal group to fair value less costs to sell, and a gain for any subsequent increase in fair value less costs to sell, up to the cumulative impairment loss previously recognized in accordance with IAS No. 36 “Impairment of Assets”.

A non-current asset that is classified as held for sale or part of a disposal group classified as held for sale is not depreciated (or amortized).

Investment property

Investment property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment property is measured initially at its cost. Transaction costs are included in the initial measurement. Subsequently, investment property is carried at depreciated cost less any accumulated impairment losses.

Subsequent costs are recognized in the carrying amount of investment property at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate.

Property, plant and equipment

Property, plant and equipment

Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and any accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and, when the Company has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The cost of replacing a part of an item is recognized in the carrying amount of the item of property, plant and equipment, if the following recognition criteria are met:

(a) it is probable that future economic benefits associated with the item will flow to the Company, and

(b) the cost can be measured reliably.

The carrying amount of the replaced part is derecognized at the time the replacement part is recognized. The costs of the day-to-day servicing of the item are recognized in profit or loss as incurred.

Items of property, plant and equipment are depreciated from the date they are available for use or, in respect of self-constructed assets, from the date that the asset is completed and ready for use. Other than land, the costs of an asset less its estimated residual value are depreciated. Depreciation of property, plant and equipment is recognized in profit or loss on a straight-line basis, which most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset, over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognized.

The estimated useful lives for the current and comparative periods are as follows:

Buildings	3-50 years
Structures	4-50 years
Machinery and equipment	4-25 years
Vehicles	3-20 years
Tools	3-10 years
Furniture and fixtures	3-20 years
Lease assets	3-30 years
Bearer plants	20 years

The estimated residual value, useful lives and the depreciation method are reviewed at least at the end of each reporting period and, if expectations differ from previous estimates, the changes are accounted for as changes in accounting estimates.

Borrowing costs

Borrowing costs

The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale. Financial assets and inventories that are manufactured or otherwise produced over a short period of time are not qualifying assets. Assets that are ready for their intended use or sale when acquired are not qualifying assets.

To the extent that the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Company immediately recognizes other borrowing costs as an expense. To the extent that the Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company shall determine the amount of borrowing costs eligible for capitalization by applying a capitalization rate to the expenditures on that asset. The capitalization rate shall be the weighted average of the borrowing costs applicable to the borrowings of the Company that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs that the Company capitalizes during a period shall not exceed the amount of borrowing costs incurred during that period.

Intangible assets

Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses.

Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which club memberships are expected to be available for use, this intangible asset is determined as having an indefinite useful life and not amortized.

Intellectual property rights	4-25 years
Development costs	3-5 years
Port facilities usage rights	4-75 years
Other intangible assets	2-15 years

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the end of each reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the end of each reporting period to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. Changes are accounted for as changes in accounting estimates.

Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in profit or loss as incurred. Development expenditures are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditures are recognized in profit or loss as incurred.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

Exploration for and evaluation of mineral resources

Exploration for and evaluation of mineral resources

POSCO is engaged in exploration projects for mineral resources through subsidiaries, associates and joint ventures or other contractual arrangements. Expenditures related to the development of mineral resources are recognized as exploration or development intangible assets. The nature of these intangible assets are as follows:

(a) Exploration and evaluation assets

Exploration and evaluation assets consist of expenditures for topographical studies, geophysical studies and trenching. These assets are reclassified as development assets when it is proved that the exploration has identified commercially viable mineral deposit.

(b) Development assets

When proved reserves are determined and development is sanctioned, development expenditures incurred are capitalized. These expenditures include evaluation of oil fields, construction of oil/gas wells, drilling for viability and others. On completion of development and inception of extraction for commercial production of developed proved reserves, the development assets are reclassified as either property, plant and equipment or as intellectual property rights (mining rights) under intangible assets based on the nature of the capitalized expenditure.

The respective property, plant and equipment and intellectual property (mining rights) are each depreciated and amortized based on proved reserves on a unit of production basis.

Government grants

Government grants

Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grant’s conditions and that the grant will be received.

(a) Grants related to assets

Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted from the carrying amount of the assets and recognized in profit or loss on a systematic and rational basis over the life of the depreciable assets.

(b) Grants related to income

Government grants which are intended to compensate the Company for expenses incurred are deducted from the related expenses.

Leases

Leases

The Company classifies and accounts for leases as either a finance or operating lease, depending on the terms. Leases where the Company assumes substantially all of the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

(a) Finance leases

At the commencement of the lease term, the Company recognizes as finance assets and finance liabilities the lower amount of the fair value of the leased property and the present value of the minimum lease payments, each determined at the inception of the lease. Any initial direct costs are added to the amount recognized as an asset.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use on a systematic basis consistent with the depreciation policy the Company adopts for similar depreciable assets that are owned. If there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life.

(b) Operating leases

Lease obligations under operating leases are recognized as an expense on a straight-line basis over the lease term. Contingent rents are charged as expenses in the periods in which they are incurred.

(c) Determining whether an arrangement contains a lease

Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfillment of the arrangement is dependent on the use of a specific asset or assets (the asset) and the arrangement conveys a right to use the asset.

At inception or reassessment of the arrangement, management of the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If management of the Company concludes for a financial lease that it is impracticable to separate the payments reliably, the Company recognizes an asset and a liability at an amount equal to the fair value of the underlying asset that was identified as the subject of the lease. Subsequently, the liability shall be reduced as payments are made and an imputed finance charge on the liability recognized using the purchaser’s incremental borrowing rate of interest.

Impairment for financial assets

Impairment for financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. However, losses expected as a result of future events, regardless of likelihood, are not recognized.

Objective evidence that a financial asset or group of financial assets are impaired includes:

(a) significant financial difficulty of the issuer or obligor;

(b) a breach of contract, such as a default or delinquency in interest or principal payments;

(c) the lender, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;

(d) it becoming probable that the borrower will enter bankruptcy or other financial reorganization;

(e) the disappearance of an active market for that financial asset because of financial difficulties; or

(f) observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group.

In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

If there is objective evidence that financial assets are impaired, impairment losses are measured and recognized.

(a) Financial assets measured at amortized cost

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of its estimated future cash flows discounted at the asset’s original effective interest rate. If it is not practicable to obtain the instrument’s estimated future cash flows, impairment losses would be measured by using prices from any observable current market transactions. The Company can recognize impairment losses directly or establish a provision to cover impairment losses. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss shall be reversed either directly or by adjusting an allowance account.

(b) Financial assets carried at cost

If there is objective evidence that an impairment loss has occurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed.

(c) Available-for-sale financial assets

When a decline in the fair value of an available-for-sale financial asset has been recognized in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment even though the financial asset has not been derecognized. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognized in profit or loss.

Impairment for non-financial assets

Impairment for non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from construction contracts, employee benefits, inventories, deferred tax assets and non-current assets held for sale, are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amount to their carrying amount.

Management estimates the recoverable amount of an individual asset. If it is impossible to measure the individual recoverable amount of an asset, then management estimates the recoverable amount of cash-generating unit (“CGU”). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The Company determined that individual operating entities are CGUs.

The recoverable amount of an asset or CGU is the greater of its value-in-use and its fair value less costs to sell. The value-in-use is estimated by applying a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies arising from the goodwill acquired. Any impairment identified at the CGU level will first reduce the carrying amount of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Derivative financial instruments and hedges

Derivative financial instruments and hedges

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(a) Hedge accounting

The Company holds forward exchange contracts, currency swaps and commodity future contracts to manage foreign exchange risk and commodity fair value risk. The Company designated derivatives as hedging instruments to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Company formally documents the relationship between the hedging instruments and hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

① Fair value hedge

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the consolidated statement of comprehensive income.

The Company discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, or if the hedge no longer meets the criteria for hedge accounting. Any adjustment arising from gain or loss on the hedged item attributable to the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.

② Cash flow hedge

When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

(b) Embedded derivatives

Embedded derivatives are separated from the host contract and accounted for separately only if the following criteria have been met: (a) the economic characteristics and risks of the host contract and the embedded derivatives are not clearly and closely related to a separate instrument with the same terms as the embedded derivative that would meet the definition of a derivative, and (b) the hybrid (combined) instrument is not measured at fair value through profit or loss. Changes in the fair value of separable embedded derivatives from the host contract are recognized immediately in profit or loss. However, convertible rights of convertible bonds are not separated from the host contract and the compound financial instruments of bonds and convertible rights are designated and measured at fair value through profit and loss.

(c) Other derivatives

Changes in the fair value of a derivative that is not designated as a hedging instrument are recognized immediately in profit or loss.

Non-derivative financial liabilities

Non-derivative financial liabilities

The Company classifies non-derivative financial liabilities into financial liabilities at fair value through profit or loss or other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities. The Company recognizes financial liabilities in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the financial liability.

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading or designated as such upon initial recognition. Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the acquisition are recognized in profit or loss as incurred.

(b) Other financial liabilities

Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as other financial liabilities. At the date of initial recognition, other financial liabilities are measured at fair value minus transaction costs that are directly attributable to the acquisition. Subsequent to initial recognition, other financial liabilities are measured at amortized cost using the effective interest method. The Company derecognizes a financial liability from the consolidated statement of financial position when it is extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

Construction work in progress

Construction work in progress

The gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits (less recognized losses) exceed progress billings. If progress billings exceed costs incurred plus recognized profits (less recognized losses), then the gross amount due to customers for contract work is presented. Cost includes all expenditures related directly to specific projects and an allocation of fixed and variable overheads incurred in the Company’s contract activities based on normal operating capacity.

The Company recognizes advances received regarding the amount received from the ordering organization before the commencement of the construction. Also, the Company recognized trade accounts and notes receivable with respect to the amount billed to the ordering organization.

Employee benefits

Employee benefits

(a) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service. When an employee has rendered service to the Company during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as profit or loss. If the Company has a legal or constructive obligation which can be reliably measured, the Company recognizes the amount of expected payment for profit-sharing and bonuses payable as liabilities.

(b) Other long-term employee benefits

Other long-term employee benefits include employee benefits that are settled beyond 12 months after the end of the period in which the employees render the related service, and are calculated at the present value of the amount of future benefit that employees have earned in return for their service in the current and prior periods, less the fair value of any related assets. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.

(c) Retirement benefits: Defined contribution plans

For defined contribution plans, when an employee has rendered service to the Company during a period, the Company recognizes the contribution payable to a defined contribution plan in exchange for that service as an accrued expense, after deducting any contributions already paid. If the contributions already paid exceed the contribution due for service before the end of the reporting period, the Company recognizes that excess as an asset (prepaid expense) to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

(d) Retirement benefits: Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of plan assets is deducted. The calculation is performed annually by an independent actuary using the projected unit credit method.

The discount rate is the yield at the reporting date on corporate bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from actuarial assumption changes and experiential adjustments in other comprehensive income when incurred.

When the fair value of plan assets exceeds the present value of the defined benefit obligation, the Company recognizes an asset, to the extent of the present value of the total of cumulative any economic benefits available in the form of refunds from the plan or reduction in the future contributions to the plan.

Remeasurements of net defined benefit liabilities, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments, net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss in curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Provisions

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

Where some or all of the expenditures required to settle a provision are expected to be reimbursed by another party, the reimbursement shall be recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

A provision for warranties is recognized when the underlying products are sold. The provision is based on historical warranty.

Regarding provision for construction warranties, warranty period starts from the completion of construction in accordance with construction contracts. If the Company has an obligation for warranties, provision for warranties which are estimated based on historical warranty data are recorded as cost of construction and provision for warranties during the construction period.

A provision for restoration regarding contamination of land is recognized in accordance with the Company’s announced Environment Policy and legal requirement as needed.

A provision is used only for expenditures for which the provision was originally recognized.

Emission Rights

Emission Rights

The Company accounts for greenhouse gases emission right and the relevant liability as follows pursuant to the Act on Allocation and Trading of Greenhouse Gas Emission which became effective in Korea in 2015.

(a) Greenhouse Gases Emission Right

Greenhouse Gases Emission Right consists of emission allowances which are allocated from the government free of charge and those purchased from the market. The cost includes any directly attributable costs incurred during the normal course of business.

Emission rights held for the purpose of performing the obligation are classified as intangible asset and initially measured at cost and subsequently carried at cost less accumulated impairment losses. Emission rights held for short-swing profits are classified as current asset and are measured at fair value with any changes in fair value recognized as profit or loss in the respective reporting period.

The Company derecognizes an emission right asset when the emission allowance is unusable, disposed or submitted to government when the future economic benefits are no longer expected to be probable.

(b) Emission liability

Emission liability is a present obligation of submitting emission rights to the government with regard to emission of greenhouse gas. Emission liability is recognized when there is a high possibility of outflows of resources in performing the obligation and the costs required to perform the obligation are reliably estimable. Emission liability is an amount of estimated obligations for emission rights to be submitted to the government for the performing period. The emission liability is measured based on the expected quantity of emission for the performing period in excess of emission allowance in possession and the unit price for such emission rights in the market at the end of the reporting period.

Equity instruments

Equity instruments

(a) Share capital

Common stock is classified as equity and the incremental costs arising directly attributable to the issuance of common stock less their tax effects are deducted from equity.

If the Company reacquires its own equity instruments, the amount of those instruments (“treasury shares”) are presented as a contra equity account. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of its own equity instruments. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase to equity, and the resulting surplus or deficit on the transaction is recorded in capital surplus.

(b) Hybrid Bonds

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and an equity instrument. When the Company has an unconditional right to avoid delivering cash or another financial asset to settle a contractual obligation, the instruments are classified as equity instruments.

Revenue

Revenue

Revenue from the sale of goods, services provided and the use of assets is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates, which are not significant for all periods presented.

(a) Sale of goods

Revenue from the sale of goods in the ordinary course of activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. The appropriate timing for transfer of risks and rewards varies depending on the individual terms and conditions of the sales contract. For international sales, this timing depends on the type of international commercial terms of the contract.

(b) Construction contracts

Construction contracts of the Company primarily consist of contracts for the construction of plants and infrastructure facilities, and revenue recognition for different types of contracts is as follows:

When the outcome of a construction contract can be estimated reliably, contract revenue is recognized in profit or loss in proportion to the stage of completion of the contract. The stage of completion of a contract is determined based on the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Contract revenue includes the initial amount agreed in the contract plus any variation in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably.

When the outcome of a construction contract cannot be estimated reliably, the revenue is recognized only to the extent of contract costs incurred that it is probable will be recoverable. An expected loss on the construction contract is recognized as an expense immediately.

The Company has construction contracts in which control and the significant risks and rewards of ownership of the residential real estate are transferred to the buyer upon the delivery. Revenue and expenses from development and sale of these residential real estate are recognized when an individual unit of residential real estate is delivered to the buyer.

(c) Services rendered

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.

(d) Rental income

Rental income from investment property, net of lease incentives granted, is recognized in profit or loss on a straight-line basis over the term of the lease.

Finance income and finance costs

Finance income and finance costs

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on valuations of hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest rate method. Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established.

Finance costs comprise interest expense on borrowings and changes in the fair value of financial assets at fair value through profit or loss and loss on valuations of hedging instruments that are recognized in profit or loss. Borrowing costs are recognized in profit or loss using the effective interest rate method.

Income taxes

Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

The Company recognizes interest and penalties related to corporate income tax as if it is related to the income taxes, the Company applies IAS No. 12 “Income Taxes”, if it is not related to the income taxes, the Company applies IAS No. 37 “Provisions Contingent Liabilities and Contingent Assets”.

(a) Current income tax

Current income tax is the expected income tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and any adjustment to tax payable in respect of previous years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit of future periods, and non-taxable or non-deductible items from the accounting profit.

(b) Deferred income tax

The measurement of deferred income tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company recognizes a deferred income tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The Company recognizes a deferred income tax asset for deductible temporary differences arising from investments in subsidiaries, associates and joint ventures, to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized. However, deferred income tax is not recognized for the following temporary differences: taxable temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income.

The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and deferred income tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax assets and liabilities are offset only if there is a legally enforceable right to offset the related current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority and they intend to settle current income tax liabilities and assets on a net basis.

Earnings per share

Earnings per share

Management calculates basic earnings per share (“EPS”) data for POSCO’s ordinary shares, which is presented at the end of the statement of comprehensive income. Basic EPS is calculated by dividing profit attributable to ordinary shareholders of POSCO by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Operating segments

Operating segments

An operating segment is a component of the Company that: a) engages in business activities from which it may earn revenues and incur expenditures, including revenues and expenses that relate to transactions with any of the Company’s other components, b) whose operating results are regularly reviewed by the Company’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Management has determined that the CODM of the Company is the CEO.

With regard to construction segment, segment profit and loss is determined in the same way that consolidated profit after tax for the period is generally determined under IFRS except that revenues and expenses from the development and sale of certain residential real estate are determined by reference to the stage of completion of the contact activity at the end of the reporting period, while in the consolidated financial statements, they are recognized when an individual unit of residential real estate is delivered to the buyer. No adjustments are made for corporate allocations to segment profit and loss. In addition, segment assets and liabilities are generally measured based on total assets and liabilities in accordance with IFRS without any adjustment for corporate allocations, except that assets and liabilities in connection with the construction and sale of residential real estate are determined by reference to the stage of completion of the contract activity at the end of each period.

For the other segments, segment profit and loss is determined the same way that consolidated net after tax profit for the period is generally determined under IFRS without any adjustment for corporate allocations. The accounting policies used by each segment are consistent with the accounting policies used in the preparation of the consolidated financial statements. Segment assets and liabilities are generally measured based on total assets and liabilities in accordance with IFRS without any adjustment for corporate allocations. Also, segment assets and liabilities are based on the separate financial statements of the entities instead of on consolidated basis.

In addition, there are varying levels of transactions amongst the reportable segments. These transactions include sales of property, plant and assets, and rendering of construction service and so on.

Segment results that are reported to the CEO include items directly attributable to a segment and items allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

New standards and interpretations not yet adopted

New standards and interpretations not yet adopted

The Company will apply IFRS No. 9 “Financial Instruments” and IFRS No. 15 “Revenue from Contracts with Customers” for the year beginning on January 1, 2018. The Company has completed an analysis of the financial impacts resulting from adoption of new standards and the estimated effect on equity in the consolidated financial statements at the date of initial application based on available information which are summarized as follows.

	December 31, 2017			IFRS No. 9			IFRS No. 15			Date of initial application (January 1, 2018)
	(in millions of Won)
Reserves	￦	(682,556	)		(401,344	)		—			(1,083,900	)
Retained earnings		42,974,658			368,612			(71,066	)		43,272,204
Non-controlling interests		3,666,334			(19,545	)		(59,060	)		3,587,729
	￦	45,958,436			(52,277	)		(130,126	)		45,776,033

The above estimated amounts could differ from the actual impact when the Company adopts the new standards in 2018 for the following reasons.

• Changes in internal controls related to application of new standards

• Changes in the Company’s selection in accounting policy during the year ending December 31, 2018 when initial disclosure of the consolidated financial statements at the date of initial application is made

The following new standards, including IFRS No. 9 and IFRS No. 15, interpretations and amendments to existing standards have been published but are not mandatory for the Company for annual periods beginning on January 1, 2017, and the Company has not early adopted them.

(a) IFRS No. 9 “Financial Instruments”

IFRS No. 9 “Financial Instruments” regulates requirements for measurement and recognition of certain contracts in relation to trading financial assets and liabilities or non-financial items. It replaces existing guidance in IAS No. 39 “Financial Instruments: Recognition and Measurement”.

The standard will generally be applied retrospectively with some exemptions allowing an entity not to restate the comparative information for prior periods in relation to classification and measurement (including impairment) changes. Such exemptions will be applied by the Company. The Company will recognize the accumulated effect resulting from initial application of IFRS No. 9 as reserves, retained earnings and non-controlling interests of the Company at the date of initial application.

The standard’s expected impact on the consolidated financial statements are as follows.

1) Classification and measurement of financial assets

When applying IFRS No. 9, the classification of financial assets will be driven by the Company’s business model for managing the financial assets and contractual terms of cash flow.

The following table shows the classification of financial assets measured subsequently at amortized cost, at fair value through other comprehensive income and at fair value through profit or loss. If a hybrid contract contains a host that is a financial asset, the classification of the hybrid contract shall be determined for the entire contract without separating the embedded derivative.

Business model	Contractual cash flows are solely payments of principal and interests	All other cases
To collect contractual cash flows	Amortized cost (*1)	Fair value through profit or loss (*2)
Both to collect contractual cash flows and sell financial assets	Fair value through other comprehensive income (*1)
For trading, and others	Fair value through profit or loss

(*1) The Company may irrevocably designate as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch.

(*2) The Company may irrevocably designate equity investments that are not held for trading as at fair value through other comprehensive income.

As of December 31, 2017, the Company had financial asset at fair value through profit or loss of ￦67,021 million, available-for-sale financial assets of ￦1,978,115 million, financial assets held-to-maturity of ￦5,211 million, and loans and receivables of ￦21,268,107 million.

As a result of analysis of the impact on the consolidated financial statements, the Company expects that debt instruments whose contractual cash flows do not solely represent payments of principal and interest and those held for trading will be measured at fair value through profit or loss; loans and receivables whose contractual cash flows solely represent receipt of principal and interest but are not owned for the purpose of collection of contractual cash flows will be measured at fair value through other comprehensive income or fair value through profit or loss. Accordingly, the financial assets at fair value through profit or loss may increase upon adoption of IFRS No. 9 which may increase the volatility in profit or loss. The Company expects the application of IFRS No. 9 on these financial assets will not have a material impact on the consolidated financial statements.

In accordance with IFRS No. 9, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument which is not held for trading at initial recognition. As of December 31, 2017, the Company had equity instruments classified as financial assets available-for-sale for the purpose of long-term strategic plan and the fair value of the accompanying asset is ￦1,730,753 million. In accordance with IFRS No. 9, the Company expects to make an irrevocable election to classify the equity instrument as assets measured at fair value through other comprehensive income, for which all subsequent changes in fair value are recognized in other comprehensive income and not subsequently recycled to profit or loss. As of January 1, 2018, the date of initial application, the Company expects to recognize a decrease in reserves of ￦401,344 million and an increase in retained earnings of ￦401,344 million due to designation of equity instruments to fair value through other comprehensive income.

2) Impairment: Financial Assets and Contract Assets

IFRS No. 9 replaces the incurred loss model in the existing standard with a forward-looking expected credit loss model for debt instruments, lease receivables, contractual assets, loan commitments, and financial guarantee contracts.

Under IFRS No. 9, impairment losses are likely to be recognized earlier than using the incurred loss model under the existing guidance in IAS No. 39 as loss allowances will be measured either 12-month or lifetime expected credit loss based on the extent of increase in credit risk.

If credit risk has increased significantly since the initial recognition, a loss allowance for lifetime expected credit loss is required to be measured at the end of every reporting period. If credit risk has not increased significantly since the initial recognition, a loss allowance is measured based on 12-month expected credit loss.

If the financial instrument has low credit risk at the end of the reporting period, the Company may assume that the credit risk has not increased significantly since initial recognition. However, a loss allowance for lifetime expected credit losses is required for contract assets or trade receivables that do not contain a significant financing component. Additionally, the Company has elected to recognize lifetime expected credit losses for contract assets or trade receivables that contain a significant financing component.

The Company expects impairment losses of financial assets under IFRS No. 9 to be recognized earlier. As of January 1, 2018, the date of initial application, the Company expects to recognize an increase in loss allowance of ￦66,637 million and a decrease in retained earnings and non-controlling interests of ￦32,732 million and ￦19,545 million, respectively.

3) Classification and Measurement of Financial Liabilities

IFRS No. 9 mostly adheres to the existing requirements under IAS No. 39 regarding the classification of financial liabilities.

Under IAS No. 39, all financial liabilities designated at fair value through profit or loss recognized their fair value movements in profit or loss. However, IFRS No. 9 requires the amount of the change in the liability’s fair value attributable to changes in the credit risk to be recognized in other comprehensive income. Amounts presented in other comprehensive income are not subsequently transferred to profit or loss.

The Company did not designate financial liabilities as financial liability at fair value through profit or loss as of December 31, 2017 and expects the adoption of IFRS No. 9 will not have significant impact on the classification of financial liabilities.

4) Hedge Accounting

Regarding the initial application of IFRS No. 9, the Company may choose as its accounting policy choice to continue to apply all of the hedge accounting requirements of IAS No. 39 instead of the requirements of IFRS No. 9. The Company determined to consistently apply hedge accounting requirements of IAS No. 39.

(b) IFRS No. 15 “Revenue from Contracts with Customers”

IFRS No. 15 “Revenue from Contracts with Customers” provides a unified five-step model for determining the timing, measurement and recognition of revenue. It replaces existing revenue recognition guidance, including IAS No. 18 “Revenue”, IAS No. 11 “Construction Contracts”, SIC No. 31 “Revenue- Barter Transactions Involving Advertising Services”, IFRIC No. 13 “Customer Loyalty Programs”, IFRIC No. 15 “Agreements for the Construction of Real Estate”, and IFRIC No. 18 “Transfers of Assets from Customers”.

The Company intends to apply the modified retrospective approach by recognizing the cumulative impact of initially applying the revenue standard as of January 1, 2018, the date of initial application and the Company also decided to apply the practical expedients as allowed by IFRS No. 15 by applying the new standard only to those contracts that are not considered as completed contracts at the date of initial application. Accordingly, upon adoption of IFRS No. 15, the Company will not restate the financial statements for comparative periods.

Existing IFRS standards and interpretations including IAS No. 18 provide revenue recognition guidance by transaction types such as sales of goods, rendering of services, interest income, royalty income, dividend income and construction revenue; however, under the new standard, IFRS No. 15, the five-step approach (Step 1: Identify the contract(s) with a customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract, Step 5: Recognize revenue when the entity satisfied a performance obligation) is applied for all types of contracts or agreements.

The standard’s expected impact on the consolidated financial statements are as follows.

1) Identification of performance obligations

The Company holds certain contracts for sales of manufactured product and merchandise which include transportation service. When applying IFRS No. 15, sales of manufactured products or merchandise and delivery of products (i.e. shipping service) are identified as separate performance obligations in the contracts with customers. For transactions for which the shipping terms are on shipment basis and the customer pays shipping costs, the two performance obligations are separately accounted for because delivery of products is performed after the control over the products is transferred to the customer. The transaction price allocated to the performance obligation of delivery service will be recognized when the obligation of delivery of the product is completed.

The Company identified shipping service included in the sales contract as a separate performance obligation that will be satisfied over the promised service period. As of January 1, 2018, the date of initial application, change in relevant accounting policy is expected to result in decrease in retained earnings and non-controlling interests of ￦949 million and ￦156 million, respectively.

Certain construction contracts of the Company include design, purchase and construction services through separate service contracts. According to IFRS No. 15, if service or goods provided by the Company are highly dependent or correlated, the Company should identify them as a single performance obligation regardless of the number of contracts made.

The Company considered each service contract as a combined single obligation and therefore, upon adoption of IFRS No. 15 as of January 1, 2018, the date of initial application, the Company expects to recognize increases in retained earnings and non-controlling interests of ￦452 million and ￦628 million, respectively.

2) Variable consideration

Under IFRS No. 15, the Company estimates the amount of variable consideration by using the expected value which the Company expects to better predict the amount of consideration. The Company recognizes revenue with transaction price including variable consideration only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the refund period has lapsed.

In certain sales arrangements, unit price is subject to adjustment due to quality of products. A certain percentage of sales discount is also provided in case customers make payment before the settlement due date. In addition, certain service contracts are subject to compensation payment if the Company fails to achieve a promised level of obligation.

As of January 1, 2018, the date of initial application of IFRS No. 15, the adoption is expected to result in decrease in retained earnings of ￦2,773 million and increase in non-controlling interests of ￦88 million.

3) Performance obligation satisfied over time

In accordance with IFRS No. 15, revenue is recognized over time by measuring progress only if the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

The Company analyzed certain service contracts, where the Company provides manufacturing services for customized machinery. Currently the related revenue is recognized over the period when such services are provided. Under IFRS No. 15, as the Company does not have an enforceable right to payment for performance completed to date, the related revenue is recognized at the time when the machinery is delivered. As of January 1, 2018, the date of initial application, changes in accounting policy due to enforceable right to payment are expected to result in decreases in retained earnings and non-controlling interests of ￦1,188 million and ￦1,115 million, respectively.

According to IFRS No. 15, the effects of any inputs that do not depict the transfer of control of goods or services to the customer such as the costs of wasted materials, labor or other resources to fulfill the contract that were not reflected in the price of the contract should be excluded from calculating percentage of completion. As of January 1, 2018, the date of initial application, change in percentage of completion due to excessive use of materials is expected to result in decreases in retained earnings and non-controlling interests of ￦2,855 million and ￦1,512 million, respectively.

4) Incremental costs of obtaining a contract

In accordance with IFRS No. 15, the Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs, and costs that are recognized as assets are amortized over the period that the related goods or services are transferred to the customer.

Certain costs incurred in construction segment such as costs to obtain a contract that would have been incurred regardless of whether the contract was obtained should be recognized as an expense immediately, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained. Such costs have been previously capitalized if it is probable the related contracts will be entered into. As of January 1, 2018, the date of initial application, change in accounting policy regarding incremental costs of obtaining a contract is expected to result in decreases in retained earnings and non-controlling interests of ￦63,753 million and ￦56,993 million, respectively.

(c) IFRS No. 16 “Leases”

IFRS No. 16 “Leases” will replace IAS No. 17 “Leases” and IFRIC No. 4 “Determining whether an Arrangement contains a Lease”. It is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for a Company which has adopted IFRS No. 15.

As a lessee, the Company shall apply this standard using one of the following two methods; (a) retrospectively to each prior reporting period presented in accordance with IAS No. 8 “Accounting Policies, Changes in Accounting Estimates and Errors” but using the practical expedients for completed contracts- i.e. completed contracts as of the beginning of the earliest prior period presented are not restated; or (b) retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application.

IFRS No. 16 suggests a single accounting model that requires a lessee to recognize lease related asset and liability in the consolidated financial statements. A lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. The lessee may elect not to apply the requirements to short-term lease of which has a term of 12 months or less at the commencement date and low value assets. Accounting treatment for lessor is similar to the existing standard which classifies lease into finance and operating lease.

Application of IFRS No. 16 will change current operating lease expense which has been recognized in straight-line method into depreciation expense of right-of-use asset and interest expense of lease liability, and therefore, nature of expense recognized in relation to lease will change. However, it is expected that there will be no significant impact on finance lease.

The Company has not yet initiated the preparation for the application of IFRS No. 16 and has not performed an assessment of the impact resulting from the application of IFRS No. 16. The Company will complete the analysis of financial impacts arising from applying this standard in 2018.

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General Information (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

POSCO's Shareholders

As of December 31, 2017, POSCO’s shareholders are as follows:

Shareholder’s name	Number of shares		Ownership (%)
National Pension Service		9,660,885		11.08
Nippon Steel & Sumitomo Metal Corporation(*1)		2,894,712		3.32
BlackRock Institutional Trust Company, N.A.(*1)		2,483,875		2.85
Government of Singapore Investment Corp Private Limited		1,934,312		2.22
KB Financial Group Inc. and subsidiaries(*2)		1,919,361		2.20
Others		68,293,690		78.33
		87,186,835		100.00

(*1) Includes American Depository Receipts (ADRs) of POSCO, each of which represents 0.25 share of POSCO’s common share which has par value of ￦5,000 per share.

(*2) Includes shares held by subsidiaries pursuant to Articles of Incorporation.

Details of Consolidated Subsidiaries

As of December 31, 2017, the shares of POSCO are listed on the Korea Exchange, while its ADRs are listed on the New York Stock Exchange.

(b) Consolidated subsidiaries

Details of consolidated subsidiaries as of December 31, 2016 and 2017 are as follows:

	Principal operations	Ownership (%)
		December 31, 2016						December 31, 2017
		POSCO		Subsidiaries		Total		POSCO		Subsidiaries		Total		Region
[Domestic]
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	Engineering and construction		52.80		—		52.80		52.80		—		52.80		Pohang
POSCO Processing & Service	Steel sales and trading		93.95		0.45		94.40		93.95		0.45		94.40		Seoul
POSCO COATED & COLOR STEEL Co., Ltd.	Coated steel manufacturing		56.87		—		56.87		56.87		—		56.87		Pohang
POSCO ICT	Computer hardware and software distribution		65.38		—		65.38		65.38		—		65.38		Pohang
POSCO Research Institute	Economic research and consulting		100.00		—		100.00		100.00		—		100.00		Seoul
POSMATE	Business facility maintenance		57.25		11.05		68.30		83.83		16.17		100.00		Seoul
POSCO A&C	Architecture and consulting		100.00		—		100.00		100.00		—		100.00		Seoul
POSCO Venture Capital Co., Ltd.	Investment in venture companies		95.00		—		95.00		95.00		—		95.00		Pohang
eNtoB Corporation	Electronic commerce		7.50		53.63		61.13		7.50		53.63		61.13		Seoul
POSCO CHEMTECH	Refractories manufacturing and sales		60.00		—		60.00		60.00		—		60.00		Pohang
POSCO-Terminal Co., Ltd.	Transporting and warehousing		51.00		—		51.00		51.00		—		51.00		Gwangyang
POSCO M-TECH	Packing materials manufacturing and sales		48.85		—		48.85		48.85		—		48.85		Pohang
POSCO ENERGY CO., LTD.	Generation of electricity		89.02		—		89.02		89.02		—		89.02		Seoul
POSCO NIPPON STEEL RHF JOINT VENTURE.CO.,Ltd.	Steel byproduct manufacturing and sales		70.00		—		70.00		70.00		—		70.00		Pohang
MegaAsset Co.,Ltd.	Real estate rental and sales		—		100.00		100.00		—		100.00		100.00		Incheon
Future Creation Fund Postech Early Stage account	Investment in venture companies		—		40.00		40.00		—		40.00		40.00		Seoul
POSCO WOMAN’S FUND	Investment in venture companies		—		40.00		40.00		—		40.00		40.00		Seoul
POSPOWER Co., Ltd.	Generation of electricity		—		100.00		100.00		—		100.00		100.00		Samcheok
Songdo Posco Family housing	House manufacturing and management		—		100.00		100.00		—		100.00		100.00		Incheon
Posco Group University	Education service and real estate business		100.00		—		100.00		100.00		—		100.00		Incheon
HOTEL LAONZENA	Hotel business		—		100.00		100.00		—		100.00		100.00		Daegu
Growth Ladder POSCO K-Growth Global Fund	Investment in venture companies		—		50.00		50.00		—		50.00		50.00		Pohang
2015 POSCO New technology II Fund	Investment in venture companies		—		25.00		25.00		—		25.00		25.00		Pohang
POCA STEM Co., Ltd	Stem cell medicine development		—		100.00		100.00		—		100.00		100.00	Seoul
Posco e&c Songdo International Building	Non-residential building rental		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO ES MATERIALS CO., Ltd.	Secondary and storage battery manufacturing		75.32		—		75.32		75.32		—		75.32	Gumi
Poscoene	Refuse derived fuel and power generation		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO Humans	Construction		90.30		—		90.30		90.30		—		90.30	Pohang
Mapo Hibroad Parking co., Ltd.	Construction		—		70.99		70.99		—		71.00		71.00	Seoul
BLUE O&M Co.,Ltd.	Engineering service		—		100.00		100.00		—		100.00		100.00	Pohang
Busan E&E Co,. Ltd.	Refuse derived fuel and power generation		70.00		—		70.00		70.00		—		70.00	Busan
POSCO Family Strategy Fund	Investment in venture companies		69.91		30.09		100.00		69.91		30.09		100.00	Pohang
POSCO DAEWOO Corporation	Trading, energy & resource development and others		60.31		—		60.31		62.90		0.04		62.94	Seoul
Pohang Scrap Recycling Distribution Center Co., Ltd.	Steel processing and sales		—		51.00		51.00		—		51.00		51.00	Pohang
PSC Energy Global Co., Ltd.	Investment in energy industry		—		100.00		100.00		—		100.00		100.00	Pohang
Suncheon Eco Trans Co., Ltd	Train manufacturing and management		100.00		—		100.00		100.00		—		100.00	Suncheon
POSCO Research & Technology	Intellectual Property Services and consulting		—		—		—		100.00		—		100.00	Seoul
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2	Private equity trust		—		—		—		97.47		—		97.47	Seoul
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5	Private equity trust		—		—		—		—		99.67		99.67	Seoul
Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust	Private equity trust		—		—		—		99.01		—		99.01	Seoul
IT Engineering CO. Ltd	Automotive engineering service		—		17.00		17.00		—		—		—	Seoul
POSCO Engineering CO.,Ltd	Construction and engineering service		—		95.56		95.56		—		—		—	Incheon
[Foreign]
POSCO America Corporation	Steel trading		99.45		0.55		100.00		99.45		0.55		100.00	USA
POSCO AUSTRALIA PTY LTD	Raw material sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Canada Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO Asia Co., Ltd.	Steel and raw material trading		100.00		—		100.00		100.00		—		100.00	China
POSCO-CTPC Co., Ltd.	Steel manufacturing and sales		56.60		43.40		100.00		56.60		43.40		100.00	China
POSCO E&C Vietnam Co., Ltd.	Steel structure manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Vietnam
Zhangjiagang Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		58.60		23.88		82.48		58.60		23.88		82.48	China
POSCO(Guangdong) Coated Steel Co., Ltd.	Plating steel sheet manufacturing and sales		87.04		10.04		97.08		87.04		10.04		97.08	China
POSCO (Thailand) Company Limited	Steel manufacturing and sales		85.62		14.38		100.00		88.58		11.42		100.00	Thailand
Myanmar POSCO Steel Co., Ltd	Zinc relief manufacturing and sales		70.00		—		70.00		70.00		—		70.00	Myanmar
POSCO-MKPC SDN BHD	Steel manufacturing and sales		44.69		25.31		70.00		44.69		25.31		70.00	Malaysia
Qingdao Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		70.00		30.00		100.00		70.00		30.00		100.00	China
POSCO(Suzhou) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-China Qingdao Processing Center Co., Ltd.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
POS-ORE PTY LTD	Iron ore sales and sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-China Holding Corp.	Holding company		100.00		—		100.00		100.00		—		100.00	China
POSCO JAPAN Co., Ltd.	Steel trading		100.00		—		100.00		100.00		—		100.00	Japan
POS-CD PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POS-GC PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-India Private Limited	Steel manufacturing and sales		99.99		—		99.99		99.99		—		99.99	India
POSCO-India Pune Processing Center. Pvt. Ltd.	Steel manufacturing and sales		65.00		—		65.00		65.00		—		65.00	India
POSCO Japan PC CO., LTD	Steel manufacturing and sales		—		86.12		86.12		—		86.12		86.12	Japan
POSCO-CFPC Co., Ltd.	Steel manufacturing and sales		39.60		60.40		100.00		39.60		60.40		100.00	China
POSCO E&C CHINA Co., Ltd.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	China
POSCO MPPC S.A. de C.V.	Steel manufacturing and sales		—		95.00		95.00		21.02		75.29		96.31	Mexico
Zhangjigang Pohang Port Co., Ltd.	Loading and unloading service		—		100.00		100.00		—		100.00		100.00	China
POSCO-VIETNAM Co., Ltd.	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Vietnam
POSCO MEXICO S.A. DE C.V.	Automotive steel sheet  manufacturing and sales		84.84		15.16		100.00		84.84		15.16		100.00	Mexico
POSCAN Elkview	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO-Poland Wroclaw Processing Center Sp. z o. o.	Steel manufacturing and sales		60.00		—		60.00		60.00		—		60.00	Poland
POS-NP PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO RUS LLC	Trading and business development		90.00		10.00		100.00		90.00		10.00		100.00	Russia
POSCO DAEWOO WAIGAIQIAO SHANGHAI CO., LTD	Intermediary trade & bonded  warehouse operation		—		100.00		100.00		—		100.00		100.00	China
PT. Bio Inti Agrindo	Forest resources development		—		85.00		85.00		—		85.00		85.00	Indonesia
POSCO ENGINEERING AND CONSTRUCTION AUSTRALIA PTY LTD	Iron ore development and sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd.	Steel manufacturing and sales		50.00		10.00		60.00		50.00		10.00		60.00	China
POSCO Thainox Public Company Limited	STS cold-rolled steel manufacturing and sales		84.93		—		84.93		84.88		—		84.88	Thailand
Hunchun Posco Hyundai Logistics	Logistics		—		80.00		80.00		—		80.00		80.00	China
POSCO DAEWOO VIETNAM CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO(Chongqing) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
SUZHOU POSCO-CORE TECHNOLOGY CO., LTD.	Component manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
PT.Krakatau Posco Chemtech Calcination	Quicklime manufacturing and sales		—		80.00		80.00		—		80.00		80.00	Indonesia
POSCO AFRICA (PROPRIETARY) LIMITED	Mine development		100.00		—		100.00		100.00		—		100.00	South Africa
POSCO ICT BRASIL	IT service and engineering		—		100.00		100.00		—		100.00		100.00	Brazil
LA-SRDC	Scrap manufacturing		—		100.00		100.00		—		100.00		100.00	USA
DONG FANG JIN HONG	Real estate development, rental and management		—		100.00		100.00		—		100.00		100.00	China
POSCO AMERICA COMERCIALIZADORA S DE RL DE CV	Human resource service		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO(Guangdong) Automotive Steel Co., Ltd.	Steel manufacturing and sales		83.64		10.00		93.64		83.64		10.00		93.64	China
POSCO-Malaysia SDN. BHD.	Steel manufacturing and sales		81.79		13.63		95.42		81.79		13.63		95.42	Malaysia
PT KRAKATAU BLUE WATER	Wastewater treatment facilities  operation and maintenance		—		67.00		67.00		—		67.00		67.00	Indonesia
POSCO DAEWOO MYANMAR CORPORATION LIMITED	Trading business		—		100.00		100.00		—		100.00		100.00	Myanmar
POSCO-Italy Processing Center	Stainless steel sheet manufacturing and sales		80.00		10.00		90.00		80.00		10.00		90.00	Italy
POSCO DAEWOO E&P CANADA CORPORATION	Crude oil and natural gas mining		—		100.00		100.00		—		100.00		100.00	Canada
Myanmar POSCO C&C Company, Limited.	Steel manufacturing and sales		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO ICT VIETNAM	IT service and electric control engineering		—		100.00		100.00		—		100.00		100.00	Vietnam
Daewoo Global Development. Pte., Ltd	Real estate development		—		51.00		51.00		—		81.51		81.51	Myanmar
Myanmar POSCO Engineering & Construction Company, Limited.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Myanmar
POS-Minerals Corporation	Mine development management and sales		—		100.00		100.00		—		100.00		100.00	USA
POSCO(Wuhu) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		68.57		31.43		100.00		68.57		31.43		100.00	China
POSCO Engineering and Construction India Private Limited	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	India
POSCO COATED STEEL (THAILAND) CO., LTD.	Automotive steel sheet manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Thailand
Daewoo Amara Company Limited	Real estate development		—		98.54		98.54		—		85.00		85.00	Myanmar
Daewoo Power and Infra (PTY) Limited	Electricity		—		100.00		100.00		—		100.00		100.00	South Africa
POSMATE-CHINA CO., LTD	Business facility maintenance		—		100.00		100.00		—		100.00		100.00	China
Daewoo Precious Resources Co., Ltd.	Resources development		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO-Mexico Villagran Wire-rod Processing Center	Steel manufacturing and sales		56.75		10.00		66.75		56.75		10.00		66.75	Mexico
POSCO-CDSFC	Steel structure manufacturing		50.20		49.80		100.00		50.20		49.80		100.00	China
POSCO ChengDu Processing Center	Steel manufacturing and sales		33.00		10.00		43.00		33.00		10.00		43.00	China
POSCO SUZHOU Processing Center Co., Ltd.	Steel manufacturing and sales		30.00		70.00		100.00		30.00		70.00		100.00	China
POSCO E&C SMART S DE RL DE CV	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO Philippine Manila Processing Center, Inc.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C HOLDINGS CO., Ltd.	Holding company		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO E&C (THAILAND) CO., Ltd.	Construction and engineering		—		100.00		100.00		—		100.00		100.00	Thailand
Daewoo Power PNG Ltd.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT.Krakatau Posco Social Enterprise	Social enterprise		—		100.00		100.00		—		100.00		100.00	Indonesia
Ventanas Philippines Construction Inc	Construction		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C Mongolia	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Mongolia
POSCO Gulf SFC LLC	Steel manufacturing and sales		—		81.93		81.93		—		97.76		97.76	United Arab Emirates
SANPU TRADING Co., Ltd.	Raw material trading		—		70.00		70.00		—		70.00		70.00	China
Zhangjiagang BLZ Pohang International Trading	Steel Intermediate trade		—		100.00		100.00		—		100.00		100.00	China
POSCO MESDC S.A. DE C.V.	Logistics & Steel sales		—		56.80		56.80		—		56.80		56.80	Mexico
POSCO ICT-China	IT service and DVR business		—		100.00		100.00		—		100.00		100.00	China
Pos-Sea Pte Ltd	Steel Intermediate trade		—		67.54		67.54		—		100.00		100.00	Singapore
POSCO Europe Steel Distribution Center	Logistics & Steel sales		50.00		20.00		70.00		50.00		20.00		70.00	Slovenia
POSCO ENGINEERING (THAILAND) CO., LTD.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO VST CO., LTD.	Stainless steel sheet manufacturing and sales		95.65		—		95.65		95.65		—		95.65	Vietnam
POSCO Maharashtra Steel Private Limited	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	India
POSCO India Chennai Steel Processing Center Pvt. Ltd.	Steel manufacturing and sales		100.00		—		100.00		93.34		1.98		95.32	India
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Turkey
POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO VNPC Co., Ltd.)	Steel manufacturing and sales		70.00		—		70.00		83.54		5.29		88.83	Vietnam
POSCO(Liaoning) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-Indonesia Jakarta Processing Center	Steel manufacturing and sales		65.00		20.00		85.00		65.00		20.00		85.00	Indonesia
POSCO E&C VENEZUELA C.A.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Venezuela
PT.MRI	Mine development		65.00		—		65.00		65.00		—		65.00	Indonesia
POSCO TMC INDIA PRIVATE LIMITED	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	India
POSCO-AAPC	Steel manufacturing and sales		—		97.80		97.80		—		97.80		97.80	USA
PT PEN INDONESIA	Construction		—		100.00		100.00		—		100.00		100.00	Indonesia
POSCO(Yantai) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO India Steel Distribution Center Private Ltd.	Steel logistics		—		100.00		100.00		—		100.00		100.00	India
POSCO China Dalian Plate Processing Center Co., Ltd.	Plate manufacturing and sales		80.00		10.00		90.00		80.00		10.00		90.00	China
POSCO-South Asia Company Limited	Steel sales		100.00		—		100.00		100.00		—		100.00	Thailand
POSCO SS-VINA Co., Ltd	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Vietnam
PT.POSCO ICT INDONESIA	IT service and electric control engineering		—		66.99		66.99		—		66.99		66.99	Indonesia
POSCO NCR Coal Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO WA PTY LTD	Iron ore sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Engineering and Construction - UZ	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO AUSTRALIA GP PTY LIMITED	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO DAEWOO POWER (PNGPOM) LTD.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT. KRAKATAU POSCO ENERGY	Electricity production construction and operation		—		90.00		90.00		—		90.00		90.00	Indonesia
POSCO DAEWOO AMERICA CORP.	Trading business		—		100.00		100.00		—		100.00		100.00	USA
POSCO DAEWOO DEUTSCHLAND GMBH	Trading business		—		100.00		100.00		—		100.00		100.00	Germany
POSCO DAEWOO JAPAN Corp	Trading business		—		100.00		100.00		—		100.00		100.00	Japan
POSCO DAEWOO SINGAPORE PTE LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	Singapore
POSCO DAEWOO ITALIA S.R.L.	Trading business		—		100.00		100.00		—		100.00		100.00	Italy
POSCO DAEWOO CHINA CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	China
Daewoo Textile LLC	Textile manufacturing		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO DAEWOO AUSTRALIA HOLDINGS PTY. LTD.	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO MAURITIUS LIMITED	Coal development and sales		—		100.00		100.00		—		100.00		100.00	Mauritius
PT. KRAKATAU POSCO	Steel manufacturing and sales		70.00		—		70.00		70.00		—		70.00	Indonesia
POSCO DAEWOO MEXICO S.A. de C.V.	Trading business		—		100.00		100.00		—		100.00		100.00	Mexico
Daewoo International Guangzhou Corp.	Trading business		—		100.00		100.00		—		100.00		100.00	China
POSCO DAEWOO MALAYSIA SDN BHD	Trading business		—		100.00		100.00		—		100.00		100.00	Malaysia
PT.POSCO INDONESIA INTI	Mine development		99.99		—		99.99		99.99		—		99.99	Indonesia
POSCO DAEWOO SHANGHAI CO., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	China
PGSF, L.P.	Investment in bio tech Industry		—		100.00		100.00		—		100.00		100.00	USA
POSCO DAEWOO INDIA PVT., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	India
POSCO(Dalian) IT Center Development Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	China
PT. POSCO E&C INDONESIA	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Indonesia
HUME COAL PTY LTD	Raw material manufacturing		—		100.00		100.00		—		100.00		100.00	Australia
Brazil Sao Paulo Steel Processing Center	Steel manufacturing and sales		—		76.00		76.00		—		76.00		76.00	Brazil
DAESAN (CAMBODIA) Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Cambodia
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	Construction		—		100.00		100.00		—		100.00		100.00	Brazil
POSCO ASSAN TST STEEL INDUSTRY	Steel manufacturing and sales		60.00		10.00		70.00		60.00		10.00		70.00	Turkey
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Hong Kong
Zhangjiagang Pohang Refractories Co., Ltd. (*1)	Refractory materials sales & furnace maintenance		—		—		—		—		51.00		51.00	China
Golden Lace DAEWOO Company Limited	Rice processing		—		—		—		—		60.00		60.00	Myanmar
POSCO RU Limited Liability Company	Trade and business development		—		—		—		100.00		—		100.00	Russia
POSCO DAEWOO UKRAINE LLC	Grain sales		—		—		—		—		100.00		100.00	Ukraine
KIS Devonian Canada Corporation	Petroleum gas extraction		—		—		—		—		100.00		100.00	Canada
POSEC Hawaii, Inc.	Real estate Industry		—		100.00		100.00		—		—		—	USA
POSCO India Delhi Steel Processing Center Private Limited	Steel manufacturing and sales		66.40		10.00		76.40		—		—		—	India
USA-SRDC	Scrap sales		—		100.00		100.00		—		—		—	USA
POSCO-Vietnam Processing Center Co., Ltd.	Steel manufacturing and sales		87.07		4.98		92.05		—		—		—	Vietnam
POSCO MAPC SA DE CV	Automotive steel sheet manufacturing and sales		80.00		20.00		100.00		—		—		—	Mexico
Yingkou Puxiang Trade Co.,Ltd.	Refractory quality test & import and export		—		100.00		100.00		—		—		—	China
SANTOS CMI Guatemala S.A.	Construction and engineering service		—		100.00		100.00		—		—		—	Guatemala
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd.	Steel manufacturing and sales		100.00		—		100.00		—		—		—	India
COINSA INGENIERIA Y PETROQUIMICA S.R.L	Construction		—		50.00		50.00		—		—		—	Bolivia
POSCO VIETNAM HOLDINGS CO., LTD	Holding company		79.28		20.72		100.00		—		—		—	Vietnam
Kwanika Copper Corporation  (formerly, Daewoo Minerals  Canada Corporation) (*2)	Resources development		—		100.00		100.00		—		—		—	Canada
Chongqing POSCO CISL Automotive Steel Co., Ltd.	Automotive steel sheet manufacturing and sales		51.00		—		51.00		—		—		—	China
POSCO YongXin Rare Earth Metal Co., Ltd.	Magnet material manufacturing and sales		—		51.60		51.60		—		—		—	China
PT. POSCO MTECH INDONESIA	Steelmaking materials manufacturing and sales		—		99.98		99.98		—		—		—	Indonesia
POSCO (Zhangjiagang) STS Processing Center Co., Ltd	Steel manufacturing and sales		—		100.00		100.00		—		—		—	China
EPC EQUITIES LLP	Engineering, procurement and construction		—		80.00		80.00		—		—		—	England
SANTOS CMI CONSTRUCTION TRADING LLP	Engineering, procurement and construction		—		99.90		99.90		—		—		—	England
SANTOS CMI INC. USA	Engineering, procurement and construction		—		100.00		100.00		—		—		—	USA
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA	Engineering, procurement and construction		—		99.98		99.98		—		—		—	Brazil
SANTOS CMI PERU S.A.	Engineering, procurement and construction		—		99.99		99.99		—		—		—	Peru
SANTOS CMI CONSTRUCCIONES S.A.	Engineering, procurement and construction		—		100.00		100.00		—		—		—	Uruguay
GENTECH INTERNATIONAL INC.	Engineering, procurement and construction		—		90.00		90.00		—		—		—	Panama
SANTOS CMI S.A.	Engineering, procurement and construction		—		80.00		80.00		—		—		—	Ecuador
SANTOS CMI CONSTRUCCIONES DE CHILE S.A.	Engineering, procurement and construction		—		99.00		99.00		—		—		—	Chile
COMPANIA DE AUTOMATIZACION &CONTROL, GENESYS S.A.	Engineering, procurement and construction		—		90.00		90.00		—		—		—	Ecuador
POSCO Electrical Steel India Private Limited	Electrical steel manufacturing and sales		100.00		—		100.00		—		—		—	India

(*1) Reclassified to subsidiary from associate during the year ended December 31, 2017.

(*2) Reclassified to joint venture from subsidiary during the year ended December 31, 2017.

Details of Non-controlling Interest

Details of non-controlling interest as of and for the years ended December 31, 2015, 2016 and 2017 are as follows:

1) December 31, 2015

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	3,930,857			441,999			360,812			5,115,325			590,460			9,648,917			20,088,370
Non-current assets		4,777,482			3,363,935			248,549			1,756,367			3,333,351			7,776,264			21,255,948
Current liabilities		(3,568,714	)		(1,004,002	)		(106,167	)		(3,125,697	)		(663,945	)		(9,692,004	)		(18,160,529	)
Non-current liabilities		(1,941,909	)		(2,315,554	)		(5,405	)		(768,529	)		(2,420,547	)		(2,567,980	)		(10,019,924	)
Equity		3,197,716			486,378			497,789			2,977,466			839,319			5,165,197			13,163,865
Non-controlling interests		1,269,096			145,913			199,116			1,405,391			535,878			1,182,137			4,737,531
Sales		16,890,723			1,227,266			1,175,272			6,866,802			1,909,919			25,784,254			53,854,236
Profit (loss) for the period		79,092			(398,438	)		35,516			108,895			15,831			(835,389	)		(994,493	)
Profit (loss) attributable to non-controlling interests		31,390			(119,531	)		14,206			51,399			1,738			(247,106	)		(267,904	)
Cash flows from operating activities		433,493			(13,595	)		19,921			434,257			6,075			(72,371	)		807,780
Cash flows from investing activities		(74,644	)		(8,994	)		25,318			21,075			(20,980	)		(110,712	)		(168,937	)
Cash flows from financing activities (before dividends to non-controlling interest)		(340,532	)		18,886			66			69,615			11,572			289,715			49,322
Dividend to non-controlling interest		(22,597	)		—			(4,135	)		(703	)		(24,125	)		(145,582	)		(197,142	)
Effect of exchange rate fluctuation on cash held		430			83			—			819			—			3,502			4,834
Net increase (decrease) in cash and cash equivalents		(3,850	)		(3,620	)		41,170			525,063			(27,458	)		(35,448	)		495,857

2) December 31, 2016

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	4,038,313			460,376			397,370			5,163,436			713,039			9,696,140			20,468,674
Non-current assets		4,510,085			3,304,292			243,401			1,710,398			3,038,665			7,749,277			20,556,118
Current liabilities		(3,662,811	)		(1,120,077	)		(109,016	)		(3,284,090	)		(937,668	)		(9,669,053	)		(18,782,715	)
Non-current liabilities		(1,681,182	)		(2,337,612	)		(2,337	)		(855,791	)		(2,172,226	)		(2,856,498	)		(9,905,646	)
Equity		3,204,405			306,979			529,418			2,733,953			641,810			4,919,866			12,336,431
Non-controlling interests		1,271,750			92,094			211,767			1,290,450			514,200			945,962			4,326,223
Sales		15,417,550			1,244,711			1,076,455			5,352,395			1,657,890			23,251,563			48,000,564
Profit (loss) for the period		113,832			(187,151	)		41,829			(760,187	)		(130,809	)		(461,034	)		(1,383,520	)
Profit (loss) attributable to non-controlling interests		45,177			(56,145	)		16,732			(358,815	)		(14,357	)		(312,297	)		(679,705	)
Cash flows from operating activities		337,338			45,672			30,295			(211,182	)		18,107			53,050			273,280
Cash flows from investing activities		(35,054	)		(8,804	)		(42,021	)		(102,939	)		(1,047	)		(253,206	)		(443,071	)
Cash flows from financing activities (before dividends to non-controlling interest)		(295,226	)		(36,286	)		(1,250	)		(20,953	)		(2,875	)		204,797			(151,793	)
Dividend to non-controlling interest		(22,597	)		—			(4,726	)		(14,800	)		(24,378	)		(7,349	)		(73,850	)
Effect of exchange rate fluctuation on cash held		10			67			1			760			—			1,687			2,525
Net increase (decrease) in cash and cash equivalents		(15,529	)		649			(17,701	)		(349,114	)		(10,193	)		(1,021	)		(392,909	)

3) December 31, 2017

	POSCO DAEWOO Corporation			PT. KRAKATAU POSCO			POSCO CHEMTECH			POSCO ENGINEERING & CONSTRUCTION CO., LTD.			POSCO ENERGY CO., LTD.			Others			Total
	(in millions of Won)
Current assets	￦	4,483,544			557,041			441,325			4,878,251			1,054,538			8,579,813			19,994,512
Non-current assets		4,590,394			2,771,504			316,724			2,444,616			2,859,824			6,676,559			19,659,621
Current liabilities		(4,221,443	)		(1,237,255	)		(145,649	)		(3,896,680	)		(785,462	)		(8,313,902	)		(18,600,391	)
Non-current liabilities		(1,549,013	)		(1,933,247	)		(970	)		(833,403	)		(2,200,065	)		(2,048,454	)		(8,565,152	)
Equity		3,303,482			158,043			611,430			2,592,784			928,835			4,894,016			12,488,590
Non-controlling interests		1,224,303			47,413			244,572			1,223,816			762,390			974,941			4,477,435
Sales		20,891,526			1,635,837			1,163,918			5,794,532			1,578,026			23,547,072			54,610,911
Profit (loss) for the period		115,321			(117,729	)		101,019			169,011			70,795			258,053			596,470
Profit (loss) attributable to non-controlling interests		42,739			(35,318	)		40,408			79,775			7,770			39,605			174,979
Cash flows from operating activities		128,875			(27,817	)		20,042			(84,840	)		30,295			140,418			206,973
Cash flows from investing activities		(86,365	)		(5,502	)		(18,699	)		(171,924	)		(2,792	)		(63,621	)		(348,903	)
Cash flows from financing activities (before dividends to non-controlling interest)		(19,295	)		31,782			8			150,801			220,317			(38,090	)		345,523
Dividend to non-controlling interest		(22,597	)		—			(7,088	)		—			(24,183	)		(12,777	)		(66,645	)
Effect of exchange rate fluctuation on cash held		(459	)		(147	)		(6	)		(3,541	)		—			(15,532	)		(19,685	)
Net increase (decrease) in cash and cash equivalents		159			(1,684	)		(5,743	)		(109,504	)		223,637			10,398			117,263

Details of Associates

Details of associates and joint ventures

1) Associates

Details of associates as of December 31, 2016 and 2017 are as follows:

		Ownership (%)
Investee	Category of business	2016		2017		Region
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	Investment in new technologies		29.37		31.14		Seoul
POSCO PLANTEC Co., Ltd. (*2)	Construction of industrial plant		73.94		73.94		Ulsan
SNNC	Raw material manufacturing and sales		49.00		49.00		Gwangyang
QSONE Co.,Ltd.	Real estate rental and facility management		50.00		50.00		Seoul
Chun-cheon Energy Co., Ltd	Electricity generation		29.90		45.67		Chuncheon
Incheon-Gimpo Expressway Co., Ltd. (*1)	Construction		20.04		18.26		Anyang
BLUE OCEAN Private Equity Fund	Private equity financial		27.52		27.52		Seoul
UITrans LRT Co., Ltd.	Transporting		38.19		38.19		Seoul
Keystone NO. 1. Private Equity Fund	Private equity financial		40.45		40.45		Seoul
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd	Real estate development		29.53		29.53		Chungju
Daesung Steel (*1)	Steel sales		17.54		17.54		Busan
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund (*1)	Investment in new technologies		12.50		12.50		Seoul
KONES, Corp.	Technical service		41.67		41.67		Gyeongju
Gale International Korea, LLC	Real estate rental		29.90		29.90		Seoul
Pohang Techno Valley PFV Corporation (*3)	Real estate development, supply and rental		30.28		57.39		Pohang
Gunggi Green Energy (*1)	Electricity generation		19.00		19.00		Hwaseong
Pohang Special Welding Co.,Ltd.	Welding material and tools manufacturing and sales		50.00		50.00		Pohang
KC Chemicals CORP (*1)	Machinery manufacturing		19.00		19.00		Hwaseong
Posco-IDV Growth Ladder IP Fund (*1)	Investment in new technologies		17.86		17.86		Seoul
DAEHO GLOBAL MANAGEMENT CO., LTD.	Investment advisory service		35.82		35.82		Pohang
Clean Gimpo Co., Ltd.	Construction		29.58		29.58		Gimpo
Postech Early Stage Fund (*1)	Investment in new technologies		10.00		10.00		Pohang
POSCO Energy Valley Fund	Investment in new technologies		20.00		20.00		Pohang
Pureun Tongyeong Enviro Co., Ltd.	Sewerage treatment		20.40		20.40		Tongyeong
Posgreen Co., Ltd. (*1)	Lime and plaster manufacturing		19.00		19.00		Gwangyang
Pohang E&E Co,. Ltd.	Investment in waste energy		30.00		30.00		Pohang
POSTECH Social Enterprise Fund (*1)	Investment in new technologies		9.17		9.17		Seoul
Applied Science Corp.	Machinery manufacturing		24.88		23.87		Paju
Noeul Green Energy (*1)	Electricity generation		10.00		10.00		Seoul
Pohang Techno Valley AMC	Construction		29.50		29.50		Pohang
New Songdo International City Development, LLC	Real estate rental		29.90		29.90		Seoul
Mokpo Deayang Industrial Corporation	Real estate development and rental		27.40		27.40		Mokpo
Clean Iksan Co., Ltd.	Construction		23.50		23.50		Iksan
Innovalley Co., Ltd.	Real estate development		28.77		28.77		Yongin
Pure Gimpo Co., Ltd.	Construction		28.79		28.79		Seoul
Garolim Tidal Power Plant Co.,Ltd	Tidal power plant construction and management		32.13		32.13		Seosan
2016 PoscoPlutus New Technology Investment Fund	Investment in new technologies		25.17		25.17		Seoul
Hyundai Invest Guggenheim CLO Private Special Asset Investment Trust II	Investment in new technologies		38.47		38.47		Seoul
PoscoPlutus Bio Fund (*1)	Investment in new technologies		11.97		11.97		Seoul
PoscoPlutus Project Fund (*1)	Investment in new technologies		11.91		11.91		Seoul
Posco Agrifood Export Investment Fund	Investment in new technologies		30.00		30.00		Seoul
PoscoPlutus Project II Investment Fund (*1)	Investment in new technologies		0.61		0.61		Seoul
Posco Culture Contents Fund	Investment in new technologies		31.67		31.67		Seoul
PCC Centroid 1st Fund (*4)	Investment in new technologies		—		24.10		Seoul
PCC Amberstone Private Equity Fund I (*1,4)	Investment in new technologies		—		9.71		Seoul
POSCO Advanced Technical Staff Fund (*1,4)	Investment in new technologies		—		15.87		Seoul
POSCO 4th Industrial Revolution Fund (*4)	Investment in new technologies		—		20.00		Seoul
METAPOLIS Co.,Ltd. (*6)	Multiplex development		40.05		—		Hwaseong
Universal Studios Resort Asset Management Corporation(*5)	Real estate services		26.17		—		Seoul
Busan-Gimhae Light Rail Transit Co., Ltd. (*5)	Transporting		25.00		—		Gimhae
[Foreign]
South-East Asia Gas Pipeline Company Ltd.	Pipeline construction and management		25.04		25.04		Myanmar
AES-VCM Mong Duong Power Company Limited	Electricity generation		30.00		30.00		Vietnam
7623704 Canada Inc. (*1)	Investments management		10.40		10.40		Canada
Eureka Moly LLC	Raw material manufacturing and sales		20.00		20.00		USA
AMCI (WA) PTY LTD	Iron ore sales & mine development		49.00		49.00		Australia
Nickel Mining Company SAS	Raw material manufacturing and sales		49.00		49.00		New Caledonia
NCR LLC	Coal sales		29.41		29.41		Canada
KOREA LNG LTD.	Gas production and sales		20.00		20.00		England
PT. Batutua Tembaga Raya	Raw material manufacturing and sales		24.10		22.00		Indonesia
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd	Tinplate manufacturing and sales		34.00		34.00		China
PT. Wampu Electric Power	Construction and civil engineering		20.00		20.00		Indonesia
POSCO SeAH Steel Wire(Nantong) Co., Ltd.	Steel processing and sales		25.00		25.00		China
VSC POSCO Steel Corporation	Steel processing and sales		50.00		50.00		Vietnam
IMFA ALLOYS FINLEASE LTD	Raw material manufacturing and sales		24.00		24.00		India
General Medicines Company Ltd.	Medicine manufacturing and sales		33.00		33.00		Sudan
PT.INDONESIA POS CHEMTECH CHOSUN Ref	Refractory manufacturing and sales		30.19		30.19		Indonesia
POSK(Pinghu) Steel Processing Center Co., Ltd.	Steel processing and sales		20.00		20.00		China
SHANGHAI LANSHENG DAEWOO CORP.	Trading		49.00		49.00		China
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd	Steel processing and sales		25.00		25.00		China
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.	Trading		49.00		49.00		China
PT. Tanggamus Electric Power (*1)	Construction and civil engineering		17.50		17.50		Indonesia
NS-Thainox Auto Co., Ltd.	Steel manufacturing and sales		49.00		49.00		Vietnam
Hamparan Mulya	Resource development		45.00		45.00		Indonesia
Sebang Steel	Scrap sales		49.00		49.00		Japan
GLOBAL KOMSCO Daewoo LLC	Cotton celluloid manufacturing and sales		35.00		35.00		Uzbekistan
POSCO-Poggenamp Electrical Steel Pvt. Ltd.	Steel manufacturing and sales		26.00		26.00		India
KIRIN VIETNAM CO., LTD (*1)	Panel manufacturing		19.00		19.00		Vietnam
POSCHROME (PROPRIETARY) LIMITED	Raw material manufacturing and sales		50.00		50.00		South Africa
CAML RESOURCES PTY LTD	Raw material manufacturing and sales		33.34		33.34		Australia
KG Power(M) SDN. BHD	Energy & resource development		20.00		20.00		Malaysia
LI3 ENERGY INC	Energy & resource development		26.06		26.06		Peru
LLP POSUK Titanium	Titanium manufacturing and sales		36.83		36.83	Kazakhstan
POS-SeAH Steel Wire (Thailand) Co., Ltd.	Steel manufacturing and sales		25.00		25.00	Thailand
Jupiter Mines Limited (*1)	Energy & resource development		17.08		17.06	Australia
KRAKATAU POS-CHEM DONG-SUH CHEMICAL (*1)	Chemical by-product manufacturing and sales		19.00		19.00	Indonesia
SAMHWAN VINA CO., LTD (*1,4)	Steel manufacturing and sales		—		19.00	Vietnam
JB CLARK HILLS (*4)	Construction		—		25.00	Philippines
Saudi-Korean Company for Maintenance Properties Management LLC (*1,4)	Building management		—		19.00	Saudi Arabia
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. (*5)	Highway construction and new town development		50.00		—	Vietnam
Fifth Combined Heat and Power Plant LLC (*5)	Thermal power generation		30.00		—	Mongolia
Chongqing CISL High Strength Cold Rolling Steel Co., Ltd. (*6)	Steel manufacturing and sales		10.00		—	China

(*1) Considering the composition of board of directors, the Company is able to exercise significant influence even though the Company’s percentage of ownership is below 20%.

(*2) On September 30, 2015, in order to improve its financial standing and normalize operation, the associates reached a workout agreement with its Creditor Financial Institutions Committee. As a result, the Company lost its control and classified its shares as investment in associate.

(*3) Considering the composition of board of directors, the Company does not have control and classified its shares as investment in an associate, even though the Company’s percentage of ownership is over 50%.

(*4) These associates were newly established or acquired in 2017.

(*5) Excluded from associates due to the disposal of shares during the year ended December 31, 2017.

(*6) Excluded from associates due to loss of significant influence during the year ended December 31, 2017.

Details of Joint Ventures

Details of joint ventures as of December 31, 2016 and 2017 are as follows:

		Ownership (%)
Investee	Category of business	2016		2017		Region
[Domestic]
POSCO MITSUBISHI CARBON TECHNOLOGY	Steel processing and sales		60.00		60.00		Gwangyang
POSCO-SGI Falcon Pharmaceutic Bio Secondary Fund 1 (*1)	Investment in new technologies		—		24.55		Seoul
POSCO-KB Shipbuilding Restructuring Fund (*1)	Investment in new technologies		—		18.75		Seoul
POSCO-NSC Venture Fund (*1)	Investment in new technologies		—		16.67		Seoul
PCC L&K New Technology 1st Fund (*1)	Investment in new technologies		—		10.00		Seoul
PoscoPlutus Project 3rd Investment Fund (*1)	Investment in new technologies		—		5.96		Seoul
[Foreign]
Roy Hill Holdings Pty Ltd	Energy & resource development		12.50		12.50		Australia
POSCO-NPS Niobium LLC	Mine development		50.00		50.00		USA
CSP — Compania Siderurgica do Pecem	Steel manufacturing and sales		20.00		20.00		Brazil
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.	Steel processing and sales		25.00		25.00		China
KOBRASCO	Steel materials manufacturing and sales		50.00		50.00		Brazil
DMSA/AMSA	Energy & resource development		4.00		4.00		Madagascar
PT. POSMI Steel Indonesia	Steel processing and sales		36.69		36.69		Indonesia
VNS-DAEWOO Co., Ltd.	Steel scrap processing and sale		40.00		40.00		Vietnam
YULCHON MEXICO S.A. DE C.V.	Tube for automobile manufacturing		19.00		19.00		Mexico
POSCO-SAMSUNG-Slovakia Processing Center	Steel processing and sales		30.00		30.00		Slovakia
United Spiral Pipe, LLC	Material manufacturing and sales		35.00		35.00		USA
Korea Siberia Wood CJSC	Forest resource development		50.00		50.00		Russia
Hyunson Engineering & Construction HYENCO	Construction		4.90		4.90		Algeria
USS-POSCO Industries	Cold-rolled steel manufacturing and sales		50.00		50.00		USA
POSCO E&C Saudi Arabia	Civil engineering and construction		40.00		40.00		Saudi Arabia
Pos-Austem Suzhou Automotive Co., Ltd (*1)	Automotive parts manufacturing		—		19.90		China
POS-AUSTEM YANTAI AUTOMOTIVE CO., LTD (*1)	Automotive parts manufacturing		—		11.06		China
POS-AUSTEM WUHAN AUTOMOTIVE CO., LTD (*1)	Automotive parts manufacturing		—		13.00		China
POS-InfraAuto (Suzhou) Co., Ltd (*1)	Automotive parts manufacturing		—		16.20		China
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation) (*2)	Energy & resource development		—		35.00		Canada
Henan Tsingpu Ferro Alloy Co., Ltd. (*3)	Raw material manufacturing and sales		49.00		—		China
Zhangjiagang Pohang Refractories Co., Ltd. (*4)	Refractory manufacturing		50.00		—		China

(*1) These joint ventures were newly established in 2017.

(*2) Reclassified to joint venture from subsidiary during the year ended December 31, 2017.

(*3) Excluded from joint ventures due to the disposal of shares during the year ended December 31, 2017.

(*4) Reclassified to subsidiary from joint venture during the year ended December 31, 2017.

Consolidated Subsidiaries Acquired or Newly Established

Consolidated subsidiaries acquired or newly established during the year ended December 31, 2017 are as follows:

Company	Date of addition	Ownership (%)		Reason
POSCO RU Limited Liability Company	January 2017		100.00	New establishment
Golden Lace DAEWOO Company Limited	April 2017		100.00	New establishment
POSCO Research & Technology	June 2017		100.00	New establishment
POSCO DAEWOO UKRAINE LLC	July 2017		100.00	New establishment
Zhangjiagang Pohang Refractories Co., Ltd.	July 2017		51.00	Reclassification from associate
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2	October 2017		97.47	Acquisition of control
Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust	October 2017		99.01	Acquisition of control
Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5	November 2017		99.67	Acquisition of control
KIS Devonian Canada Corporation	December 2017		100.00	Acquisition of control

Subsidiaries That Were Excluded From Consolidation

 Excluded subsidiaries

Subsidiaries that were excluded from consolidation during the year ended December 31, 2017 are as follows:

Company	Date of exclusion	Reason
POSCO MAPC SA DE CV	January 2017	Merged into POSCO MPPC S.A. de C.V.
POSCO (Zhangjiagang) STS Processing Center Co., Ltd	January 2017	Merged into Zhangjiagang Pohang Stainless Steel Co., Ltd.
POSCO Engineering CO., Ltd	February 2017	Merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD.
POSCO YongXin Rare Earth Metal Co., Ltd.	March 2017	Disposal
SANTOS CMI S.A.	March 2017	Disposal
EPC EQUITIES LLP	March 2017	Disposal
SANTOS CMI Guatemala S.A.	March 2017	Disposal
COINSA INGENIERIA Y PETROQUIMICA S.R.L	March 2017	Disposal
SANTOS CMI CONSTRUCTION TRADING LLP	March 2017	Disposal
SANTOS CMI INC. USA	March 2017	Disposal
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA	March 2017	Disposal
SANTOS CMI PERU S.A.	March 2017	Disposal
SANTOS CMI CONSTRUCCIONES S.A.	March 2017	Disposal
GENTECH INTERNATIONAL INC.	March 2017	Disposal
SANTOS CMI CONSTRUCCIONES DE CHILE S.A.	March 2017	Disposal
COMPANIADEAUTOMATIZACION & CONTROL, GENESYS S.A.	March 2017	Disposal
POSCO Electrical Steel India Private Limited	March 2017	Merged into POSCO Maharashtra Steel Private Limited
POSEC Hawaii, Inc.	May 2017	Exclusion upon liquidation
PT. POSCO MTECH INDONESIA	May 2017	Disposal
POSCO VIETNAM HOLDINGS CO., LTD	July 2017	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
POSCO-Vietnam Processing Center Co., Ltd.	July 2017	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
Yingkou Puxiang Trade Co.,Ltd.	July 2017	Merged into Zhangjiagang Pohang Refractories Co., Ltd
Chongqing POSCO CISL Automotive Steel Co., Ltd.	September 2017	Loss of control
IT Engineering Co., Ltd.	November 2017	Disposal
POSCO India Delhi Steel Processing Center Private Limited	November 2017	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd.	November 2017	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
Kwanika Copper Corporation (formerly, Daewoo Minerals Canada Corporation)	November 2017	Change in status due to a decline in stake
USA-SRDC	December 2017	Exclusion upon liquidation

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Estimated Useful Lives of Property, Plant and Equipment

The estimated useful lives for the current and comparative periods are as follows:

Buildings	3-50 years
Structures	4-50 years
Machinery and equipment	4-25 years
Vehicles	3-20 years
Tools	3-10 years
Furniture and fixtures	3-20 years
Lease assets	3-30 years
Bearer plants	20 years

Estimated Useful Lives of Intangible Assets

Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which club memberships are expected to be available for use, this intangible asset is determined as having an indefinite useful life and not amortized.

Intellectual property rights	4-25 years
Development costs	3-5 years
Port facilities usage rights	4-75 years
Other intangible assets	2-15 years

Summary of New Standards and Interpretations Not Yet Adopted

The Company will apply IFRS No. 9 “Financial Instruments” and IFRS No. 15 “Revenue from Contracts with Customers” for the year beginning on January 1, 2018. The Company has completed an analysis of the financial impacts resulting from adoption of new standards and the estimated effect on equity in the consolidated financial statements at the date of initial application based on available information which are summarized as follows.

	December 31, 2017			IFRS No. 9			IFRS No. 15			Date of initial application (January 1, 2018)
	(in millions of Won)
Reserves	￦	(682,556	)		(401,344	)		—			(1,083,900	)
Retained earnings		42,974,658			368,612			(71,066	)		43,272,204
Non-controlling interests		3,666,334			(19,545	)		(59,060	)		3,587,729
	￦	45,958,436			(52,277	)		(130,126	)		45,776,033

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Financial risk management (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Net Borrowing-to-Equity Ratio

Net borrowing-to-equity ratio as of December 31, 2016 and 2017 is as follows:

	2016			2017
	(in millions of Won)
Total borrowings	￦	22,704,998			21,063,657
Less: Cash and cash equivalents		2,447,619			2,612,530
Net borrowings		20,257,379			18,451,127
Total equity		45,765,269			47,326,725
Net borrowings-to-equity ratio		44.26	%		38.99	%

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Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2016 and 2017 are as follows:

	2016		2017 (*1)
	(in millions of Won)
Cash	￦	11,960		1,896
Demand deposits and checking accounts		1,312,426		1,259,813
Time deposits		254,888		360,985
Other cash equivalents		868,345		989,836
	￦	2,447,619		2,612,530

(*1) As of December 31, 2017, cash equivalents amounting to ￦36,302 million of POSCO ENGINEERING & CONSTRUCTION CO., LTD., a subsidiary of the Company, are restricted for use related to the joint account of joint operations and others.

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Financial Assets

Financial assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Financial assets at fair value through profit or loss
Financial assets held for trading	￦	—		1,970
Derivatives assets held for trading		147,582		65,051
Derivatives assets designated as hedging instruments		—		3,239
Available-for-sale financial assets		2,514,924		1,978,115
Held-to-maturity financial assets		2,470		5,211
Loans and receivables		19,277,709		21,268,107
	￦	21,942,685		23,321,693

Summary of Financial Liabilities

Financial liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Financial liabilities at fair value through profit or loss
Derivatives liabilities held for trading	￦	122,896		142,280
Derivatives liabilities designated as hedging instruments		—		13,230
Financial liabilities measured at amortized cost
Trade accounts and notes payable		4,117,798		3,477,678
Borrowings		22,704,998		21,063,657
Financial guarantee liabilities		108,161		88,407
Others		2,007,114		1,865,683
	￦	29,060,967		26,650,935

Finance Income and Costs by Category of Financial Instruments

Finance income and costs by category of financial instrument for the years ended December 31, 2015, 2016 and 2017 were as follows:

① December 31, 2015

	Finance income and costs																					Other comprehensive loss
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total
	(in millions of Won)
Derivatives assets	￦	—			129,949			—			357,715			—			—			487,664			—
Available-for-sale financial assets		1,956			—			—			138,782			(142,781	)		183,712			181,669			(187,854	)
Held-to-maturity financial assets		456			—			—			—			—			(688	)		(232	)		—
Loans and receivables		207,781			—			283,030			(15,406	)		—			(217	)		475,188			—
Derivatives liabilities		—			(46,748	)		—			(334,340	)		—			—			(381,088	)		—
Financial liabilities measured at amortized cost		(788,772	)		—			(665,583	)		—			—			(138,827	)		(1,593,182	)		—
	￦	(578,579	)		83,201			(382,553	)		146,751			(142,781	)		43,980			(829,981	)		(187,854	)

② December 31, 2016

	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total			Other comprehensive income
	(in millions of Won)
Derivatives assets	￦	—			57,411			—			310,625			—			—			368,036			—
Available-for-sale financial assets		431			—			—			127,524			(248,404	)		41,000			(79,449	)		310,608
Held-to-maturity financial assets		266			—			—			—			—			38			304			—
Loans and receivables		181,778			—			140,751			(17,854	)		—			(172	)		304,503			—
Derivatives liabilities		—			(72,976	)		—			(332,415	)		—			—			(405,391	)		—
Financial liabilities measured at amortized cost		(658,726	)		—			(283,059	)		(61	)		—			(28,367	)		(970,213	)		—
	￦	(476,251	)		(15,565)			(142,308	)		87,819			(248,404	)		12,499			(782,210	)		310,608

③ December 31, 2017

	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Impairment loss			Others			Total			Other comprehensive loss
	(in millions of Won)
Financial assets held for trading	￦	—			16			—			—			—			—			16			—
Derivatives assets		—			(99,942	)		—			206,362			—			—			106,420			(143	)
Available-for-sale financial assets		60			—			—			418,789			(123,214	)		92,961			388,596			(31,389	)
Held-to-maturity financial assets		236			—			—			—			—			7			243			—
Loans and receivables		212,155			—			(607,837	)		(32,456	)		—			(304	)		(428,442	)		—
Derivatives liabilities		—			(61,809	)		—			(231,908	)		—			—			(293,717	)		—
Financial liabilities measured at amortized cost		(653,115	)		—			777,935			—			—			(9,546	)		115,274			—
	￦	(440,664	)		(161,735	)		170,098			360,787			(123,214	)		83,118			(111,610	)		(31,532	)

Maximum Exposure to Credit Risk

The carrying amount of financial assets represents the Company’s maximum exposure to credit risk. The maximum exposure to credit risk as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Cash and cash equivalents	￦	2,447,619		2,612,530
Financial assets held for trading		—		1,970
Derivative assets		147,582		68,290
Available-for-sale financial assets		51,649		192,866
Held-to-maturity financial assets		2,470		5,211
Loans and other receivables		7,104,940		9,099,444
Trade accounts and notes receivable, net		9,674,026		8,824,563
Long-term trade accounts and notes receivable, net		51,124		731,570
	￦	19,479,410		21,536,444

Allowance for Doubtful Accounts

Allowance for doubtful accounts as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Trade accounts and notes receivable	￦	558,125		634,129
Other accounts receivable		203,346		187,706
Loans		210,346		258,957
Other assets		5,954		13,672
	￦	977,771		1,094,464

Impairment Losses on Financial Assets

Impairment losses on financial assets for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Bad debt expenses on trade accounts and notes receivable	￦	165,150			173,694
Other bad debt expenses (*1)		50,225			100,920
Impairment loss on available-for-sale financial assets		248,404			123,214
Less: Recovery of allowance for other bad debt accounts		(12,658	)		(2,743	)
Less: Recovery of impairment loss on held-to-maturity financial assets		(38	)		(20	)
	￦	451,083			395,065

(*1) Other bad debt expenses are mainly related to other receivables and loans.

Aging and Impairment Losses of Trade Accounts and Notes Receivable and Other Receivables

The aging and impairment losses of trade accounts and notes receivable as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Trade accounts and notes receivable		Impairment		Trade accounts and notes receivable		Impairment
	(in millions of Won)
Not due	￦	7,963,491		62,511		7,736,092		65,314
Over due less than 1 month		790,042		27,482		445,390		12,546
1 month – 3 months		205,394		8,955		170,682		742
3 months – 12 months		189,605		26,814		384,313		21,030
Over 12 months		1,134,743		432,363		1,453,785		534,497
	￦	10,283,275		558,125		10,190,262		634,129

④ The aging and impairment losses of other receivables as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Other receivables		Impairment		Other receivables		Impairment
	(in millions of Won)
Not due	￦	1,641,924		23,958		1,888,726		9,672
Over due less than 1 month		197,772		75,207		235,559		35,539
1 month – 3 months		27,525		1,189		69,372		54,335
3 months – 12 months		82,337		20,300		96,942		64,467
over 12 months		357,401		298,992		365,202		296,322
	￦	2,306,959		419,646		2,655,801		460,335

Changes in Allowance for Doubtful Accounts

Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	954,153			999,678			977,771
Bad debt expenses		189,616			165,150			173,694
Other bad debt expenses		147,619			37,567			98,177
Others (*1)		(291,710	)		(224,624	)		(155,178	)
Ending	￦	999,678			977,771			1,094,464

(*1) Others for the year ended December 31, 2015 included a decrease of ￦199,003 million due to exclusion of POSCO PLANTEC Co., Ltd. from consolidation. Others for years ended December 31, 2016 and 2017, included decreases mainly due to write-off amounting to ￦216,657 million and ￦119,964 million, respectively.

Contractual Maturities for Non-derivative Financial Liabilities

Contractual maturities for non-derivative financial liabilities, including estimated interest, are as follows:

	Book value		Contractual cash flow		Within 1 year		1 year - 5 years		After 5 years
	(in millions of Won)
Trade accounts and notes payable	￦	3,477,678		3,478,992		3,466,001		12,991		—
Borrowings		21,063,657		22,928,112		12,093,516		9,200,416		1,634,180
Financial guarantee liabilities (*1)		88,407		3,135,084		3,135,084		—		—
Other financial liabilities		1,865,683		1,874,667		1,721,004		153,663		—
	￦	26,495,425		31,416,855		20,415,605		9,367,070		1,634,180

(*1) For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

Maturity Analysis of Derivative Financial Liabilities

The maturity analysis of derivative financial liabilities is as follows:

	Within 1 year		1 year - 5 years		Total
	(in millions of Won)
Currency forward	￦	9,744		300		10,044
Currency futures		9,632		74,834		84,466
Currency swaps		25,553		10,504		36,057
Interest swaps		153		—		153
Other forwards		24,790		—		24,790
	￦	69,872		85,638		155,510

Carrying Amount and Fair Value of Financial Instruments

The carrying amount and the fair value of financial instruments as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Book value		Fair value		Book value		Fair value
	(in millions of Won)
Financial assets measured at fair value
Available-for-sale financial assets (*1)	￦	2,139,687		2,139,687		1,506,893		1,506,893
Financial assets held for trading		—		—		1,970		1,970
Derivatives assets		147,582		147,582		68,290		68,290
		2,287,269		2,287,269		1,577,153		1,577,153
Financial assets measured at amortized cost(*2)
Cash and cash equivalents		2,447,619		2,447,619		2,612,530		2,612,530
Trade accounts and notes receivable, net		9,725,150		9,725,150		9,556,133		9,556,133
Loans and other receivables, net		7,104,940		7,104,940		9,099,444		9,099,444
Held-to-maturity financial assets		2,470		2,470		5,211		5,211
		19,280,179		19,280,179		21,273,318		21,273,318
Financial liabilities measured at fair value
Derivatives liabilities		122,896		122,896		155,510		155,510
Financial liabilities measured at amortized cost(*2)
Trade accounts and notes payable		4,117,798		4,117,798		3,477,678		3,477,678
Borrowings		22,704,998		22,956,571		21,063,657		21,217,415
Financial guarantee liabilities		108,161		108,161		88,407		88,407
Others		2,007,114		2,007,114		1,865,683		1,865,683
	￦	28,938,071		29,189,644		26,495,425		26,649,183

(*1) Available-for-sale financial assets which are not measured at fair value are not included.

(*2) The fair value of financial assets and liabilities measured at amortized cost is measured using discounted cash flow method, and the fair value is mainly calculated for the disclosures in the note. On the other hand, the Company has not performed fair value measurement for the financial assets and liabilities measured at amortized cost except borrowings which are classified as fair value hierarchy level 2 since their carrying amounts approximate fair value.

Fair Values of Financial Assets and Financial Liabilities

The fair values of financial assets and financial liabilities by fair value hierarchy as of December 31, 2016 and 2017 are as follows:

① December 31, 2016

	Level 1		Level 2		Level 3		Total
	(in millions of Won)
Financial assets
Available-for-sale financial assets	￦	1,800,943		—		338,744		2,139,687
Derivatives assets		—		137,236		10,346		147,582
		1,800,943		137,236		349,090		2,287,269
Financial liabilities
Derivatives liabilities	￦	—		122,896		—		122,896

② December 31, 2017

	Level 1		Level 2		Level 3		Total
	(in millions of Won)
Financial assets
Available-for-sale financial assets	￦	1,137,662		17,812		351,419		1,506,893
Financial assets held for trading		—		1,970		—		1,970
Derivatives assets		—		68,290		—		68,290
		1,137,662		88,072		351,419		1,577,153
Financial liabilities
Derivatives liabilities	￦	—		155,510		—		155,510

Value Measurement Method and Significant but not Observable Inputs for the Financial Assets Classified as Fair Value Hierarchy Level 3

Value measurement method and significant but not observable inputs for the financial assets classified as fair value hierarchy level 3 as of December 31, 2017 are as follows:

	Fair value		Valuation technique	Inputs	Range of inputs	Effect on fair value assessment with unobservable input
	(in millions of Won)
Available-for-sale financial assets	￦	235,803	Discounted cash flows	Growth rate	0% ~ 2.0%	As growth rate increases, fair value increases
				Discount rate	0.5% ~ 11.9%	As discount rate increases, fair value decreases
		14,775	Market comparable companies	Price multiple	1.085 ~ 5.245	As price multiple increases, fair value increases
		100,841	Asset value approach	—	—	—

Sensitivity Analysis of Financial Assets and Financial Liabilities Classified as Level 3 of Fair Value Hierarchy

Sensitivity analysis of financial assets and financial liabilities classified as Level 3 of fair value hierarchy

If other inputs remain constant as of December 31, 2017 and one of the significant but not observable input is changed, the effect on fair value measurement is as follows:

	Input variable	Favorable changes		Unfavorable changes
	(in millions of Won)
Available-for-sale financial assets	Fluctuation 0.5% of growth rate	￦	5,713		4,641
	Fluctuation 0.5% of discount rate		27,238		22,724

Currency risk [member]

Market Risk Exposure

The Company has exposure to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in foreign exchange rates. The exposure to currency risk as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Assets		Liabilities		Assets		Liabilities
	(in millions of Won)
USD	￦	5,007,649		6,636,065		4,215,151		5,940,380
EUR		463,110		550,235		552,630		454,072
JPY		45,975		821,403		165,356		709,318
Others		219,444		286,112		220,723		117,632

Sensitivity Analysis for Market Risk

As of December 31, 2016 and 2017, provided that functional currency against foreign currencies other than functional currency hypothetically strengthens or weakens by 10%, the changes in gain or loss during the years ended December 31, 2016 and 2017 were as follows:

	2016					2017
	10% increase			10% decrease		10% increase			10% decrease
	(in millions of Won)
USD	￦	(162,842	)		162,842		(172,523	)		172,523
EUR		(8,713	)		8,713		9,856			(9,856	)
JPY		(77,543	)		77,543		(54,396	)		54,396

Interest rate risk [member]

Market Risk Exposure

The carrying amount of interest-bearing financial instruments as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Fixed rate
Financial assets	￦	8,650,483			10,943,300
Financial liabilities		(10,794,724	)		(11,179,635	)
		(2,144,241	)		(236,335	)
Variable rate
Financial liabilities	￦	(12,024,683)			(9,977,040	)

Sensitivity Analysis for Market Risk

As of December 31, 2016 and 2017, provided that other factors remain the same and the interest rate of borrowings with floating rates increases or decreases by 1%, the changes in interest expense for the years ended December 31, 2016 and 2017 were as follows:

	2016				2017
	1% increase		1% decrease		1% increase			1% decrease
	(in millions of Won)
Variable rate financial instruments	￦	(120,247)		120,247		(99,770	)		99,770

Level 3 [member]

Fair Values of Financial Assets and Financial Liabilities

Changes in fair value of financial assets and financial liabilities classified as Level 3 for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Beginning	￦	466,407			349,090
Acquisition and others		47,493			129,766
Gain (loss) on valuations of derivatives		(59,829	)		(10,346	)
Other comprehensive income (loss)		(38,731	)		35,126
Impairment		(19,111	)		(107,934	)
Disposal and others		(47,139	)		(44,283	)
Ending	￦	349,090			351,419

Other receivables [member]

Summary of Financial Assets

Other receivables as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Current
Loans	￦	421,818			617,696
Other accounts receivable		1,131,492			960,543
Accrued income		139,618			179,971
Deposits		93,891			107,137
Others		13,606			18,925
Less: Allowance for doubtful accounts		(260,683	)		(248,266	)
	￦	1,539,742			1,636,006
Non-current
Loans	￦	733,974			874,158
Other accounts receivable		81,938			92,939
Accrued income		1,746			1,663
Deposits		104,217			122,485
Less: Allowance for doubtful accounts		(158,963	)		(212,069	)
	￦	762,912			879,176

Others [member]

Summary of Financial Assets

Other financial assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Derivatives assets held for trading	￦	49,281		63,912
Financial assets held for trading		—		1,970
Available-for-sale securities (bonds)		2,952		136,141
Current portion of held-to-maturity securities		422		421
Short-term financial instruments (*1,2)		5,172,256		6,843,436
	￦	5,224,911		7,045,880
Non-current
Derivatives assets held for trading	￦	98,301		4,378
Available-for-sale securities (equity instruments) (*3,4)		2,392,534		1,730,753
Available-for-sale securities (bonds)		46,330		54,439
Available-for-sale securities (others)		73,108		56,782
Held-to-maturity securities		2,048		4,790
Long-term financial instruments (*2)		45,371		60,542
	￦	2,657,692		1,911,684

(*1) As of December 31, 2016 and 2017, ￦6,813 million and ￦10,080 million, respectively, are restricted for use in a government project.

(*2) As of December 31, 2016 and 2017, financial instruments amounting to ￦82,008 million and ￦78,477 million, respectively, are restricted for use in financial arrangements, pledge and others.

(*3) During the year ended December 31, 2017, there were objective evidences of impairment for listed equity securities such as FINE BESTEEL CO., LTD and others and for non-listed equity securities such as Congonhas Minerios S.A. and others due to the significant or prolonged decline in the fair value below cost of the shares. As a result, an impairment losses of ￦123,214 million was recognized in profit or loss for the year ended December 31, 2017.

(*4) As of December 31, 2016 and 2017, ￦123,220 million and ￦136,099 million of available-for-sale securities, respectively, have been provided as collateral for borrowings, construction projects and others.

Trade accounts and notes receivables, net [member]

Summary of Financial Assets

Trade accounts and notes receivable as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Current
Trade accounts and notes receivable	￦	9,320,915			8,579,620
Finance lease receivables		10,300			10,469
Unbilled due from customers for contract work		860,287			728,007
Less: Allowance for doubtful accounts		(517,476	)		(493,533	)
	￦	9,674,026			8,824,563
Non-current
Trade accounts and notes receivable	￦	80,447			871,432
Finance lease receivables		11,326			734
Less: Allowance for doubtful accounts		(40,649	)		(140,596	)
	￦	51,124			731,570

Finance lease receivables [Member]

Summary of Financial Assets

Finance lease receivables are as follows:

Customer	Contents	2016		2017
	(in millions of Won)
Korea Electric Power Corporation	Combined thermal power plant 3~4	￦	20,648		10,469
KC Chemicals CORP	Machinery and equipment		244		—
Hystech.Co. Ltd.	Machinery and equipment		734		734
		￦	21,626		11,203

Other payables [member]

Summary of Financial Liabilities

Other payables as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Accounts payable	￦	854,623		800,374
Accrued expenses		665,295		653,923
Dividend payable		7,770		7,213
Finance lease liabilities		24,523		17,763
Withholdings		299,448		274,188
	￦	1,851,659		1,753,461
Non-current
Accounts payable	￦	6,823		4,632
Accrued expenses		41,082		14,234
Finance lease liabilities		89,886		75,255
Long-term withholdings		70,768		53,629
	￦	208,559		147,750

Others [member]

Summary of Financial Liabilities

Other financial liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Derivatives liabilities	￦	85,786		69,872
Financial guarantee liabilities		63,962		59,940
	￦	149,748		129,812
Non-current
Derivatives liabilities	￦	37,110		85,638
Financial guarantee liabilities		44,199		28,467
	￦	81,309		114,105

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Trade Accounts and Notes Receivable (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Gross Amount and Present Value of Minimum Lease Payments

The gross amount and present value of minimum lease payments as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Less than 1 year	￦	13,114			11,771
1 year – 5 years		12,547			828
Unrealized interest income		(4,035	)		(1,396	)
Present value of minimum lease payment	￦	21,626			11,203

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Inventories (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Inventories

Inventories as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Finished goods	￦	1,200,344			1,526,628
Merchandise		851,325			930,558
Semi-finished goods		1,552,988			1,721,130
Raw materials		1,939,539			2,329,268
Fuel and materials		817,397			808,016
Construction inventories		1,455,115			1,692,092
Materials-in-transit		1,807,816			1,818,576
Others		94,535			103,144
		9,719,059			10,929,412
Less: Allowance for inventories valuation		(203,164	)		(135,631	)
	￦	9,515,895			10,793,781

Changes of Allowance for Inventories Valuation

The changes of allowance for inventories valuation for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	161,940			231,378			203,164
Loss on valuation of inventories		152,952			152,249			78,560
Realization on disposal of inventories		(77,102	)		(161,458	)		(138,967	)
Others		(6,412	)		(19,005	)		(7,126	)
Ending	￦	231,378			203,164			135,631

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Assets Held for Sale (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Details of Assets Held For Sale and Related Liabilities

Details of assets held for sale as of December 31, 2016 and 2017 are as follows:

	2016						2017
	Controlling company		Subsidiaries (*1)		Total		Controlling company		Subsidiaries (*2)		Total
	(in millions of Won)
Assets
Property, plant and equipment		764		305,864		306,628		392		71,340		71,732
Others		—		5,330		5,330		—		36		36
	￦	764		311,194		311,958		392		71,376		71,768

(*1) During the year ended December 2016, Posco e&c Songdo International Building, a subsidiary of the Company, entered into a sales contract regarding disposal of the office building of POSCO ENGINEERING & CONSTRUCTION CO., LTD. in Songdo and classified the accompanying property, plant and equipment as assets held for sale. During the year ended December 2017, disposal of the accompanying assets held for sale was completed.

(*2) During the year ended December 2017, POSCO ENGINEERING & CONSTRUCTION CO., LTD., a subsidiary of the Company, determined to dispose of the office building, Seomyeon Fiesta, in Busan and classified the related property, plant and equipment amounting to ￦71,340 million as assets held for sale.

XML

Investments in Associates and Joint ventures (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Investments in Associates and Joint Ventures

Investments in associates and joint ventures as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Investments in associates	￦	1,595,441		1,520,441
Investments in joint ventures		2,286,948		2,037,491
	￦	3,882,389		3,557,932

Details of Investments in Associates

Details of investments in associates as of December 31, 2016 and 2017 are as follows:

	Number of shares		Ownership (%)		Acquisition cost		Book value
Company							2016		2017
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF		178,713,975,892		31.14	￦	178,787	￦	175,690		175,553
SNNC		18,130,000		49.00		90,650		107,859		110,424
QSONE Co.,Ltd.		200,000		50.00		84,395		84,799		85,049
Chun-cheon Energy Co., Ltd. (*1)		16,098,143		45.67		80,491		45,077		74,378
Incheon-Gimpo Expressway Co., Ltd. (*1)		9,032,539		18.26		45,163		37,372		31,660
BLUE OCEAN Private Equity Fund		333		27.52		33,300		35,752		19,620
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		2,008,000		29.53		10,040		12,551		17,252
UITrans LRT Co., Ltd. (*1)		7,714,380		38.19		38,572		17,851		15,841
Daesung Steel		108,038		17.54		14,000		12,302		15,500
Keystone NO. 1. Private Equity Fund		13,800,000		40.45		13,800		13,314		12,379
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		6,485		12.50		6,485		11,890		6,828
KONES, Corp.		3,250,000		41.67		6,893		5,641		2,827
Others (35 companies) (*1)								55,061		67,325
								615,159		634,636
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		135,219,000		25.04		150,779		215,996		197,069
AES-VCM Mong Duong Power Company Limited (*2)		—		30.00		164,303		167,141		142,348
7623704 Canada Inc.		114,452,000		10.40		124,341		137,512		121,702
Eureka Moly LLC		—		20.00		240,123		89,601		79,398
AMCI (WA) PTY LTD		49		49.00		209,664		70,501		63,378
Nickel Mining Company SAS		3,234,698		49.00		157,585		45,138		45,905
NCR LLC		—		29.41		37,634		36,738		33,738
KOREA LNG LTD.		2,400		20.00		135,205		63,058		33,422
PT. Batutua Tembaga Raya		128,285		22.00		21,824		22,723		21,823
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		10,200,000		34.00		9,517		18,008		15,617
PT. Wampu Electric Power (*1)		8,708,400		20.00		10,054		8,706		13,391
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		50		25.00		4,723		6,840		6,517
Others (26 companies) (*1)								98,320		111,497
								980,282		885,805
							￦	1,595,441		1,520,441

(*1) As of December 31, 2016 and 2017, investments in associates amounting to ￦124,963 million and ￦158,370 million, respectively, are provided as collateral in relation to the associates’ borrowings.

(*2) As of December 31, 2016 and 2017, shares of PSC Energy Global Co., Ltd., a subsidiary of the Company, are provided as collateral in relation to the associates’ borrowings.

Details of Investments in Joint Ventures

Details of investments in joint ventures as of December 31, 2016 and 2017 are as follows:

	Number of shares		Ownership (%)		Acquisition cost		Book value
Company							2016		2017
	(in millions of Won)
[Domestic]
POSCO MITSUBISHI CARBON TECHNOLOGY		11,568,000		60.00	￦	115,680	￦	83,113		110,760
Others (5 companies)								—		6,094
								83,113		116,854
[Foreign]
Roy Hill Holdings Pty Ltd (*1)		13,117,972		12.50		1,528,672		1,186,859		1,125,133
POSCO-NPS Niobium LLC		325,050,000		50.00		364,609		393,570		348,836
CSP — Compania Siderurgica do Pecem		1,108,696,532		20.00		558,821		330,463		146,427
KOBRASCO		2,010,719,185		50.00		32,950		88,308		108,485
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		25.00		61,961		97,369		88,305
DMSA/AMSA (*1)		—		4.00		304,623		74,935		56,735
Others (14 companies)								32,331		46,716
								2,203,835		1,920,637
							￦	2,286,948		2,037,491

(*1) As of December 31, 2016 and 2017, the investments in joint ventures are provided as collateral in relation to the joint ventures’ borrowings.

Movements of Investments in Associates and Joint Ventures

The movements of investments in associates and joint ventures for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

Company	December 31, 2015 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease) (*1)			December 31, 2016 Book value
						(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	175,676		222		—			(399	)		191			175,690
SNNC		111,326		—		—			(3,417	)		(50	)		107,859
QSONE Co.,Ltd.		83,919		—		—			880			—			84,799
Chun-cheon Energy Co., Ltd		30,420		19,832		—			(5,175	)		—			45,077
Incheon-Gimpo Expressway Co., Ltd.		39,447		—		—			(2,758	)		683			37,372
BLUE OCEAN Private Equity Fund		35,437		—		—			643			(328	)		35,752
CHUNGJU ENTERPRISE CITY  DEVELOPMENT Co.,Ltd		12,265		—		—			286			—			12,551
UITrans LRT Co., Ltd.		40,903		6,817		—			(29,825	)		(44	)		17,851
Daesung Steel		14,000		—		—			(2,272	)		574			12,302
Keystone NO. 1. Private Equity Fund		13,015		—		—			281			18			13,314
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		14,829		1,875		—			1,186			(6,000	)		11,890
KONES, Corp.		5,775		—		—			(256	)		122			5,641
POSCO MITSUBISHI CARBON TECHNOLOGY		104,970		—		—			(21,929	)		72			83,113
POSCO PLANTEC Co., Ltd.		171,218		—		—			(171,927	)		709			—
SeAH Changwon Integrated Special Steel		165,754		—		—			4,797			(170,551	)		—
POSCO ES MATERIALS CO.,LTD		38,447		—		—			(2,061	)		(36,386	)		—
Others (33 companies)		33,933		20,061		(200	)		(2,802	)		4,069			55,061
		1,091,334		48,807		(200	)		(234,748	)		(206,921	)		698,272
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		222,269		—		(59,717	)		46,855			6,589			215,996
AES-VCM Mong Duong Power Company Limited		153,271		—		—			27,031			(13,161	)		167,141
7623704 Canada Inc.		134,034		—		(921	)		175			4,224			137,512
Eureka Moly LLC		87,878		—		—			(18	)		1,741			89,601
AMCI (WA) PTY LTD		72,289		—		—			(3,358	)		1,570			70,501
Nickel Mining Company SAS		76,445		—		—			(31,047	)		(260	)		45,138
NCR LLC		35,447		—		—			(41	)		1,332			36,738
KOREA LNG LTD.		53,548		—		(6,342	)		6,392			9,460			63,058
PT. Batutua Tembaga Raya		15,382		7,040		—			—			301			22,723
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		19,311		—		—			(412	)		(891	)		18,008
PT. Wampu Electric Power		8,855		—		—			(397	)		248			8,706
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		7,061		—		—			242			(463	)		6,840
Roy Hill Holdings Pty Ltd		1,153,434		—		—			12,643			20,782			1,186,859
POSCO-NPS Niobium LLC		381,461		—		(10,893	)		11,499			11,503			393,570
CSP - Compania Siderurgica do Pecem		80,805		88,930		—			116,694			44,034			330,463
KOBRASCO		78,364		—		(29,297	)		20,761			18,480			88,308
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		100,908		—		—			258			(3,797	)		97,369
DMSA/AMSA		105,964		24,624		—			(60,415	)		4,762			74,935
Others (37 companies)		67,273		28,993		(4,252	)		(791	)		39,428			130,651
		2,853,999		149,587		(111,422	)		146,071			145,882			3,184,117
	￦	3,945,333		198,394		(111,622	)		(88,677	)		(61,039	)		3,882,389

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals, change in capital adjustments effect from translations of financial statements of foreign investees and others.

2) For the year ended December 31, 2017

Company	December 31, 2016 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease) (*1)			December 31, 2017 Book value
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	175,690		—		—			418			(555	)		175,553
SNNC		107,859		—		—			2,370			195			110,424
QSONE Co.,Ltd.		84,799		—		(368	)		618			—			85,049
Chun-cheon Energy Co., Ltd		45,077		27,791		—			1,510			—			74,378
Incheon-Gimpo Expressway Co., Ltd.		37,372		—		—			(6,463	)		751			31,660
BLUE OCEAN Private Equity Fund		35,752		—		—			(8,154	)		(7,978	)		19,620
CHUNGJU ENTERPRISE CITY
DEVELOPMENT Co.,Ltd		12,551		—		—			4,701			—			17,252
UITrans LRT Co., Ltd.		17,851		—		—			(2,010	)		—			15,841
Daesung Steel		12,302		—		—			3,198			—			15,500
Keystone NO. 1. Private Equity Fund		13,314		—		—			(886	)		(49	)		12,379
KoFC POSCO HANWHA KB Shared Growth
NO. 2. Private Equity Fund		11,890		—		—			(197	)		(4,865	)		6,828
KONES, Corp.		5,641		—		—			(2,774	)		(40	)		2,827
POSCO MITSUBISHI CARBON TECHNOLOGY		83,113		—		—			27,582			65			110,760
Others (40 companies)		55,061		28,348		(137	)		(7,995	)		(1,858	)		73,419
		698,272		56,139		(505	)		11,918			(14,334	)		751,490
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		215,996		—		(37,016	)		42,896			(24,807	)		197,069
AES-VCM Mong Duong Power Company Limited		167,141		—		(30,798	)		19,644			(13,639	)		142,348
7623704 Canada Inc.		137,512		—		(7,563	)		7,468			(15,715	)		121,702
Eureka Moly LLC		89,601		—		—			(35	)		(10,168	)		79,398
AMCI (WA) PTY LTD.		70,501		—		—			(4,299	)		(2,824	)		63,378
Nickel Mining Company SAS		45,138		—		—			424			343			45,905
NCR LLC		36,738		276		—			(60	)		(3,216	)		33,738
KOREA LNG LTD.		63,058		—		(6,466	)		(70,180	)		47,010			33,422
PT. Batutua Tembaga Raya		22,723		—		—			260			(1,160	)		21,823
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		18,008		—		—			(1,268	)		(1,123	)		15,617
PT. Wampu Electric Power		8,706		—		—			5,927			(1,242	)		13,391
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		6,840		—		—			303			(626	)		6,517
Roy Hill Holdings Pty Ltd.		1,186,859		—		—			46,020			(107,746	)		1,125,133
POSCO-NPS Niobium LLC		393,570		—		(17,277	)		17,173			(44,630	)		348,836
CSP-Compania Siderurgica do Pecem		330,463		—		—			(147,847	)		(36,189	)		146,427
KOBRASCO		88,308		—		(22,135	)		56,445			(14,133	)		108,485
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		97,369		—		(5,542	)		1,555			(5,077	)		88,305
DMSA/AMSA		74,935		13,712		—			(22,339	)		(9,573	)		56,735
Others (40 companies)		130,651		22,209		(4,408	)		46,535			(36,774	)		158,213
		3,184,117		36,197		(131,205	)		(1,378	)		(281,289	)		2,806,442
	￦	3,882,389		92,336		(131,710	)		10,540			(295,623	)		3,557,932

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals, change in capital adjustments effect from translations of financial statements of foreign investees and others.

Summarized Financial Information of Associates and Joint Ventures

Summarized financial information of associates and joint ventures as of and for the years ended December 31, 2016 and 2017 are as follows:

1) December 31, 2016

Company	Assets		Liabilities		Equity (deficit)			Sales		Net income (loss)
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	597,767		864		596,903			—		(1,349	)
SNNC		725,987		482,429		243,558			527,101		2,022
QSONE Co.,Ltd.		247,385		77,786		169,599			15,961		1,760
Chun-cheon Energy Co., Ltd		547,805		378,613		169,192			—		(3,748	)
Incheon-Gimpo Expressway Co., Ltd.		929,539		718,107		211,432			—		(1,910	)
BLUE OCEAN Private Equity Fund		357,723		220,895		136,828			456,311		2,335
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		136,857		124,666		12,191			19,028		967
UITrans LRT Co., Ltd.		400,761		307,625		93,136			—		(822	)
Daesung Steel		150,944		112,194		38,750			60,772		(12,955	)
Keystone NO. 1. Private Equity Fund		119,378		79,946		39,432			197		694
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		96,213		1,094		95,119			14,157		9,561
KONES, Corp.		2,627		1,519		1,108			3,952		(615	)
POSCO MITSUBISHI CARBON TECHNOLOGY		448,618		311,070		137,548			53,908		(36,572	)
POSCO PLANTEC Co., Ltd.		501,659		678,004		(176,345	)		361,351		(43,195	)
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		2,171,689		1,305,942		865,747			491,011		187,114
7623704 Canada Inc.		1,334,391		1		1,334,390			—		19,485
Nickel Mining Company SAS		491,458		347,194		144,264			145,571		(61,473	)
KOREA LNG LTD.		303,389		19,704		283,685			33,035		31,962
PT. Batutua Tembaga Raya		351,119		332,037		19,082			—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		83,291		24,676		58,615			117,387		(1,216	)
PT. Wampu Electric Power		206,052		165,618		40,434			3,405		(1,984	)
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		67,905		40,451		27,454			81,260		938
Roy Hill Holdings Pty Ltd		10,962,261		8,059,714		2,902,547			845,243		129,968
POSCO-NPS Niobium LLC		786,937		—		786,937			—		24,719
CSP - Compania Siderurgica do Pecem		5,682,161		4,237,247		1,444,914			226,669		243,151
KOBRASCO		178,853		2,236		176,617			72,274		41,522
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		789,336		427,475		361,861			948,488		1,033
DMSA/AMSA		6,570,172		4,842,560		1,727,612			579,388		(519,969	)

2) December 31, 2017

Company	Assets		Liabilities		Equity		Sales		Net income (loss)
	(in millions of Won)
[Domestic]
EQP POSCO Global NO1 Natural Resources PEF	￦	562,698		866		561,832		—		1,261
SNNC		705,975		459,519		246,456		576,023		2,417
QSONE Co.,Ltd.		248,779		78,680		170,099		15,297		1,236
Chun-cheon Energy Co., Ltd		700,079		539,137		160,942		164,294		(8,250	)
Incheon-Gimpo Expressway Co., Ltd.		1,132,233		922,338		209,895		—		(23,221	)
BLUE OCEAN Private Equity Fund		311,129		188,512		122,617		445,238		(3,345	)
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		76,184		48,072		28,112		77,093		15,921
UITrans LRT Co., Ltd.		464,074		384,202		79,872		3,689		(13,263	)
Daesung Steel		169,774		112,795		56,979		70,434		18,230
Keystone NO. 1. Private Equity Fund		170,155		133,033		37,122		5,391		(2,070	)
KoFC POSCO HANWHA KB Shared Growth NO. 2. Private Equity Fund		55,936		1,315		54,621		10,212		(1,578	)
KONES, Corp.		2,766		1,616		1,150		5,379		139
POSCO MITSUBISHI CARBON TECHNOLOGY		478,847		295,052		183,795		154,312		46,138
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		1,911,942		1,121,783		790,159		445,682		171,303
7623704 Canada Inc.		1,182,376		9		1,182,367		—		82,344
Nickel Mining Company SAS		465,700		324,687		141,013		179,683		(4,450	)
KOREA LNG LTD.		179,269		86		179,183		34,640		32,446
PT. Batutua Tembaga Raya		336,085		272,542		63,543		195,520		49,091
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		70,437		18,722		51,715		85,850		(3,736	)
PT. Wampu Electric Power		212,095		148,177		63,918		779		29,634
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		70,701		43,588		27,113		84,973		1,210
Roy Hill Holdings Pty Ltd		10,148,416		6,600,900		3,547,516		2,988,372		797,008
POSCO-NPS Niobium LLC		697,470		—		697,470		—		32,481
CSP - Compania Siderurgica do Pecem		4,805,353		4,223,392		581,961		1,290,767		(740,591	)
KOBRASCO		252,813		35,843		216,970		179,453		112,890
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		717,472		391,871		325,601		1,245,178		5,978
DMSA/AMSA		5,586,171		4,167,906		1,418,265		630,229		(475,958	)

XML

Joint Operations (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Details of Significant Joint Operations

Details of significant joint operations that the Company is participating in as a party to a joint arrangement as of December 31, 2017 are as follows:

Joint operations	Operation	Ownership (%)	Location
Myanmar A-1/A-3 mine	Mineral development and gas production	51.00	Myanmar
Offshore midstream	Gas transportation facility	51.00	Myanmar
Greenhills mine	Mine development	20.00	Canada
Arctos Anthracite coal project	Mine development	50.00	Canada
Mt. Thorley J/V	Mine development	20.00	Australia
POSMAC J/V	Mine development	20.00	Australia
RUM J/V	Mine development	10.00	Australia
Hanam-Gamil package public housing project	Construction	7.70	Korea
Sejong 2-1 P3 Block public housing project	Construction	37.00	Korea
Yongin-Giheung Station area city development project	Construction	61.00	Korea
Korean wave world complex land multi-purpose building development project	Construction	33.30	Korea
Sejong 4-1 P3 Block public housing project	Construction	60.00	Korea

XML

Investment Property, Net (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Investment Property

Investment property as of December 31, 2016 and 2017 are as follows:

	2016							2017
	Acquisition cost		Accumulated depreciation and impairment loss			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Book value
	(in millions of Won)
Land	￦	423,910		(31,187	)		392,723		360,402		—			360,402
Buildings		807,657		(136,118	)		671,539		727,022		(92,982	)		634,040
Structures		3,148		(1,001	)		2,147		7,717		(1,436	)		6,281
Construction-in-progress		51,311		—			51,311		64,191		—			64,191
	￦	1,286,026		(168,306	)		1,117,720		1,159,332		(94,418	)		1,064,914

Changes in Carrying Amount of Investment Property

Changes in the carrying amount of investment property for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	346,879		24,116		(8,056	)		—			29,784			392,723
Buildings		696,526		7,548		(3,339	)		(24,043	)		(5,153	)		671,539
Structures		1,819		1		—			(288	)		615			2,147
Construction-in-progress		39,068		13,910		—			—			(1,667	)		51,311
	￦	1,084,292		45,575		(11,395	)		(24,331	)		23,579			1,117,720

(*1) Impairment loss on investment property amounting to ￦318 million is included.

(*2) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Disposals			Depreciation			Others (*1)			Ending
	(in millions of Won)
Land	￦	392,723		20,941		(37,725	)		—			(15,537	)		360,402
Buildings		671,539		38,831		(9,506	)		(23,450	)		(43,374	)		634,040
Structures		2,147		—		—			(591	)		4,725			6,281
Construction-in-progress		51,311		17,648		—			—			(4,768	)		64,191
	￦	1,117,720		77,420		(47,231	)		(24,041	)		(58,954	)		1,064,914

(*1) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

XML

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment as of December 31, 2016 and 2017 are as follows:

	2016										2017
	Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value
	(in millions of Won)
Land	￦	2,607,660		(6,452	)		—			2,601,208		2,534,102		(6,452	)		—			2,527,650
Buildings		9,180,028		(4,183,974	)		(423	)		4,995,631		9,311,426		(4,433,996	)		(412	)		4,877,018
Structures		5,385,365		(2,476,818	)		(67	)		2,908,480		5,452,713		(2,686,802	)		(59	)		2,765,852
Machinery and equipment		46,698,254		(26,379,544	)		(320	)		20,318,390		46,669,612		(27,301,410	)		(245	)		19,367,957
Vehicles		306,770		(259,986	)		(85	)		46,699		296,815		(263,884	)		(70	)		32,861
Tools		385,960		(312,266	)		(2,314	)		71,380		380,144		(315,446	)		(1,058	)		63,640
Furniture and fixtures		609,736		(477,064	)		(266	)		132,406		643,779		(498,192	)		(148	)		145,439
Finance lease assets		248,590		(89,577	)		—			159,013		243,160		(97,903	)		—			145,257
Bearer plants		—		—			—			—		70,031		(4,516	)		—			65,515
Construction-in-progress		2,542,233		—			(5,101	)		2,537,132		1,897,885		—			(5,539	)		1,892,346
	￦	67,964,596		(34,185,681	)		(8,576	)		33,770,339		67,499,667		(35,608,601	)		(7,531	)		31,883,535

Changes in Carrying Amount of Property, Plant and Equipment

Changes in the carrying amount of property, plant and equipment for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Business combination		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	2,572,807		8,901		15,687		(16,176	)		(6,452	)		26,441			2,601,208
Buildings		5,165,725		37,493		277,242		(12,857	)		(396,899	)		(75,073	)		4,995,631
Structures		2,949,413		19,043		—		(1,994	)		(216,631	)		158,649			2,908,480
Machinery and equipment		21,093,743		193,856		47,021		(36,095	)		(2,277,740	)		1,297,605			20,318,390
Vehicles		52,005		8,967		88		(1,990	)		(18,484	)		6,113			46,699
Tools		73,478		17,546		635		(848	)		(27,396	)		7,965			71,380
Furniture and fixtures		148,099		30,650		32		(4,248	)		(51,361	)		9,234			132,406
Finance lease assets		92,796		79,556		—		(38	)		(13,409	)		108			159,013
Construction-in-progress		2,374,789		1,935,339		2,181		(4,255	)		—			(1,770,922	)		2,537,132
	￦	34,522,855		2,331,351		342,886		(78,501	)		(3,008,372	)		(339,880	)		33,770,339

(*1) Includes impairment losses on property, plant and equipment amounting to ￦196,882 million. During the year ended December 31, 2016, due to the existence of indicators for impairment, such as continuing operating loss on fuel cell business of the POSCO ENERGY CO., LTD., which is included in other reportable segment, the Company performed impairment test and recognized impairment loss of ￦61,565 million. Recoverable amount was determined based on value-in-use, which was calculated by applying a 14.0% discount rate. The impairment recorded in 2016 also included ￦58,388 million related to POSCO for individual assets based on disposal plans.

(*2) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Disposals			Depreciation (*1)			Others (*2)			Ending
	(in millions of Won)
Land	￦	2,601,208		3,477		(18,226	)		—			(58,809	)		2,527,650
Buildings		4,995,631		53,961		(5,782	)		(361,531	)		194,739			4,877,018
Structures		2,908,480		18,943		(2,558	)		(246,229	)		87,216			2,765,852
Machinery and equipment		20,318,390		194,653		(93,210	)		(2,217,435	)		1,165,559			19,367,957
Vehicles		46,699		9,982		(1,623	)		(22,340	)		143			32,861
Tools		71,380		16,424		(976	)		(28,539	)		5,351			63,640
Furniture and fixtures		132,406		61,597		(1,296	)		(48,416	)		1,148			145,439
Finance lease assets		159,013		4,760		(453	)		(14,810	)		(3,253	)		145,257
Bearer plants		—		—		—			(4,830	)		70,345			65,515
Construction-in-progress		2,537,132		1,894,067		(817	)		(36,706	)		(2,501,330	)		1,892,346
	￦	33,770,339		2,257,864		(124,941	)		(2,980,836	)		(1,038,891	)		31,883,535

(*1) Includes impairment losses on property, plant and equipment amounting to ￦117,231 million. During the year ended December 31, 2017, due to the existence of indicators for impairment, such as continuing operating loss on Suncheon Bay Personal Rapid Transit business of the Suncheon Eco Trans Co., Ltd, a subsidiary of the Company, the Company performed impairment test and recognized impairment loss of ￦48,070 million. The impairment recorded in 2017 also included ￦17,651 million related to POSCO for individual assets due to a decline in economic result and others.

(*2) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

Borrowing Costs Capitalized and Capitalized Interest Rate

Borrowing costs capitalized and the capitalized interest rate for the years ended December 31, 2016 and 2017 were as follows:

	2016		2017
	(in millions of Won)
Weighted average expenditure	￦	1,070,280		1,180,563
Borrowing costs capitalized		40,321		37,261
Capitalization rate (%)		3.32 ~ 3.82		1.74 ~ 3.45

Property, Plant and Equipment and Investment Property Pledged as Collateral

Property, plant and equipment and investment property pledged as collateral as of December 31, 2016 and 2017 are as follows:

		Book value
	Collateral right holder	2016		2017 (*2)
		(in millions of Won)
Land (*1)	Korean Development Bank and others	￦	925,670		822,057
Buildings and structures (*1)	Korean Development Bank and others		1,734,543		1,678,403
Machinery and equipment	Korean Development Bank and others		4,037,813		3,527,420
Construction-in-progress	Korean Development Bank and others		—		15,389
		￦	6,698,026		6,043,269

(*1) Investment property and other assets(land-use right) are included.

(*2) As of December 31, 2017, the pledged amount is ￦4,984,841 million.

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Goodwill and Other Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Goodwill and Other Intangible Assets

Goodwill and other intangible assets as of December 31, 2016 and 2017 are as follows:

	2016										2017
	Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value		Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value
	(in millions of Won)
Goodwill	￦	1,669,556		(294,425	)		—			1,375,131		1,604,288		(254,450	)		—			1,349,838
Intellectual property rights		2,923,030		(401,156	)		(703	)		2,521,171		3,140,159		(690,966	)		—			2,449,193
Premium in rental		139,843		(20,804	)		—			119,039		139,873		(21,563	)		—			118,310
Development expense		376,327		(259,184	)		(131	)		117,012		397,129		(316,892	)		(19	)		80,218
Port facilities usage rights		633,025		(376,408	)		—			256,617		705,692		(396,319	)		—			309,373
Exploration and evaluation assets		196,124		(33,856	)		—			162,268		296,320		(90,376	)		—			205,944
Customer relationships		859,643		(345,398	)		—			514,245		857,624		(390,679	)		—			466,945
Power generation permit		539,405		—			—			539,405		539,405		—			—			539,405
Other intangible assets		1,007,871		(524,000	)		(30	)		483,841		1,006,219		(573,152	)		(24	)		433,043
	￦	8,344,824		(2,255,231	)		(864	)		6,088,729		8,686,709		(2,734,397	)		(43	)		5,952,269

Changes in Carrying Amount of Goodwill and Other Intangible Assets

The changes in carrying amount of goodwill and other intangible assets for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Acquisitions		Disposals			Amortization			Impairment loss			Others (*2)			Ending
	(in millions of Won)
Goodwill	￦	1,461,954		—		—			—			(95,984	)		9,161			1,375,131
Intellectual property rights		2,667,086		56,849		(753	)		(204,112	)		(16,786	)		18,887			2,521,171
Premium in rental (*1)		127,949		1,964		(7,526	)		(243	)		(1,559	)		(1,546	)		119,039
Development expense		135,796		4,027		(60	)		(61,732	)		(298	)		39,279			117,012
Port facilities usage rights		264,801		—		—			(15,217	)		—			7,033			256,617
Exploration and evaluation assets		151,144		45,524		—			—			(3,290	)		(31,110	)		162,268
Customer relationships		559,809		—		—			(47,790	)		—			2,226			514,245
Power generation permit		539,405		—		—			—			—			—			539,405
Other intangible assets		497,810		52,350		(1,454	)		(48,910	)		(7,353	)		(8,602	)		483,841
	￦	6,405,754		160,714		(9,793	)		(378,004	)		(125,270	)		35,328			6,088,729

(*1) Premium in rental includes memberships with indefinite useful lives.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

2) For the year ended December 31, 2017

	Beginning		Acquisitions		Business combination		Disposals			Amortization			Impairment loss			Others (*2)			Ending
	(in millions of Won)
Goodwill	￦	1,375,131		—		—		—			—			(21,750	)		(3,543	)		1,349,838
Intellectual property rights		2,521,171		167,580		47,625		(450	)		(217,932	)		(74,524	)		5,723			2,449,193
Premium in rental (*1)		119,039		6,006		—		(3,666	)		(611	)		(1,661	)		(797	)		118,310
Development expense		117,012		3,479		—		(1,179	)		(66,847	)		(694	)		28,447			80,218
Port facilities usage rights		256,617		—		—		—			(19,912	)		—			72,668			309,373
Exploration and evaluation assets		162,268		91,548		—		—			—			(56,519	)		8,647			205,944
Customer relationships		514,245		—		—		—			(46,508	)		—			(792	)		466,945
Power generation permit		539,405		—		—		—			—			—			—			539,405
Other intangible assets		483,841		84,502		—		(1,641	)		(57,964	)		(11,829	)		(63,866	)		433,043
	￦	6,088,729		353,115		47,625		(6,936	)		(409,774	)		(166,977	)		46,487			5,952,269

(*1) Premium in rental includes memberships with indefinite useful lives.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

Allocation of Goodwill to Individually Operating Entities Which are Determined to be CGUs

For the purpose of impairment testing, goodwill is allocated to individually operating entities which are determined to be CGUs. The goodwill amounts as of December 31, 2016 and 2017 are as follows:

Reportable segments	Total number of CGUs
	2016		2017		CGUs	2016		2017
						(in millions of Won)
Steel		9		7	POSCO VST CO., LTD.	￦	36,955		36,955
					Others (*1)		13,151		12,494
Trading		2		2	POSCO DAEWOO Corporation (*1)		1,163,922		1,165,030
					PT. Bio Inti Agrindo		8,070		7,099
E&C		4		2	POSCO ENGINEERING & CONSTRUCTION CO., LTD. (*2)		—		90,426
					POSCO Engineering CO.,Ltd (*2)		111,309		—
					DONG FANG JIN HONG		166		157
Others		6		5	POSCO ENERGY CO., LTD.		26,471		26,471
					Others		15,087		11,206
Total		21		16		￦	1,375,131		1,349,838

(*1) For the year ended December 31, 2017, POSCO DAEWOO Corporation has taken over steel marketing and other business unit of POSCO Processing & Service. As a result, goodwill of POSCO Processing & Service amounting to ￦1,108 million was transferred to POSCO DAEWOO Corporation.

Recoverable amounts of POSCO DAEWOO Corporation are determined based on its value in use. As of December 31, 2017, value in use is estimated by applying 8.1% discount rate and 1.9% terminal growth rate within 5 years, the period for the estimated future cash flows, based on management’s business plan. The terminal growth rate does not exceed long-term average growth rate of its industry. No impairment loss on goodwill was recognized for the year ended December 31, 2017 as the recoverable amount exceeded the carrying amount of the CGU.

The estimated recoverable amount of the CGU exceeded the carrying amount by ￦117,324 million. Value in use of the CGU was affected by the assumptions such as discount rate and terminal growth used in discount cash flow model. When the discount rate increases by 0.25%, value in use will be decreased by 3.45% and when the terminal growth rate decreases by 0.25%, value in use will be decreased by 1.78%. Management believes that any reasonably possible negative change in the key assumptions on which the recoverable amount is based would result in impairment loss of goodwill.

(*2) For the year ended December 31, 2017, POSCO Engineering CO., Ltd was merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD, resulting in transfer of its goodwill to POSCO ENGINEERING & CONSTRUCTION CO., LTD.

Recoverable amounts of POSCO ENGINEERING & CONSTRUCTION CO., LTD are determined based on its value in use. As of December 31, 2017, value in use is estimated by applying 8.2% discount rate and 1.0% terminal growth rate within 5 years, the period for the estimated future cash flows, based on management’s business plan. The terminal growth rate does not exceed long-term average growth rate of its industry. Impairment loss on goodwill of ￦20,883 million was recognized for the year ended December 31, 2017 as the recoverable amount is lower than the carrying amount of the CGU.

Value in use of the CGU was affected by the assumptions such as discount rate and terminal growth used in discount cash flow model. When the discount rate increases by 0.25%, value in use will be decreased by 3.02% and when the terminal growth rate decreases by 0.25%, value in use will be decreased by 2.06%.

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Other Assets (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Other Current Assets and Other Non-Current Assets

Other current assets and other non-current assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Advance payment	￦	787,452		661,779
Prepaid expenses		105,102		143,032
Firm commitment asset		—		15,115
Others		1,930		1,316
		894,484		821,242
Non-current
Long-term advance payment		27,189		24,201
Long-term prepaid expenses		380,678		333,153
Others (*1)		159,813		131,657
	￦	567,680		489,011

(*1) As of December 31, 2016 and 2017, the Company recognized tax assets amounting to ￦100,693 million and ￦88,633 million, respectively, based on the Company’s best estimate of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years’ tax audits that were finalized and claim for rectification are finalized.

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Assets Pledges as Collateral

Assets pledged as collateral in regards to the borrowings as of December 31, 2017 are as follows:

	Bank	Book value		Pledged amount
	(in millions of Won)
Property, plant and equipment and Investment property (*1)	Korea Development Bank and others	￦	5,777,330		4,969,201
Trade accounts and notes receivable	Korea Development Bank and others		147,581		147,581
Inventories	Export-Import Bank of Korea and others		162,198		116,378
Financial instruments	Woori Bank and others		56,491		55,048
		￦6,143,600		5,288,208

(*1) Includes other assets(land-use right).

Short-term borrowings and current portion of long-term borrowings [member]

Summary of Borrowings

Short-term borrowings and current portion of long-term borrowings as of December 31, 2016 and 2017 are as follows:

	Bank	Issuance date	Maturity date	Interest rate (%)		2016			2017
	(in millions of Won)
Short-term borrowings
Bank overdrafts	JP Morgan and others	January, 2017~ December, 2017	January, 2018~ December, 2018		1.2~9.0	￦	254,036			217,879
Short-term borrowings	HSBC and others	January, 2017~ December, 2017	January, 2018~ December, 2018		0.3~10.5		7,725,691			7,956,939
							7,979,727			8,174,818
Current portion of long-term liabilities
Current portion of long-term borrowings	Export-Import Bank of Korea and others	September, 2001~ November, 2017	February, 2018~ December, 2018		0.4~8.5		1,390,733			1,407,123
Current portion of debentures	Korean Development Bank and others	August, 2009~ November, 2016	February, 2018~ December, 2018		1.4~6.1		825,176			1,693,974
Less: Current portion of discount on debentures issued							(829	)		(1,399	)
							2,215,080			3,099,698
						￦	10,194,807			11,274,516

Long-term borrowings [member]

Summary of Borrowings

Long-term borrowings, excluding current portion as of December 31, 2016 and 2017 are as follows:

	Bank	Issuance date	Maturity date	Interest rate (%)		2016			2017
	(in millions of Won)
Long-term borrowings	Export-Import bank of Korea and others	September, 2001~ December, 2017	March, 2019~ March, 2037		0.5~8.4	￦	6,420,612			4,839,199
Less: Present value discount							(55,799	)		(36,459	)
Bonds	Korea Development Bank and others	August, 2009~ November, 2017	February, 2019~ July, 2025		1.8~6.3		6,163,896			4,999,575
Less: Discount on debentures issued							(18,518	)		(13,174	)
						￦	12,510,191			9,789,141

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Provisions (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Provisions

Provisions as of December 31, 2016 and 2017 are as follows:

	2016				2017
	Current		Non-current		Current		Non-current
	(in millions of Won)
Provision for bonus payments	￦	42,986		—		49,171		—
Provision for construction warranties		10,551		86,158		11,804		106,232
Provision for legal contingencies and claims (*1)		4,348		80,498		495		36,269
Provision for the restoration (*2)		10,169		52,425		12,273		121,917
Others (*3,4)		46,811		118,658		37,203		212,754
	￦	114,865		337,739		110,946		477,172

(*1) The Company recognized probable outflow of resources amounting to ￦30,425 million and ￦27,963 million as provisions in relation to lawsuits against the Company as of December 31, 2016 and 2017, respectively.

(*2) Due to contamination of lands near the Company’s magnesium smelting plant located in Gangneung province and others, the Company recognized present values of estimated costs for recovery, ￦29,471 million as provisions for restoration as of December 31, 2017. In order to determine the estimated costs, the Company has assumed that it would use all of technologies and materials available for now to recover the land. In addition, the Company has applied a discount rate of 2.73% to measure present value of these costs.

(*3) As of December 31, 2016 and 2017, POSCO ENERGY CO., LTD., a subsidiary of the Company, recognized ￦87,827 million and ￦157,461 million of provisions for warranties, respectively, for the service contract on fuel cell based on its estimate of probable outflow of resources.

(*4) As of December 31, 2016 and 2017, the amount includes a provision of ￦23,600 million for expected outflow of resources in connection with the performance guarantee for the Hwaseong-Dongtan complexes development project of POSCO ENGINEERING & CONSTRUCTION CO., LTD.

Changes in Provisions

Changes in provisions for the years ended December 31, 2016 and 2017 were as follows:

1) For the year ended December 31, 2016

	Beginning		Increase		Utilization			Reversal			Others (*1)			Ending
	(in millions of Won)
Provision for bonus payments	￦	42,602		44,106		(42,211	)		(272	)		(1,239	)		42,986
Provision for construction warranties		81,446		33,925		(19,469	)		(2,695	)		3,502			96,709
Provision for legal contingencies and claims		52,610		45,525		(14,012	)		(188	)		911			84,846
Provisions for the restoration		45,111		42,529		(13,367	)		(12,475	)		796			62,594
Others		102,243		131,911		(68,143	)		(3,086	)		2,544			165,469
	￦	324,012		297,996		(157,202	)		(18,716	)		6,514			452,604

(*1) Includes adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2017

	Beginning		Increase		Utilization			Reversal			Others (*1)			Ending
	(in millions of Won)
Provision for bonus payments	￦	42,986		74,728		(64,319	)		(3,035	)		(1,189	)		49,171
Provision for construction warranties		96,709		40,916		(18,006	)		(2,502	)		919			118,036
Provision for legal contingencies and claims		84,846		27,459		(70,156	)		(1,749	)		(3,636	)		36,764
Provisions for the restoration		62,594		63,438		(8,530	)		—			16,688			134,190
Others		165,469		161,054		(64,850	)		(20,199	)		8,483			249,957
	￦	452,604		367,595		(225,861	)		(27,485	)		21,265			588,118

(*1) Includes adjustments of foreign currency translation differences and others.

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Expense Related to Post-employment Benefit Plans under Defined Contribution Plans

The expenses related to post-employment benefit plans under defined contribution plans for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Expense related to post-employment benefit plans under defined contribution plans	￦	25,224		30,344		35,538

Amounts Recognized in Relation to Net Defined Benefit Liabilities in Statements of Financial Position

The amounts recognized in relation to net defined benefit liabilities in the statements of financial position as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Present value of funded obligations	￦	1,715,583			1,826,907
Fair value of plan assets (*1)		(1,693,118	)		(1,714,166	)
Present value of non-funded obligations		17,437			16,228
Net defined benefit liabilities	￦	39,902			128,969

(*1) As of December 31, 2016 and 2017, the Company recognized net defined benefit assets amounting to ￦83,702 million and ￦8,224 million, respectively, since there are consolidated entities whose fair value of plan assets exceeded the present value of defined benefit obligations.

Changes in Present Value of Defined Benefit Obligations and Fair Value of Plan Assets

Changes in present value of defined benefit obligations for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Defined benefit obligations at the beginning of period	￦	1,714,115			1,733,020
Current service costs		285,706			209,612
Interest costs		39,286			35,830
Remeasurements:		(32,927	)		51,994
— Gain from change in financial assumptions		(72,910	)		(50,218	)
— Loss (gain) from change in demographic assumptions		(4,140	)		15,952
— Others		44,123			86,260
Benefits paid		(278,278	)		(185,220	)
Others		5,118			(2,101	)
Defined benefit obligations at the end of period	￦	1,733,020			1,843,135

Changes in fair value of plan assets for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Fair value of plan assets at the beginning of period	￦	1,532,090			1,693,118
Interest on plan assets		37,385			45,516
Remeasurement of plan assets		(6,963	)		(17,190	)
Contributions to plan assets		328,671			164,828
Benefits paid		(189,817	)		(168,643	)
Others		(8,248	)		(3,463	)
Fair value of plan assets at the end of period	￦	1,693,118			1,714,166

Fair Value of Plan Assets

The fair value of plan assets as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Equity instruments	￦	56,187		41,218
Debt instruments		411,726		367,027
Deposits		1,167,475		1,254,571
Others		57,730		51,350
	￦	1,693,118		1,714,166

Amounts Recognized in Consolidated Statements of Comprehensive Income

The amounts recognized in consolidated statements of comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Current service costs	￦	239,508		285,706		209,612
Net interest costs (*1)		5,894		1,901		(9,686	)
	￦	245,402		287,607		199,926

(*1) The actual return on plan assets amounted to ￦32,630 million, ￦30,422 million and ￦28,326 million for the years ended December 31, 2015, 2016 and 2017, respectively.

The above expenses by function were as follows:

	2015		2016		2017
	(in millions of Won)
Cost of sales	￦	170,334		161,810		131,724
Selling and administrative expenses		74,210		124,994		67,424
Others		858		803		778
	￦	245,402		287,607		199,926

Accumulated Actuarial Gains (Losses), Net of Tax Recognized in Other Comprehensive Income

Accumulated actuarial gains (losses), net of tax recognized in other comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Beginning	￦	(314,106	)		(272,152	)		(251,612	)
Current actuarial gains (losses)		41,954			20,540			(47,543	)
Ending	￦	(272,152	)		(251,612	)		(299,155	)

Principal Actuarial Assumptions

The principal actuarial assumptions as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(%)
Discount rate		2.15~8.59		2.70~7.75
Expected future increase in salaries (*1)		1.00~10.00		1.04~10.00

(*1) The expected future increase in salaries is based on the average salary increase rate for the past three years.

Changes to Defined Benefit Obligation Due to Reasonably Possible Changes to one of the Relevant Actuarial Assumptions

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

	1% Increase						1% Decrease
	Amount			Percentage (%)			Amount			Percentage (%)
	(in millions of Won)
Discount rate	￦	(123,568	)		(6.7	)		138,196			7.5
Expected future increase in salaries		136,385			7.4			(124,400	)		(6.7	)

Maturity of Expected Benefit Payments

As of December 31, 2017 the maturity of the expected benefit payments are as follows:

	Within 1 year		1 year - 5 years		5 years - 10 years		10 years - 20 years		After 20 years		Total
	(in millions of Won)
Benefits paid	￦	109,212		613,786		792,792		655,599		347,280		2,518,669

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Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Other Liabilities

Other liabilities as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Current
Due to customers for contract work	￦	1,031,663		782,968
Advances received		864,536		1,183,108
Unearned revenue		8,702		7,121
Withholdings		186,665		221,940
Firm commitment liability		—		12,192
Others		22,307		33,590
	￦	2,113,873		2,240,919
Non-current
Advances received		418,832		353,631
Unearned revenue		20,013		18,440
Others		40,338		14,360
	￦	479,183		386,431

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Share Capital and Capital Surplus (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Share Capital

(a) Share capital as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(Share, in Won)
Authorized shares		200,000,000		200,000,000
Par value	￦	5,000		5,000
Issued shares(*1)		87,186,835		87,186,835
Shared capital(*2)	￦	482,403,125,000		482,403,125,000

(*1) As of December 31, 2017, total shares of ADRs of 36,840,292 outstanding in overseas stock market are equivalent to 9,210,073 of common stock.

(*2) As of December 31, 2017, the difference between the ending balance of common stock and the par value of issued common stock is ￦46,469 million due to retirement of 9,293,790 treasury stocks.

Changes in Issued Common Stock

(b) The changes in issued common stock for the years ended December 31, 2016 and 2017 were as follows:

	2016							2017
	Issued shares		Treasury shares			Number of outstanding shares		Issued shares		Treasury shares			Number of outstanding shares
	(share)
Beginning		87,186,835		(7,191,187	)		79,995,648		87,186,835		(7,189,170	)		79,997,665
Disposal of treasury shares		—		2,017			2,017		—		1,939			1,939
Ending		87,186,835		(7,189,170	)		79,997,665		87,186,835		(7,187,231	)		79,999,604

Summary of Capital Surplus

(c) Capital surplus as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Share premium	￦	463,825		463,825
Gain on disposal of treasury shares		783,788		783,914
Other capital deficit		159,634		174,282
	￦	1,407,247		1,422,021

Summary of Redeemable Convertible Preferred Shares

(d) During the year ended December 31, 2017, POSCO ENERGY CO., LTD., a subsidiary of the Company, issued redeemable convertible preferred shares which are classified as non-controlling interests in the consolidated financial statements. The details of redeemable convertible preferred shares as of December 31, 2017 are as follows:

	Redeemable Convertible Preferred Shares
	(Share, in Won)
Issue date	February 25, 2017
Number of shares issued	8,643,193 shares
Price per share	￦28,346
Voting rights	No voting rights for 3 years from issue date
Dividend rights	Comparative, Non-participating · Minimum dividend rate for 1~3 years: 3.98% · Minimum dividend rate after 4 years: Comparative rate + Issuance spread + 2%
Details about Redemption	Issuer can demand redemption of all or part of redeemable convertible preferred shares every year after the issue date, for a period of 10 years from the issue date.
Details about Conversion	Stockholders of redeemable convertible preferred shares can convert them to common shares from 3 years after the issue date to the end of the redemption period (10 years). Conversion price is equal to issue price, which could be adjusted according to anti-dilution clause.

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Hybrid Bonds (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Hybrid Bonds

(a) Hybrid bonds classified as equity as of December 31, 2016 and 2017 are as follows:

	Date of issue		Date of maturity		Interest rate (%)		2016			2017
	(in millions of Won)
Hybrid bond 1-1 (*1)		2013-06-13		2043-06-13		4.30	￦	800,000			800,000
Hybrid bond 1-2 (*1)		2013-06-13		2043-06-13		4.60		200,000			200,000
Issuance cost								(3,081	)		(3,081	)
							￦	996,919			996,919

(*1) Details of hybrid bonds as of December 31, 2017 are as follows:

	Hybrid bond 1-1	Hybrid bond 1-2
	(in millions of Won)
Issue price	800,000	200,000
Maturity date	30 years (POSCO has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-06-12: 4.3% Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.3% · After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	Issue date ~ 2023-06-12: 4.6% Reset every 10 years as follows; · After 10 years: return on government bond (10 years) + 1.4% · After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to POSCO)
Others	POSCO can call the hybrid bond at year 5 and interest payment date afterwards	POSCO can call the hybrid bond at year 10 and interest payment date afterwards

POSCO ENERGY CO., LTD. [member]

Summary of Hybrid Bonds

(b) POSCO ENERGY CO., LTD., a subsidiary of the Company, issued hybrid bonds, which are classified as non-controlling interests in the consolidated financial statements. Hybrid bonds as of December 31, 2016 and 2017 are as follows:

	Date of issue		Date of maturity		Interest rate (%)		2016			2017
	(in millions of Won)
Hybrid bond 1-1 (*1)		2013-08-29		2043-08-29		4.66	￦	165,000			165,000
Hybrid bond 1-2 (*1)		2013-08-29		2043-08-29		4.72		165,000			165,000
Hybrid bond 1-3 (*1)		2013-08-29		2043-08-29		4.72		30,000			30,000
Hybrid bond 1-4 (*1)		2013-08-29		2043-08-29		5.21		140,000			140,000
Issuance cost								(1,532	)		(1,532	)
							￦	498,468			498,468

(*1) Details of issuance of hybrid bonds of POSCO ENERGY CO., LTD. as of December 31, 2017 are as follows:

	Hybrid bond 1-1	Hybrid bond 1-2 and 1-3	Hybrid bond 1-4
	(in millions of Won)
Issue price	165,000	195,000	140,000
Maturity date	30 years (The Company has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-08-29: 4.66% Reset every 5 years as follows;	Issue date ~ 2018-08-29: 4.72% Reset every 5 years as follows;	Issue date ~ 2023-08-29: 5.21% Reset every 10 years as follows;
	· After 5 years: return on government bond (5 years) + 1.39%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	· After 5 years: return on government bond (5 years) + 1.45%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%	· After 10 years: return on government bond (10 years) + 1.55%· After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company but for hybrid bond 1-3, the Company pays every quarter(3/30, 6/30, 9/30, 12/30))
Others	The issuer can call the hybrid bond at year 5 and interest payment date afterwards		The issuer can call the hybrid bond at year 10 and interest payment date afterwards

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Reserves (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Reserves

(a) Reserves as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Accumulated comprehensive loss of investments in associates and joint ventures	￦	(301,734	)		(516,528	)
Changes in the unrealized fair value of available-for-sale investments		276,143			230,190
Currency translation differences		(99,264	)		(372,166	)
Gain or losses on valuation of derivatives		—			(136	)
Others		(19,130	)		(23,916	)
	￦	(143,985	)		(682,556	)

Unrealized fair value of available-for-sale investments [Member]

Summary of Reserves

(b) Changes in the unrealized fair value of available-for-sale investments for the years ended December 31, 2016 and 2017 were as follows:

	2016			2017
	(in millions of Won)
Beginning balance	￦	(38,294	)		276,143
Changes in the unrealized fair value of available-for-sale investments		218,542			183,761
Reclassification to profit or loss upon disposal		(88,781	)		(299,862	)
Impairment of available-for-sale investments		187,108			96,083
Others		(2,432	)		(25,935	)
Ending balance	￦	276,143			230,190

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Treasury Shares (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Changes in Treasury Shares

The changes in treasury shares for the years ended December 31, 2016 and 2017 were as follows:

	2016						2017
	Number of shares			Amount			Number of shares			Amount
	(shares, in millions of Won)
Beginning		7,191,187		￦	1,533,898			7,189,170		￦	1,533,468
Disposal of treasury shares		(2,017	)		(430	)		(1,939	)		(414	)
Ending		7,189,170		￦	1,533,468			7,187,231		￦	1,533,054

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Revenue (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Details of Revenue

Details of revenue for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Sale of goods	￦	47,018,466		43,683,169		51,357,709
Services		2,489,447		2,276,534		2,064,583
Construction revenue		8,546,454		6,497,723		6,299,483
Rental income		11,757		8,930		6,370
Others		456,144		473,415		458,722
	￦	58,522,268		52,939,771		60,186,867

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Construction Contracts (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Details of In-Progress Construction Contracts

(a) Details of in-progress construction contracts as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Aggregate amount of costs incurred	￦	22,012,241			21,404,321
Add: Recognized profits		1,429,555			1,524,208
Less: Recognized losses		(1,139,165	)		(718,593	)
Cumulative construction revenue		22,302,631			22,209,936
Less: Progress billing		(22,483,968	)		(22,265,891	)
Others		9,961			994
	￦	(171,376	)		(54,961	)

Details of Due from/to Customers for Contract Work

(b) Details of due from customers for contract work and due to customers for contract work related to construction as of December 31, 2016 and 2017 are as follows:

	2016			2017
	(in millions of Won)
Unbilled due from customers for contract work	￦	860,287			728,007
Due to customers for contract work		(1,031,663	)		(782,968	)
	￦	(171,376	)		(54,961	)

Details of Changes in Estimated Total Contract Costs and Impact on Profit Before Income Taxes

(c) Due to the factors causing the variation of costs for the years ended December 31, 2016 and 2017, the estimated total contract costs have changed. Details of changes in estimated total contract costs and the impact on profit before income taxes for the years ended December 31, 2016, 2017 and future periods are as follows:

	2016			2017
	(in millions of Won)
Changes in estimated total contract costs	￦	532,801			164,812
Changes in profit before income taxes of construction contract:
- Current period		(790,391	)		(69,656	)
- Future periods		69,464			(6,041	)

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Selling and Administrative Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Administrative Expenses

Administrative expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Wages and salaries	￦	810,851		769,589		774,900
Expenses related to post-employment benefits		87,293		200,956		78,654
Other employee benefits		193,967		176,794		159,920
Travel		48,426		40,828		39,790
Depreciation		105,470		103,442		97,261
Amortization		168,525		139,569		146,314
Communication		12,502		11,186		11,740
Electricity expenses		9,573		7,527		7,050
Taxes and public dues		74,315		78,895		72,826
Rental		119,836		82,005		69,976
Repairs		11,677		11,316		9,859
Entertainment		15,740		13,157		11,582
Advertising		90,698		86,141		119,724
Research & development		135,508		120,608		125,795
Service fees		218,751		201,129		193,387
Vehicles maintenance		10,756		10,090		8,211
Industry association fee		12,603		13,468		10,140
Conference		16,053		13,108		14,494
Increase to provisions		14,900		6,532		10,990
Bad debt expenses		189,616		165,150		173,694
Others		48,188		40,050		40,493
	￦	2,395,248		2,291,540		2,176,800

Summary of Selling Expenses

Selling expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Freight and custody expenses	￦	1,531,906		1,342,009		1,336,969
Operating expenses for distribution center		11,021		10,315		10,503
Sales commissions		80,165		94,377		115,925
Sales advertising		3,220		5,117		3,800
Sales promotion		22,443		10,670		12,414
Sample		2,576		2,335		1,989
Sales insurance premium		30,682		31,379		36,546
Contract cost		38,425		49,480		23,061
Others		8,518		8,004		16,070
	￦	1,728,956		1,553,686		1,557,277

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Research and Development Expenditures Recognized as Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Research and Development Expenditures Recognized as Expenses

Research and development expenditures recognized as expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Administrative expenses	￦	135,508		120,608		125,795
Cost of sales		356,173		324,190		361,093
	￦	491,681		444,798		486,888

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Other Operating Income and Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Details of Other Operating Income and Expenses

Details of other operating income and expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Other operating income
Gain on disposal of assets held for sale	￦	227,956			23,112			1,180
Gain on disposal of investments in subsidiaries, associates and joint ventures		88,718			23,305			81,794
Gain on disposal of property, plant and equipment		22,730			23,826			32,145
Gain on disposal of intangible assets		1,432			671			23,391
Recovery of allowance for other doubtful accounts		10,452			12,658			2,743
Gain on valuation of firm commitment		—			—			56,301
Rental revenues		1,019			1,771			1,498
Gain on insurance proceeds		14,976			22,400			5,878
Others (*1)		181,765			107,393			246,294
	￦	549,048			215,136			451,224
Other operating expenses
Impairment losses on assets held for sale	￦	(133,547	)		(24,890	)		—
Loss on disposal of assets held for sale		(190,357	)		(254	)		(608	)
Loss on disposal of investments in subsidiaries, associates and joint ventures		(18,996	)		(22,499	)		(19,985	)
Loss on disposal of property, plant and equipment		(101,732	)		(86,622	)		(151,343	)
Impairment losses on property, plant and equipment		(136,269	)		(196,882	)		(117,231	)
Impairment losses on goodwill and intangible assets		(161,412	)		(127,875	)		(167,995	)
Other bad debt expenses		(158,071	)		(50,225	)		(100,920	)
Loss on valuation of firm commitment		—			—			(43,164	)
Idle tangible asset expenses		(12,773	)		(6,437	)		(10,490	)
Incease to provisions		(18,396	)		(53,058	)		(33,964	)
Donations		(62,957	)		(43,810	)		(51,424	)
Others (*2)		(447,788	)		(143,168	)		(95,172	)
	￦	(1,442,298	)		(755,720	)		(792,296	)

(*1) The Company recognized the refund of VAT and others amounting to ￦160,501 million as other operating income for the year ended December 31, 2017, based on the result of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years tax audits for rectification were finalized.

(*2) The Company paid ￦299,037 million in connection with its settlement with Nippon Steel & Sumitomo Metal Corporation for a civil lawsuit regarding improperly acquired trade secrets and patents for the year ended December 31, 2015.

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Finance Income and Costs (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Details of Finance Income and Costs

Details of finance income and costs for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Finance income
Interest income	￦	210,193			182,475			212,451
Dividend income		183,712			41,000			92,962
Gain on foreign currency transactions		1,025,240			1,032,552			785,616
Gain on foreign currency translations		466,090			377,723			564,016
Gain on derivatives transactions		366,482			316,524			210,727
Gain on valuations of derivatives		155,334			147,111			64,735
Gain on disposals of available-for-sale financial assets		139,136			130,830			425,684
Others		10,886			3,765			16,476
	￦	2,557,073			2,231,980			2,372,667
Finance costs
Interest expenses	￦	(788,772	)		(658,726	)		(653,115	)
Loss on foreign currency transactions		(1,157,161	)		(1,147,192	)		(756,654	)
Loss on foreign currency translations		(716,722	)		(405,391	)		(422,880	)
Loss on derivatives transactions		(343,118	)		(338,314	)		(236,273	)
Loss on valuation of derivatives		(72,133	)		(162,676	)		(226,487	)
Impairment loss on available-for-sale financial assets		(142,781	)		(248,404	)		(123,214	)
Others		(166,367	)		(53,487	)		(65,654	)
	￦	(3,387,054	)		(3,014,190	)		(2,484,277	)

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Expenses by Nature (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Expenses by Nature

Expenses that are recorded by nature as cost of sales, selling and administrative expenses and other operating expenses in the statements of comprehensive income for the years ended December 31, 2015, 2016 and 2017 were as follows (excluding finance costs and income tax expense):

	2015		2016		2017
	(in millions of Won)
Raw material used, changes in inventories and others	￦	33,939,108		30,177,732		35,584,184
Employee benefits expenses (*2)		3,472,295		3,444,276		3,357,861
Outsourced processing cost		8,681,271		7,678,055		7,074,948
Electricity expenses		1,251,546		1,018,429		933,045
Depreciation (*1)		2,836,663		2,835,843		2,887,646
Amortization		381,583		378,004		409,774
Freight and custody expenses		1,531,906		1,342,009		1,336,969
Sales commissions		80,165		94,377		115,925
Loss on disposal of property, plant and equipment		101,732		86,622		151,343
Impairment loss on property, plant and equipment		136,269		196,882		117,231
Impairment loss on goodwill and intangible assets		161,412		127,875		167,995
Increase to provisions		86,903		189,914		215,383
Donations		62,957		43,810		51,424
Other expenses		4,861,126		3,258,583		4,038,242
	￦	57,584,936		50,872,411		56,441,970

(*1) Includes depreciation expense of investment property.

(*2) The details of employee benefits expenses for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015		2016		2017
	(in millions of Won)
Wages and salaries	￦	3,186,237		3,016,488		3,105,364
Expenses related to post-employment benefits		286,058		427,788		252,497
	￦	3,472,295		3,444,276		3,357,861

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Income Tax Expense

(a) Income tax expense for the years ended December 31, 2015, 2016 and 2017 was as follows:

	2015			2016			2017
	(in millions of Won)
Current income taxes	￦	553,041			699,269			864,143
Deferred income tax due to temporary differences		(253,860	)		(209,706	)		300,037
Items recorded directly in equity		(32,621	)		(110,019	)		21,560
Income tax expense	￦	266,560			379,544			1,185,740

Income Tax Credit (Charged) Directly to Equity

(b) The income taxes credited (charged) directly to equity for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Net changes in the unrealized fair value of available-for-sale investments	￦	60,077			(100,550	)		1,271
Loss (gain) on sale of treasury shares		12			(10	)		(40	)
Other capital surplus		(86,765	)		—			—
Others		(5,945	)		(9,459	)		20,329
	￦	(32,621	)		(110,019	)		21,560

Reconciliation Of Calculated Income Tax Expense Based on the Statutory Rate to Actual Amount of Taxes Recorded

(c) The following table reconciles the calculated income tax expense based on POSCO’s statutory rate (24.2%) to the actual amount of taxes recorded by the Company for the years ended December 31, 2015, 2016 and 2017.

	2015			2016			2017
	(in millions of Won)
Profit before income tax expense	￦	150,345			1,411,609			4,095,051
Income tax expense computed at statutory rate		35,921			341,148			990,540
Adjustments:
Tax credits		(152,139	)		(30,124	)		(40,757	)
Over provisions from prior years		(47,053	)		(11,829	)		(20,912	)
Investment in subsidiaries, associates and joint ventures		439,575			76,751			55,113
Tax effects due to permanent differences		(26,045	)		(9,962	)		4,798
Effect of tax rate change (*1)		—			—			175,647
Others		16,301			13,560			21,311
		230,639			38,396			195,200
Income tax expense	￦	266,560			379,544			1,185,740
Effective tax rate (%)		177.30	%		26.89	%		28.96	%

(*1) During the year ended December 31, 2017, the statutory rate changed from 24.2% to 27.5% for taxable income in excess of ￦300,000 million was enacted as a result of a revision to Korean tax law, which will be effective from 2018.

Movements in Deferred Tax Assets (Liabilities)

(d) The movements in deferred tax assets (liabilities) for the years ended December 31, 2016 and 2017 were as follows:

	2016									2017
	Beginning			Inc. (Dec.)			Ending			Beginning			Inc. (Dec.)			Ending
	(in millions of Won)
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	202,592			10,527			213,119			213,119			60,875			273,994
Reserve for technology developments		(177,676	)		85,716			(91,960	)		(91,960	)		53,973			(37,987	)
PP&E — Depreciation		(15,240	)		3,601			(11,639	)		(11,639	)		26,280			14,641
Share of profit or loss of equity-accounted investees		(45,174	)		115,433			70,259			70,259			125,783			196,042
Allowance for inventories valuation		13,373			2,278			15,651			15,651			(4,871	)		10,780
PP&E — Revaluation		(1,393,501	)		(130,648	)		(1,524,149	)		(1,524,149	)		(304,015	)		(1,828,164	)
Prepaid expenses		19,180			485			19,665			19,665			335			20,000
PP&E — Impairment loss		8,055			(2,760	)		5,295			5,295			245			5,540
Gain or loss on foreign currency translation		(29,355	)		23,398			(5,957	)		(5,957	)		(42,515	)		(48,472	)
Defined benefit obligations		354,175			7,663			361,838			361,838			68,279			430,117
Plan assets		(287,839	)		(28,686	)		(316,525	)		(316,525	)		(36,129	)		(352,654	)
Provision for construction losses		612			385			997			997			(556	)		441
Provision for construction warranty		21,604			2,718			24,322			24,322			4,395			28,717
Accrued income		(8,982	)		(459	)		(9,441	)		(9,441	)		(3,474	)		(12,915	)
Impairment loss on AFS		266,474			(21,306	)		245,168			245,168			(42,373	)		202,795
Difference in acquisition costs of treasury shares		62,116			(17	)		62,099			62,099			8,448			70,547
Others		296,207			107,541			403,748			403,748			(27,740	)		376,008
		(713,379	)		175,869			(537,510	)		(537,510	)		(113,060	)		(650,570	)
Deferred income taxes recognized directly to equity
Loss (gain) on valuation of available-for-sale investments		50,043			(100,550	)		(50,507	)		(50,507	)		1,271			(49,236	)
Others		61,291			(9,459	)		51,832			51,832			20,329			72,161
		111,334			(110,009	)		1,325			1,325			21,600			22,925
Deferred tax from tax credit
Tax credit carry-forward and others		277,261			30,074			307,335			307,335			(189,303	)		118,032
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		(18,089	)		104,219			86,130			86,130			(17,704	)		68,426
	￦	(342,873	)		200,153			(142,720	)		(142,720	)		(298,467	)		(441,187	)

Summary of Deferred Tax Assets And Liabilities

(e) Deferred tax assets and liabilities as of December 31, 2016 and 2017 are as follows:

	2016								2017
	Assets		Liabilities			Net			Assets		Liabilities			Net
	(in millions of Won)
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	213,119		—			213,119			273,994		—			273,994
Reserve for technology developments		—		(91,960	)		(91,960	)		—		(37,987	)		(37,987	)
PP&E — Depreciation		50,843		(62,482	)		(11,639	)		59,912		(45,271	)		14,641
Share of profit or loss of equity-accounted investees		178,538		(108,279	)		70,259			236,637		(40,595	)		196,042
Allowance for inventories valuation		15,651		—			15,651			10,780		—			10,780
PP&E — Revaluation		—		(1,524,149	)		(1,524,149	)		—		(1,828,164	)		(1,828,164	)
Prepaid expenses		19,665		—			19,665			20,000		—			20,000
PP&E — Impairment loss		5,397		(102	)		5,295			5,639		(99	)		5,540
Gain or loss on foreign currency translation		99,836		(105,793	)		(5,957	)		113,760		(162,232	)		(48,472	)
Defined benefit obligations		361,838		—			361,838			430,117		—			430,117
Plan assets		—		(316,525	)		(316,525	)		—		(352,654	)		(352,654	)
Provision for construction losses		997		—			997			441		—			441
Provision for construction warranty		24,322		—			24,322			28,717		—			28,717
Accrued income		—		(9,441	)		(9,441	)		—		(12,915	)		(12,915	)
Impairment loss on AFS		245,168		—			245,168			202,795		—			202,795
Difference in acquisition costs of treasury shares		62,099		—			62,099			70,547		—			70,547
Others		452,425		(48,677	)		403,748			473,025		(97,017	)		376,008
		1,729,898		(2,267,408	)		(537,510	)		1,926,364		(2,576,934	)		(650,570	)
Deferred income taxes recognized directly to equity
Loss (gain) on valuation of available-for-sale investments		50,245		(100,752	)		(50,507	)		110,865		(160,101	)		(49,236	)
Others		65,532		(13,700	)		51,832			92,981		(20,820	)		72,161
		115,777		(114,452	)		1,325			203,846		(180,921	)		22,925
Deferred tax from tax credit
Tax credit carry-forward and others		307,335		—			307,335			118,032		—			118,032
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		561,506		(475,376	)		86,130			563,406		(494,980	)		68,426
	￦	2,714,516		(2,857,236	)		(142,720	)		2,811,648		(3,252,835	)		(441,187	)

XML

Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Basic And Diluted Earnings Per Share

Basic and diluted earnings per share for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in Won, except per share information)
Profit attribute to controlling interest	￦	171,493,811,117			1,354,806,734,940			2,756,230,487,872
Interests of hybrid bonds		(33,029,632,499	)		(33,225,163,081	)		(33,048,799,997	)
Weighted-average number of common shares outstanding (*1)		79,993,834			79,996,389			79,998,600
Basic and diluted earnings per share	￦	1,731			16,521			34,040

(*1) The weighted-average number of common shares used to calculate basic and diluted earnings per share are as follows:

(shares)	2015			2016			2017
Total number of common shares issued		87,186,835			87,186,835			87,186,835
Weighted-average number of treasury shares		(7,193,001	)		(7,190,446	)		(7,188,235	)
Weighted-average number of common shares outstanding		79,993,834			79,996,389			79,998,600

XML

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Significant Financial Transactions Between the Company, Excluding the Controlling Company, and Related Parties

(e) Significant financial transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2016 and 2017 were as follows:

1) December 31, 2016

	Beginning		Lend		Collect			Others (*3)			Ending
	(in millions of Won)
Associates and joint ventures
METAPOLIS Co.,Ltd.	￦	26,000		—		(12,730	)		—			13,270
Posco e&c Songdo International Building (*1)		—		298,865		—			(298,865	)		—
DMSA/AMSA (*2)		99,854		11,774		—			(20,990	)		90,638
South-East Asia Gas Pipeline Company Ltd.		283,954		27,087		(43,080	)		8,644			276,605
PT. Batutua Tembaga Raya		36,830		—		—			1,290			38,120
PT. Tanggamus Electric Power		2,359		1,174		—			73			3,606
PT. Wampu Electric Power		4,454		1,169		—			138			5,761
PT. POSMI Steel Indonesia		4,688		—		—			146			4,834
Nickel Mining Company SAS		17,580		40,594		—			2,251			60,425
POSK(Pinghu) Steel Processing Center Co., Ltd.		5,743		5,683		(11,366	)		(60	)		—
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.		58,600		—		—			1,825			60,425
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		10,782		—		(4,471	)		336			6,647
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		—		6,959		—			292			7,251
Hamparan Mulya		3,516		—		—			110			3,626
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		5,274		—		—			164			5,438
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		11,720		—		(3,480	)		220			8,460
POS-SeAH Steel Wire (Thailand) Co., Ltd.		—		6,959		—			292			7,251
AMCI (WA) PTY LTD		85,168		4,665		—			1,942			91,775
	￦	656,522		404,929		(75,127	)		(302,192	)		684,132

(*1) During the year ended December 31, 2016, it was classified as a subsidiary from an associate.

(*2) During the year ended December 31, 2016, loans amounting to ￦24,624 million have been converted to shares of DMSA/AMSA, and its amount is included in others.

(*3) Includes adjustments of foreign currency translation differences and others.

2) December 31, 2017

	Beginning		Lend		Collect			Others (*4)			Ending
		(in millions of Won)
Associates and joint ventures
METAPOLIS Co.,Ltd. (*1)	￦	13,270		—		—			(13,270	)		—
New Songdo International City Development, LLC		—		484,644		(201,869	)		—			282,775
GALE International Korea, LLC		—		2,000		—			—			2,000
DMSA/AMSA (*2)		90,638		2,956		—			(23,881	)		69,713
South-East Asia Gas Pipeline Company Ltd.		276,605		28,967		(46,252	)		(29,440	)		229,880
PT. Batutua Tembaga Raya		38,120		—		—			(9,072	)		29,048
PT. Tanggamus Electric Power		3,606		—		—			(409	)		3,197
PT. Wampu Electric Power		5,761		—		—			(654	)		5,107
PT. POSMI Steel Indonesia		4,834		—		—			(548	)		4,286
Nickel Mining Company SAS		60,425		—		—			(757	)		59,668
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. (*1)		60,425		—		—			(60,425	)		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		6,647		—		(577	)		(713	)		5,357
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		7,251		—		—			(823	)		6,428
Hamparan Mulya		3,626		—		(3,626	)		—			—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		5,438		—		(5,438	)		—			—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		8,460		—		(2,262	)		(841	)		5,357
POS-SeAH Steel Wire (Thailand) Co., Ltd.		7,251		—		(1,142	)		319			6,428
AMCI (WA) PTY LTD		91,775		4,327		—			(4,041	)		92,061
POS-AUSTEM YANTAI AUTOMOTIVE CO.,LTD (*3)		—		—		—			5,357			5,357
POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD (*3)		—		—		—			8,571			8,571
SAMHWAN VINA CO., LTD (*3)		—		—		—			1,071			1,071
	￦	684,132		522,894		(261,166	)		(129,556	)		816,304

(*1) During the year ended December 31, 2017, it was excluded from associates.

(*2) During the year ended December 31, 2017, loans amounting to ￦13,712 million have been converted to shares of DMSA/AMSA, and its amount is included in others.

(*3) During the year ended December 31, 2017, it was newly classified to associates and joint ventures.

(*4) Includes adjustments of foreign currency translation differences and others.

Details of Compensation to Key Management Officers

(f) For the years ended December 31, 2015, 2016 and 2017, details of compensation to key management officers were as follows:

	2015		2016		2017
	(in millions of Won)
Short-term benefits	￦	111,278		90,916		112,688
Long-term benefits		19,513		17,905		8,632
Retirement benefits		21,850		17,870		20,422
	￦	152,641		126,691		141,742

Posco [member]

Significant Transactions With Related Parties

(a) Significant transactions between the controlling company and related parties for the years ended December 31, 2015, 2016 and 2017 were as follows:

1) For the year ended December 31, 2015

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	4,441		145		19		427,760		2,250		37,488
POSCO Processing & Service		1,074,826		24		437,626		—		—		2,281
POSCO COATED & COLOR STEEL Co., Ltd.		380,626		—		—		—		9,359		104
POSCO ICT (*3)		1,259		7		—		210,877		29,612		182,745
eNtoB Corporation		—		—		261,989		6,501		130		22,017
POSCO CHEMTECH		436,594		30,343		519,956		9,515		297,183		1,773
POSCO ENERGY CO., LTD.		188,458		1,359		—		—		—		6
POSCO TMC Co., Ltd.		263,242		—		—		—		1,497		1,560
POSCO AST		362,658		15		4,115		—		39,175		1,611
POSHIMETAL Co., Ltd.		10,777		151		145,165		—		—		46
POSCO DAEWOO Corporation		3,505,187		34,334		46,675		—		—		480
SeAH Changwon Integrated Special Steel (*4)		2,811		176,904		8,239		—		515		75
POSCO PLANTEC Co., Ltd. (*4)		4,280		33		2,544		125,192		15,135		13,649
POSCO Thainox Public Company Limited		268,576		10		5,147		—		—		34
POSCO America Corporation		624,549		6		—		—		—		725
POSCO Canada Ltd.		—		—		111,243		—		—		—
POSCO Asia Co., Ltd.		1,822,932		960		269,086		—		513		2,273
Qingdao Pohang Stainless Steel Co., Ltd.		118,845		—		—		—		—		220
POSCO JAPAN Co., Ltd.		1,051,910		9,383		25,957		2,278		201		2,754
POSCO MEXICO S.A. DE C.V.		270,184		80		—		—		—		11
PT. KRAKATAU POSCO		—		—		118,888		—		—		—
POSCO Maharashtra Steel Private Limited		421,244		752		—		—		—		31
Others (*5)		867,334		14,474		223,393		113,769		212,539		129,506
		11,680,733		268,980		2,180,042		895,892		608,109		399,389
Associates and joint ventures
SeAH Changwon Integrated Special Steel (*4)		6,042		—		3,802		—		419		—
POSCO PLANTEC Co., Ltd. (*4)		147		14		1,017		82,338		3,513		4,676
SNNC		4,673		594		422,420		—		—		—
POSCO-SAMSUNG-Slovakia Processing center		26,379		—		—		—		—		—
Others (*6,7)		28,841		40,600		51,855		—		—		—
		66,082		41,208		479,094		82,338		3,932		4,676
	￦	11,746,815		310,188		2,659,136		978,230		612,041		404,065

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*4) During the year ended December 31, 2015, it was reclassified from a subsidiary to an associate.

(*5) During the year ended December 31, 2015, the Company borrowed USD 17.42 million from POSCO-Uruguay S.A., a subsidiary of the Company, and the entire amount was repaid as of December 31, 2015.

(*6) During the year ended December 31, 2015, the Company lent USD 60 million to CSP-Compania Siderurgica do Pecem, an associate of the Company, and the entire amount of loan was collected as of December 31, 2015.

(*7) The Company has collected loans of USD 3.85 million from LLP POSUK Titanium, an associate of the Company for the year ended December 31, 2015

2) For the year ended December 31, 2016

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	29,511		16,661		8		183,768		—		24,511
POSCO Processing & Service		1,212,220		5,778		549,803		2,896		22,704		2,445
POSCO COATED & COLOR STEEL Co., Ltd.		326,078		2,560		—		—		12,232		126
POSCO ICT (*3)		1,224		727		—		219,301		32,456		171,107
eNtoB Corporation		—		5		278,016		9,836		212		19,436
POSCO CHEMTECH		319,164		33,784		502,448		14,847		290,427		5,139
POSCO ENERGY CO., LTD.		187,311		1,382		—		—		—		7
POSCO TMC Co., Ltd. (*4)		219,489		—		2		—		863		1,177
POSCO AST (*4)		152,098		1		—		—		19,695		922
POSCO DAEWOO Corporation		3,227,716		34,341		92,203		—		343		—
POSCO Thainox Public Company Limited		237,471		2,915		9,593		—		19		548
POSCO America Corporation		469,543		—		284		—		—		1,103
POSCO Canada Ltd.		275		—		148,528		—		—		—
POSCO Asia Co., Ltd.		1,758,080		1,373		403,174		247		939		3,602
Qingdao Pohang Stainless Steel Co., Ltd.		135,405		—		—		—		—		525
POSCO JAPAN Co., Ltd.		1,112,489		128		23,217		3,744		345		3,841
POSCO-VIETNAM Co., Ltd.		226,063		445		—		—		—		—
POSCO MEXICO S.A. DE C.V.		274,210		462		—		—		—		—
POSCO Maharashtra Steel Private Limited		355,829		2,613		—		—		—		93
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		149,911		—		—		—		—		—
Others		766,263		22,717		207,601		62,202		212,344		145,562
		11,160,350		125,892		2,214,877		496,841		592,579		380,144
Associates and joint ventures
SeAH Changwon Integrated Special Steel		28		—		1,095		—		627		—
POSCO PLANTEC Co., Ltd.		2,245		48		3,533		244,898		16,812		8,146
SNNC		6,004		1,042		487,395		—		—		2
POSCO-SAMSUNG-Slovakia Processing center		44,686		—		—		—		—		—
KOBRASCO		—		29,297		—		—		—		—
Others		26,625		13,122		175,246		—		—		—
		79,588		43,509		667,269		244,898		17,439		8,148
	￦	11,239,938		169,401		2,882,146		741,739		610,018		388,292

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*4) During the year ended December 31, 2016, it was merged into POSCO Processing & Service.

3) For the year ended December 31, 2017

	Sales and others (*1)				Purchase and others (*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
	(in millions of Won)
Subsidiaries (*3)
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	3,328		71		—		151,639		32		18,352
POSCO Processing & Service		298,781		1		113,628		4,595		8,309		404
POSCO COATED & COLOR STEEL Co., Ltd.		417,369		3,533		—		—		8,483		106
POSCO ICT (*4)		1,697		5,097		—		315,748		29,773		183,226
eNtoB Corporation		1		30		330,921		8,215		139		26,023
POSCO CHEMTECH		359,862		33,076		479,896		23,043		296,296		6,860
POSCO ENERGY CO., LTD.		179,966		1,456		—		—		—		2
POSCO DAEWOO Corporation		5,214,127		35,182		550,258		221		44,108		1,948
POSCO Thainox Public Company Limited		218,005		9,780		10,168		—		—		—
POSCO America Corporation		345,225		—		90		—		—		1,776
POSCO Canada Ltd.		439		690		278,915		—		—		—
POSCO Asia Co., Ltd.		1,949,354		1,454		365,025		337		1,625		4,982
Qingdao Pohang Stainless Steel Co., Ltd.		161,803		—		—		—		—		176
POSCO JAPAN Co., Ltd.		1,436,159		20		26,256		621		—		44,829
POSCO-VIETNAM Co., Ltd.		212,883		—		—		—		—		7
POSCO MEXICO S.A. DE C.V.		276,387		—		—		—		—		1,749
POSCO Maharashtra Steel Private Limited		467,206		—		—		—		—		65
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		192,467		—		—		—		—		—
Others		932,048		10,073		262,828		25,270		240,687		118,665
		12,667,107		100,463		2,417,985		529,689		629,452		409,170
Associates and joint ventures (*3)
POSCO PLANTEC Co., Ltd.		2,947		112		5,487		300,041		20,718		19,763
SNNC		6,734		712		554,151		—		—		4
POSCO-SAMSUNG-Slovakia Processing Center		52,779		—		—		—		—		—
Roy Hill Holdings Pty Ltd		—		—		697,096		—		—		—
CSP — Compania Siderurgica do Pecem		7,384		—		159,501		—		—		—
Others		14,943		52,583		79,103		—		—		3
		84,787		53,407		1,495,338		300,041		20,718		19,770
	￦	12,751,894		153,870		3,913,323		829,730		650,170		428,940

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

(*2) Purchases and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3) As of December 31, 2017, the Company provided guarantees to related parties (Note 38).

(*4) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

Related Account Balances With Related Parties

(b) The related account balances of significant transactions between the controlling company and related companies as of December 31, 2016 and 2017 are as follows:

1) December 31, 2016

	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Trade accounts and notes payable		Accounts payable		Others		Total
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	3		3,359		3,362		—		9,825		515		10,340
POSCO Processing & Service		207,744		178		207,922		1,085		5,367		5,184		11,636
POSCO COATED & COLOR STEEL Co., Ltd.		48,716		324		49,040		—		5		1,600		1,605
POSCO ICT		—		128		128		1,062		89,382		6,074		96,518
eNtoB Corporation		—		—		—		9,948		29,310		15		39,273
POSCO CHEMTECH		27,253		3,868		31,121		54,702		11,870		19,282		85,854
POSCO ENERGY CO., LTD.		18,701		2,012		20,713		—		—		1,425		1,425
POSCO DAEWOO Corporation		182,700		11,184		193,884		460		183		49		692
POSCO Thainox Public Company Limited		62,034		8		62,042		—		224		—		224
POSCO America Corporation		10,008		—		10,008		—		—		—		—
POSCO Asia Co., Ltd.		375,823		458		376,281		25,101		—		—		25,101
Qingdao Pohang Stainless Steel Co., Ltd.		25,386		—		25,386		—		5		—		5
POSCO MEXICO S.A. DE C.V.		114,166		1,024		115,190		—		—		—		—
POSCO Maharashtra Steel Private Limited		208,737		9,923		218,660		—		—		—		—
Others		333,031		64,526		397,557		17,374		46,455		26,974		90,803
		1,614,302		96,992		1,711,294		109,732		192,626		61,118		363,476
Associates and joint ventures
POSCO PLANTEC Co., Ltd.		30		9		39		2,125		39,647		—		41,772
SNNC		223		26		249		40,201		—		—		40,201
Others		800		1		801		991		17,685		—		18,676
		1,053		36		1,089		43,317		57,332		—		100,649
	￦	1,615,355		97,028		1,712,383		153,049		249,958		61,118		464,125

2) December 31, 2017

	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Trade accounts and notes payable		Accounts payable		Others		Total
	(in millions of Won)
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	￦	2		2,908		2,910		—		21,965		674		22,639
POSCO COATED & COLOR STEEL Co., Ltd.		58,184		324		58,508		—		5		504		509
POSCO ICT		55		217		272		1,458		72,586		27,009		101,053
eNtoB Corporation		—		—		—		12,252		31,899		20		44,171
POSCO CHEMTECH		61,810		3,589		65,399		51,774		20,313		17,568		89,655
POSCO ENERGY CO., LTD.		33,239		1,673		34,912		—		—		1,425		1,425
POSCO DAEWOO Corporation		483,915		12,739		496,654		10,213		2,145		5,794		18,152
POSCO Thainox Public Company Limited		57,826		—		57,826		1,204		—		—		1,204
POSCO America Corporation		5,365		—		5,365		—		—		—		—
POSCO Asia Co., Ltd.		404,857		541		405,398		9,811		24		—		9,835
Qingdao Pohang Stainless Steel Co., Ltd.		31,693		—		31,693		—		—		—		—
POSCO MEXICO S.A. DE C.V.		55,695		530		56,225		—		—		—		—
POSCO Maharashtra Steel Private Limited		392,630		5,733		398,363		—		—		—		—
Others		384,385		49,403		433,788		15,038		59,575		31,118		105,731
		1,969,656		77,657		2,047,313		101,750		208,512		84,112		394,374
Associates and joint ventures
POSCO PLANTEC Co., Ltd.		1,946		9		1,955		3,842		15,723		—		19,565
SNNC		648		61		709		49,506		3		—		49,509
Others		8,350		904		9,254		824		—		—		824
		10,944		974		11,918		54,172		15,726		—		69,898
	￦	1,980,600		78,631		2,059,231		155,922		224,238		84,112		464,272

Company, excluding the controlling company [member]

Significant Transactions With Related Parties

(c) Significant transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2015, 2016 and 2017 were as follows:

1) December 31, 2015

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
SeAH Changwon integrated Special Steel	￦	32,802		—		49,862		1,977
POSCO PLANTEC Co., Ltd.		10,543		—		5,953		6,386
New Songdo International City Development, LLC		420,094		—		—		667
SNNC		32,160		44		6,518		53,260
Posco e&c Songdo International Building		6,278		—		—		25,197
VSC POSCO Steel Corporation		37,416		—		2,395		3
USS-POSCO Industries		353,626		—		1,109		—
CSP — Compania Siderurgica do Pecem		845,979		—		—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		68,300		111		70,236		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		3		—		23,320		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		9,668		—		—		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		30,310		—		4		—
Zhangjiagang Pohang Refractories Co., Ltd.		970		1,248		17,484		2,023
Sebang Steel		—		—		29,007		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		214,521		—		3,960		3,190
DMSA/AMSA		800		9,322		241,074		—
South-East Asia Gas Pipeline Company Ltd.		—		47,556		—		—
Others		415,217		17,793		18,518		2,683
	￦	2,478,687		76,074		469,440		95,386

2) December 31, 2016

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
SeAH Changwon integrated Special Steel	￦	16,294		—		22,029		—
POSCO PLANTEC Co., Ltd.		21,659		5		3,335		5,912
New Songdo International City Development, LLC		226,042		—		—		14
SNNC		29,330		—		21,479		9,494
Posco e&c Songdo International Building		4,245		—		—		16,219
Chun-cheon Energy Co., Ltd		288,307		—		—		—
Noeul Green Energy		107,268		—		—		—
Incheon-Gimpo Expressway Co., Ltd.		102,183		—		—		—
VSC POSCO Steel Corporation		43,650		47		479		—
USS-POSCO Industries		287,072		—		1,195		—
CSP — Compania Siderurgica do Pecem		157,814		—		—		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		61,844		—		57,179		—
LLP POSUK Titanium		—		—		14,575		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		—		24,365		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		15,759		—		—		—
PT. Batutua Tembaga Raya		—		—		13,079		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		31,711		—		65		—
Zhangjiagang Pohang Refractories Co., Ltd.		250		14		364		2,472
Sebang Steel		—		—		26,276		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		157,886		—		3,535		—
DMSA/AMSA		—		—		72,582		—
South-East Asia Gas Pipeline Company Ltd.		—		87,973		—		—
Others		195,139		11,184		16,664		1,801
	￦	1,746,453		99,223		277,201		35,912

3) December 31, 2017

	Sales and others				Purchase and others
	Sales		Others		Purchase of material		Others
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	19,513		—		98		8,113
New Songdo International City Development, LLC		223,567		13,207		—		49
SNNC		26,288		—		3,578		17,985
Chun-cheon Energy Co., Ltd		42,147		—		—		—
Noeul Green Energy		11,863		—		—		2,178
VSC POSCO Steel Corporation		19,404		—		188		—
USS-POSCO Industries		26,899		107		2,222		—
CSP — Compania Siderurgica do Pecem		241,299		—		101,018		21,154
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		38,484		—		47,241		—
LLP POSUK Titanium		—		—		3,972		—
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		4		—		20,145		—
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd		20,004		—		—		—
PT. Batutua Tembaga Raya		—		—		21,024		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		34,088		—		192		—
Zhangjiagang Pohang Refractories Co., Ltd.		—		—		87		1,632
Sebang Steel		441		—		23,778		—
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.		43,764		—		—		—
DMSA/AMSA		—		99		47,092		—
South-East Asia Gas Pipeline Company Ltd.		—		62,423		—		—
Others		272,107		43,126		19,520		19,483
	￦	1,019,872		118,962		290,155		70,594

Related Account Balances With Related Parties

(d) The related account balances of significant transactions between the Company, excluding the controlling company, and related companies as of December 31, 2016 and December 31, 2017 are as follows:

1) December 31, 2016

	Receivables (*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	4,709		—		6		4,715		2,718		8,521		11,239
New Songdo International City Development, LLC		255,822		—		5,725		261,547		—		—		—
Chun-cheon Energy Co., Ltd		12,142		—		—		12,142		—		3,171		3,171
VSC POSCO Steel Corporation		5,265		—		—		5,265		—		—		—
USS-POSCO Industries		583		—		—		583		75		—		75
Nickel Mining Company SAS		133		60,425		116		60,674		—		—		—
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.		62,814		60,425		1,643		124,882		—		875		875
CSP — Compania Siderurgica do Pecem		224,760		—		149,700		374,460		—		109,272		109,272
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		3,279		6,647		6		9,932		1,365		—		1,365
PT. Batutua Tembaga Raya		—		38,120		—		38,120		2,293		—		2,293
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		9,292		8,460		43		17,795		40		—		40
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO.,LTD.		100,367		—		—		100,367		—		—		—
DMSA/AMSA		—		90,638		—		90,638		—		—		—
South-East Asia Gas Pipeline Company Ltd.		—		276,605		48		276,653		—		—		—
Others		184,402		142,812		6,593		333,807		4,615		750		5,365
	￦	863,568		684,132		163,880		1,711,580		11,106		122,589		133,695

(*1) As of December 31, 2016, the Company recognizes bad debt allowance for receivables amounting to ￦48,891 million.

2) December 31, 2017

	Receivables (*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
	(in millions of Won)
Associates and joint ventures
POSCO PLANTEC Co., Ltd.	￦	2,287		—		5		2,292		3,442		5,595		9,037
New Songdo International City Development, LLC		484,038		282,775		1,696		768,509		—		7,146		7,146
Chun-cheon Energy Co., Ltd		—		—		21		21		—		9,617		9,617
VSC POSCO Steel Corporation		16		—		—		16		17		—		17
USS-POSCO Industries		—		—		4		4		—		—		—
Nickel Mining Company SAS		—		59,668		118		59,786		—		—		—
CSP — Compania Siderurgica do Pecem		380,180		—		13,443		393,623		—		29,700		29,700
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		2,108		5,357		6		7,471		2,449		—		2,449
PT. Batutua Tembaga Raya		24		29,048		—		29,072		—		—		—
POSCO SeAH Steel Wire(Nantong) Co., Ltd.		8,067		5,357		32		13,456		107		—		107
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO.,LTD.		715		—		—		715		—		526		526
DMSA/AMSA		—		69,713		4,443		74,156		—		—		—
South-East Asia Gas Pipeline Company Ltd.		—		229,880		—		229,880		—		—		—
Others		134,397		134,506		6,885		275,788		1,856		2,005		3,861
	￦	1,011,832		816,304		26,653		1,854,789		7,871		54,589		62,460

(*1) As of December 31, 2017, the Company recognizes bad debt allowance for receivables amounting to ￦4,217 million.

XML

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Contingent liabilities on outstanding guarantees [member]

Summary of Contingent Liabilities

Contingent liabilities on outstanding guarantees provided by the Company as of December 31, 2017 are as follows:

			Guarantee limit				Guarantee amount
Guarantors	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	(in millions of Won)
[The Company]
POSCO	POSCO Asia Co., Ltd.	BOC	USD	50,000,000		53,570		50,000,000		53,570
	POSCO ASSAN TST STEEL INDUSTRY	SMBC and others	USD	146,527,500		156,990		131,874,750		141,291
	POSCO COATED STEEL (THAILAND) CO., LTD.	The Great&CO Co.,Ltd (SPC)	THB	5,501,000,000		180,268		5,501,000,000		180,268
	POSCO Maharashtra Steel Private Limited	Export-Import Bank of Korea and others	USD	649,853,000		696,252		323,918,500		347,045
	POSCO MEXICO S.A. DE C.V.	BOA and others	USD	160,000,000		171,424		160,000,000		171,424
	POSCO SS-VINA CO., LTD.	Export-Import Bank of Korea and others	USD	354,351,050		379,652		314,599,225		337,062
	POSCO VST CO., LTD.	ANZ and others	USD	65,000,000		69,641		8,125,000		8,706
	POSCO-VIETNAM Co., Ltd.	Export-Import Bank of Korea	USD	196,000,000		209,994		196,000,000		209,994
	PT. KRAKATAU POSCO	Export-Import Bank of Korea and others	USD	1,350,300,000		1,446,711		1,187,394,785		1,272,174
	Zhangjiagang Pohang Stainless Steel Co., Ltd.	BTMU and others	CNY	760,500,000		124,456		684,450,000		112,011
POSCO DAEWOO Corporation	Daewoo Global Development. Pte., Ltd	Export-Import Bank of Korea	USD	21,633,300		23,178		21,633,300		23,178
		MIRAE ASSET DAEWOO CO.,LTD.	KRW	29,137		29,137		10,703		10,703
	Daewoo Power PNG Ltd.	Export-Import Bank of Korea	USD	54,400,000		58,284		54,400,000		58,284
	Daewoo Textile LLC	Export-Import Bank of Korea	USD	4,000,000		4,286		4,000,000		4,286
	POSCO ASSAN TST STEEL INDUSTRY	ING and others	USD	14,652,750		15,699		14,652,750		15,699
	POSCO DAEWOO INDIA PVT., LTD.	Shinhan Bank and others	USD	162,400,000		173,995		51,237,684		54,896
		SC Bank and others	INR	7,350,000,000		122,892		2,037,278,075		34,063
	PT. Bio Inti Agrindo	Export-Import Bank of Korea and others	USD	120,875,000		129,505		120,875,000		129,505
	Songdo Posco family Housing	SAMSUNG SECURITIES CO.,LTD and others	KRW	70,000		70,000		49,500		49,500
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	POSCO E&C Vietnam Co., Ltd.	Export-Import Bank of Korea	USD	30,000,000		32,142		30,000,000		32,142
	HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Woori Bank and others	USD	138,000,000		147,853		138,000,000		147,853
	POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	HSBC	USD	100,000,000		107,140		100,000,000		107,140
	POSCO ENGINEERING (THAILAND) CO., LTD.	POSCO Asia Co., Ltd	USD	39,451,000		42,268		39,451,000		42,268
	POSCO Engineering and Construction India Private Limited	Woori Bank	USD	2,100,000		2,250		2,100,000		2,250
	PT PEN INDONESIA	POSCO Asia Co., Ltd.	USD	5,000,000		5,357		5,000,000		5,357
	PT. POSCO E&C INDONESIA	BNP Indonesia	IDR	79,000,000,000		6,241		79,000,000,000		6,241
	Songdo Posco family Housing	SAMSUNG SECURITIES CO.,LTD and others	KRW	70,000		70,000		49,500		49,500
	Daewoo Global Development. Pte., Ltd	POSCO Asia Co., Ltd. and others	USD	68,719,200		73,626		59,088,100		63,307
POSCO ICT	PT.POSCO ICT INDONESIA	POSCO Asia Co., Ltd.	USD	1,500,000		1,607		1,500,000		1,607
POSCO CHEMTECH	PT.Krakatau Posco Chemtech Calcination	Hana Bank	USD	33,600,000		35,999		20,705,882		22,184
POSCO COATED & COLOR STEEL Co., Ltd.	Myanmar POSCO C&C Company, Limited.	POSCO Asia Co., Ltd. and others	USD	13,986,947		14,985		13,986,947		14,985
POSCO ENERGY CO., LTD.	PT. KRAKATAU POSCO ENERGY	Export-Import Bank of Korea and others	USD	193,900,000		207,744		137,396,174		147,206
POSCO Asia Co., Ltd.	POSCO ASSAN TST STEEL INDUSTRY	SMBC	USD	25,000,000		26,785		25,000,000		26,785
[Associates and joint ventures]
POSCO	CSP — Compania Siderurgica do Pecem	Export-Import Bank of Korea and others	USD	420,000,000		449,990		420,000,000		449,990
		BNDES	BRL	464,060,000		150,100		464,060,000		150,100
	LLP POSUK Titanium	SMBC	USD	15,000,000		16,071		15,000,000		16,071
	Nickel Mining Company SAS	SMBC	EUR	46,000,000		58,846		37,000,000		47,332
POSCO DAEWOO Corporation	GLOBAL KOMSCO Daewoo LLC	Industrial & Commercial Bank of China	USD	8,225,000		8,812		8,225,000		8,812
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	New Songdo International City Development, LLC	Others	KRW	340,000		340,000		317,900		317,900
	UITrans LRT Co., Ltd.	Kookmin Bank and others	KRW	20,740		20,740		20,740		20,740
	Chun-cheon Energy Co., Ltd	Kookmin Bank and others	KRW	11,600		11,600		10,993		10,993
POSCO ICT	Incheon-Gimpo Expressway co., Ltd.	Korea Development Bank	KRW	100,000		100,000		100,000		100,000
	UITrans LRT Co., Ltd.	Kookmin Bank	KRW	76,000		76,000		76,000		76,000
POSCO CHEMTECH	KRAKATAU POS-CHEM DONG-SUH CHEMICAL	Hana Bank	USD	1,140,000		1,221		1,140,000		1,221
POSCO(Suzhou) Automotive Processing Center Co.,Ltd.	POS-InfraAuto (Suzhou) Co., Ltd	Korea Development Bank	USD	780,000		836		780,000		836
[Others]
POSCO DAEWOO Corporation	Ambatovy Project Investments Limited and others	Export-Import Bank of Korea	USD	87,272,727		93,504		28,325,258		30,348
POSCO ENGINEERING & CONSTRUCTION CO., LTD.	Ecocity CO.,LTD and others	Others	KRW	960,011		960,011		446,098		446,098
	AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD.	POSCO Asia Co., Ltd. and others	USD	150,000,000		160,710		150,000,000		160,710
POSCO ICT	SMS Energy and others	Hana Bank and others	KRW	104,880		104,880		73,676		73,676
	Hyochun CO., LTD	Daegu Bank and others	KRW	39,575		39,575		39,575		39,575
	BLT Enterprise and others	Kyobo Life Insurance Co.,Ltd and others	KRW	1,163,585		1,163,585		1,163,585		1,163,585
POSCO AUSTRALIA PTY LTD	Department of Trade and Investment(NSW Government)	Woori Bank and others	AUD	25,260,721		21,097		25,260,721		21,097
			USD	4,683,667,474		5,018,081		3,834,409,355		4,108,186
			KRW	2,985,528		2,985,528		2,358,270		2,358,270
			CNY	760,500,000		124,456		684,450,000		112,011
			INR	7,350,000,000		122,892		2,037,278,075		34,063
			IDR	79,000,000,000		6,241		79,000,000,000		6,241
			THB	5,501,000,000		180,268		5,501,000,000		180,268
			EUR	46,000,000		58,846		37,000,000		47,332
			AUD	25,260,721		21,097		25,260,721		21,097
			BRL	464,060,000		150,100		464,060,000		150,100

Litigations in progress [Member]

Summary of Contingent Liabilities

As of December 31, 2017, litigations in progress that POSCO and certain subsidiaries are defendants in legal actions arising from the normal course of business are as follows:

Company	Legal actions		Claim amount		Korean Won equivalent		Description
	(In millions of Won, in thousands of foreign currencies)
POSCO		15	KRW	23,037		23,037	Lawsuit on claim for employee right and others(*1)
		1	USD	1,583		1,696	Arbitration on trading and others
POSCO DAEWOO Corporation		2	EUR	2,747		3,514	Lawsuit on claim for damages and others
		3	INR	4,518,694		75,553	Lawsuit on claim for payment on guarantees and others(*1)
		10	KRW	9,903		9,903	Lawsuit on claim for payment and others
		3	USD	22,228		23,815	Lawsuit on claim for damages and others(*1)
		1	PKR	124,775		1,208	Lawsuit on claim for damages
		1	CAD	79,000		67,363	Lawsuit on claim for damages
POSCO ENGINEERING & CONSTRUCTION CO., LTD.		104	KRW	461,134		461,134	Arbitration on construction costs allocation and others
POSCO ICT		13	KRW	9,894		9,894	Lawsuit on claim for payment and others
POSCO A&C		3	KRW	3,985		3,985	Lawsuit on claim for payment on construction
POSCO ENERGY CO., LTD.		4	KRW	7,017		7,017	Lawsuit on claim for damages and revocation of electricity supply contract and others
POSCO E&C CHINA CO., LTD.		11	CNY	13,679		2,239	Lawsuit on claim for payment of reserve for construction warranty and others
		1	KRW	3,305		3,305	Lawsuit on claim for payment on construction
Posco e&c Songdo International Building		3	KRW	892		892	Lawsuit on affirmation of the non-existence of general meeting of stockholders and others
POSPOWER CO., Ltd.		1	KRW	1,000		1,000	Lawsuit on claim for damages
POSCO ENGINEERING(THAILAND) CO., LTD.		7	THB	724,400		23,739	Lawsuit on claim for payment on construction
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S		6	TRY	31		9	Lawsuit on claim for unfair dismissal and others
PT. KRAKATAU POSCO		1	IDR	324,858,033		25,664	Lawsuit on claim for payment on construction
POSCO(Dalian)IT Center Development Co., Ltd.		2	CNY	423		69	Lawsuit over contract dispute dealing apartment
Brazil Sao Paulo Steel Processing Center		3	BRL	12,167		3,935	Lawsuit on claim for payment on construction and others
POSCO ENGINEERING &CONSTRUCTION DO BRAZIL LTDA.		184	BRL	121,058		39,156	Lawsuit on claim for damages and others(*1)
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.		1	KRW	3,305		3,305	Lawsuit on claim for payment on construction
POSCO India Chennai Steel Processing Center Pvt.Ltd.		6	USD	8,409		9,009	Lawsuit on custom duty and others

(*1) The Company made a reliable estimate in 163 lawsuits by considering the possibility and amount of outflow of resources and recognized ￦27,963 million as provision for legal contingencies and claims.

XML

Additional Information of Cash Flow Statements (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Changes in Operating Assets and Liabilities

(a) Changes in operating assets and liabilities for the years ended December 31, 2015, 2016 and 2017 were as follows:

	2015			2016			2017
	(in millions of Won)
Trade accounts and notes receivable	￦	1,586,113			273,419			63,075
Other receivables		259,741			191,591			113,740
Inventories		2,456,068			(889,998	)		(1,435,170	)
Other current assets		42,131			(287,377	)		110,688
Other non-current assets		72,826			33,584			12,455
Trade accounts and notes payable		(894,129	)		769,337			(607,999	)
Other payables		39,811			(179,174	)		(26,922	)
Other current liabilities		(457,947	)		2,490			338,273
Provisions		(119,172	)		(124,884	)		(145,763	)
Payments of severance benefits		(157,983	)		(278,278	)		(185,220	)
Plan assets		(115,274	)		(138,854	)		3,815
Other non-current liabilities		72,267			223,574			(82,605	)
	￦	2,784,452			(404,570	)		(1,841,633	)

Changes in Liabilities Arising from Financial Activities

(b) Changes in liabilities arising from financial activities for the year ended December 31, 2017 were as follows:

	Liabilities												Derivatives held to hedge borrowings
	Short-term borrowings			long-term borrowings			Dividend payable			Finance lease liabilities
	(in millions of Won)
Beginning	￦	7,979,727			14,725,271			7,770			114,409			(52,373	)
Changes from financing cash flows		558,083			(1,410,033	)		(931,232	)		(10,536	)		—
Changes arising from obtaining or losing control of subsidiaries or other business		(12,469	)		3,299			—			—			—
The effect of changes in foreign exchange rates		(350,523	)		(435,170	)		—			(10,855	)		—
Changes in fair values		—			—			—			—			171,693
Other changes:
Decrease in retained earnings		—			—			863,579			—			—
Decrease in non-controlling interests		—			—			67,096			—			—
Amortization of discount on debentures issued		—			5,472			—			—			—
Ending	￦	8,174,818			12,888,839			7,213			93,018			119,320

XML

Operating Segments and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Information about Reportable Segments

(b) Information about reportable segments as of and for the years ended December 31, 2015, 2016 and 2017 was as follows:

1) As of and for the year ended December 31, 2015

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	28,292,824			18,315,487			8,515,780			3,068,254			58,192,345
Internal revenues		16,543,951			8,692,020			1,352,067			2,691,361			29,279,399
Including inter segment revenue		9,146,808			4,480,744			1,090,193			2,571,219			17,288,964
Total revenues		44,836,775			27,007,507			9,867,847			5,759,615			87,471,744
Interest income		139,821			55,630			27,134			16,173			238,758
Interest expenses		(560,767	)		(76,672	)		(91,742	)		(141,095	)		(870,276	)
Depreciation and amortization		(2,782,680	)		(166,814	)		(50,605	)		(282,817	)		(3,282,916	)
Impairment loss on property, plant and equipment and others		(243,828	)		(17,281	)		(28,345	)		(22,979	)		(312,433	)
Impairment loss on available-for-sale financial assets		(151,503	)		(1,410	)		(47,616	)		(40,261	)		(240,790	)
Share of profit or loss of investment in associates and JVs		(562,133	)		(212,535	)		(25,223	)		(22,618	)		(822,509	)
Income tax expense		(390,000	)		(4,772	)		(30,615	)		(18,718	)		(444,105	)
Segment profit (loss)		181,495			38,843			(275,651	)		(65,570	)		(120,883	)
Segment assets		70,102,972			12,160,406			9,997,683			10,962,594			103,223,655
Investment in associates		17,457,391			1,097,971			1,076,024			1,186,307			20,817,693
Acquisition of non-current assets		2,102,674			303,753			276,863			345,971			3,029,261
Segment liabilities		21,078,613			8,953,410			5,716,550			6,472,925			42,221,498

2) As of and for the year ended December 31, 2016

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	26,844,154			16,774,078			6,768,348			2,696,933			53,083,513
Internal revenues		16,062,016			9,646,026			713,703			2,379,945			28,801,690
Including inter segment revenue		8,992,783			5,296,847			557,526			2,285,128			17,132,284
Total revenues		42,906,170			26,420,104			7,482,051			5,076,878			81,885,203
Interest income		126,210			40,424			65,256			13,564			245,454
Interest expenses		(459,345	)		(70,841	)		(102,292	)		(126,523	)		(759,001	)
Depreciation and amortization		(2,788,535	)		(165,863	)		(57,719	)		(264,299	)		(3,276,416	)
Impairment loss on property, plant and equipment and others		(99,165	)		(45,995	)		(9,426	)		(88,696	)		(243,282	)
Impairment loss on available-for-sale financial assets		(225,225	)		(28,988	)		(35,331	)		(24,902	)		(314,446	)
Share of profit or loss of investment in associates and JVs		(211,084	)		(53,586	)		(283,833	)		(6,369	)		(554,872	)
Income tax expense		(495,874	)		(18,629	)		107,520			(56,026	)		(463,009	)
Segment profit (loss)		1,511,383			53,244			(1,403,712	)		(25,889	)		135,026
Segment assets		69,914,939			13,580,179			9,501,046			8,529,600			101,525,764
Investment in associates		16,109,360			1,100,973			795,445			1,200,295			19,206,073
Acquisition of non-current assets		2,334,842			249,597			25,533			191,715			2,801,687
Segment liabilities		20,292,764			10,134,170			6,780,380			4,709,689			41,917,003

3) As of and for the year ended December 31, 2017

	Steel			Trading			Construction			Others			Total
	(in millions of Won)
External revenues	￦	30,230,368			20,802,207			6,886,606			2,735,919			60,655,100
Internal revenues		17,381,010			14,075,996			398,924			2,548,674			34,404,604
Including inter segment revenue		12,004,614			8,043,643			329,215			2,446,029			22,823,501
Total revenues		47,611,378			34,878,203			7,285,530			5,284,593			95,059,704
Interest income		128,827			32,799			100,922			17,940			280,488
Interest expenses		(422,357	)		(121,967	)		(112,983	)		(100,656	)		(757,963	)
Depreciation and amortization		(2,856,133	)		(206,490	)		(42,123	)		(255,620	)		(3,360,366	)
Impairment loss on property, plant and equipment and others		(149,840	)		(140,839	)		(37,476	)		(8,564	)		(336,719	)
Impairment loss on available-for-sale financial assets		(95,261	)		—			(18,637	)		(13,421	)		(127,319	)
Share of profit or loss of investment in associates and JVs		8,352			—			(8,555	)		(1,518	)		(1,721	)
Income tax expense		(977,853	)		(109,710	)		(109,961	)		(77,172	)		(1,274,696	)
Segment profit (loss)		2,790,855			112,661			24,545			232,700			3,160,761
Segment assets		70,017,816			14,139,098			8,609,753			8,776,090			101,542,757
Investment in associates		16,116,654			1,134,798			668,392			1,193,895			19,113,739
Acquisition of non-current assets		2,033,184			286,185			99,190			251,665			2,670,224
Segment liabilities		19,057,249			10,386,294			5,744,693			4,620,902			39,809,138

Reconciliation of Segment Revenues, Profit or Loss, Assets and Liabilities and Other Significant Items

(c) Reconciliations of total segment revenues, profit or loss, assets and liabilities, and other significant items to their respective consolidated financial statement line items are as follows:

1) Revenues

	2015			2016			2017
	(in millions of Won)
Total revenue for reportable segments	￦	87,471,744			81,885,203			95,059,704
Elimination of inter-segment revenue		(29,279,399	)		(28,801,690	)		(34,404,604	)
Basis difference (*2)		329,923			(143,742	)		(468,233	)
	￦	58,522,268			52,939,771			60,186,867

2) Profit

	2015			2016			2017
	(in millions of Won)
Total profit (loss) for reportable segments	￦	(120,883	)		135,026			3,160,761
Goodwill and corporate FV adjustments		(95,150	)		(123,110	)		(84,370	)
Elimination of inter-segment profits		119,852			1,036,253			(102,922	)
Income tax expense		276,939			384,685			1,206,223
Basis difference (*2)		(30,413	)		(21,245	)		(84,641	)
Profit before income tax expense	￦	150,345			1,411,609			4,095,051

3) Assets

	2016			2017
	(in millions of Won)
Total assets for reportable segments (*1)	￦	101,525,764			101,542,757
Equity-accounted investees		(15,322,271	)		(15,555,972	)
Goodwill and corporate FV adjustments		3,750,915			3,368,333
Elimination of inter-segment assets		(10,191,413	)		(10,330,159	)
Basis difference (*2)		374,619			760,670
	￦	80,137,614			79,785,629

(*1) As segment assets and liabilities are determined based on separate financial statements, for subsidiaries which are in a different segment from that of its immediate parent company, their carrying amount in separate financial statements is eliminated upon consolidation. In addition, adjustments are made to adjust the amount of investment in associates and joint ventures from the amount reflected in segment assets to that determined using equity method in consolidated financial statements.

4) Liabilities

	2016			2017
	(in millions of Won)
Total liabilities for reportable segments	￦	41,917,003			39,809,138
Corporate FV adjustments		442,178			483,693
Elimination of inter-segment liabilities		(8,434,580	)		(8,731,880	)
Basis difference (*2)		447,744			897,953
	￦	34,372,345			32,458,904

5) Other significant items

a) December 31, 2015

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	238,758			—			(28,565	)		—		210,193
Interest expenses		(870,276	)		1,282			80,222			—		(788,772	)
Depreciation and amortization		(3,282,916	)		(117,595	)		182,265			—		(3,218,246	)
Share of profit or loss of investment in associates		(822,509	)		—			316,455			—		(506,054	)
Income tax expense		(444,105	)		24,294			142,872			10,379		(266,560	)
Impairment loss on property, plant and equipment and others		(312,433	)		—			(142,234	)		—		(454,667	)
Impairment loss on available-for-sale financial assets		(240,790	)		—			98,009			—		(142,781	)
	￦	(5,734,271	)		(92,019	)		649,024			10,379		(5,166,887	)

b) December 31, 2016

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	245,454			—			(62,979	)		—		182,475
Interest expenses		(759,001	)		(807	)		101,082			—		(658,726	)
Depreciation and amortization		(3,276,416	)		(104,949	)		167,518			—		(3,213,847	)
Share of profit or loss of investment in associates		(554,872	)		(38,732	)		504,927			—		(88,677	)
Income tax expense		(463,009	)		21,945			56,379			5,141		(379,544	)
Impairment loss on property, plant and equipment and others		(243,282	)		—			(125,657	)		—		(368,939	)
Impairment loss on available-for-sale financial assets		(314,446	)		—			66,042			—		(248,404	)
	￦	(5,365,572	)		(122,543	)		707,312			5,141		(4,775,662	)

c) December 31, 2017

	Total segment			Corporate FV adjustments			Elimination of inter-segment transactions			Basis difference (*2)		Consolidated
	(in millions of Won)
Interest income	￦	280,488			—			(68,037	)		—		212,451
Interest expenses		(757,963	)		1,304			103,544			—		(653,115	)
Depreciation and amortization		(3,360,366	)		(106,195	)		169,141			—		(3,297,420	)
Share of profit or loss of investment in associates		(1,721	)		—			12,261			—		10,540
Income tax expense		(1,274,696	)		21,270			47,203			20,483		(1,185,740	)
Impairment loss on property, plant and equipment and others		(336,719	)		(867	)		34,619			—		(302,967	)
Impairment loss on available-for-sale financial assets		(127,319	)		—			4,105			—		(123,214	)
	￦	(5,578,296	)		(84,488	)		302,836			20,483		(5,339,465	)

(*2) Basis difference is related to the difference in recognizing revenue and expenses in connection with development and sale of certain residential real estate between the report reviewed by the CEO and the consolidated financial statements.

Revenue and Non-current Assets by Geographic Area

(d) Revenue by geographic area for years ended December 31, 2015, 2016 and 2017 was as follows:

	2015		2016			2017
	(in millions of Won)
Domestic	￦	39,268,907		34,883,941			38,882,220
Japan		1,934,808		1,892,022			2,200,405
China		5,756,867		5,908,046			6,731,214
Asia-other		5,888,045		5,649,843			7,750,553
North America		1,921,039		1,899,291			1,725,120
Others		3,422,679		2,850,370			3,365,588
		58,192,345		53,083,513			60,655,100
Basis difference		329,923		(143,742	)		(468,233	)
	￦	58,522,268		52,939,771			60,186,867

In presenting geographic information revenue is based on the geographical location of customers.

(e) Non-current assets by geographic area as of December 31, 2016 and 2017 are as follows:

	2016		2017
	(in millions of Won)
Domestic	￦	31,772,641		30,790,462
Japan		187,266		162,328
China		1,451,405		1,284,561
Asia-other		6,163,388		5,266,799
North America		168,800		277,249
Others		1,233,288		1,119,319
	￦	40,976,788		38,900,718

XML

General Information - Additional Information (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩) Entity Steel_Plant Office	Dec. 31, 2016 KRW (₩)	Dec. 31, 2015 KRW (₩)
Disclosure of general information [Line Items]
Number of associates and joint ventures | Entity	111
Number of operational steel plants | Steel_Plant	2
Increase in ownership interests in subsidiaries	₩ 163,707	₩ (7,894)	₩ 1,155,254
Dividends paid by subsidiaries	70,087	75,830	₩ 437,194
POSCO ENGINEERING & CONSTRUCTION., LTD., PT PEN INDONESIA and others [member]
Disclosure of general information [Line Items]
Increase in ownership interests in subsidiaries	₩ 16,288
POSCO processing &service and others [member]
Disclosure of general information [Line Items]
Increase in ownership interests in subsidiaries		₩ 8,650
Domestic [member]
Disclosure of general information [Line Items]
Number of subsidiaries | Entity	40
Foreign [member]
Disclosure of general information [Line Items]
Number of subsidiaries | Entity	139
Number of operational offices | Office	6
Korea [member]
Disclosure of general information [Line Items]
Number of operational offices | Office	1

XML

General Information - POSCO's Shareholders (Detail) - ₩ / shares	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of details of shareholders [Line Items]
Number of shares	87,186,835	87,186,835	87,186,835
Ownership (%)	100.00%
Number of shares represented by ADRs	0.25
Common share par value	₩ 5,000	₩ 5,000
National Pension Service [Member]
Disclosure of details of shareholders [Line Items]
Number of shares	9,660,885
Ownership (%)	11.08%
Nippon Steel & Sumitomo Metal Corporation [Member]
Disclosure of details of shareholders [Line Items]
Number of shares	2,894,712
Ownership (%)	3.32%
BlackRock Institutional Trust Company, N.A. [Member]
Disclosure of details of shareholders [Line Items]
Number of shares	2,483,875
Ownership (%)	2.85%
KB Financial Group Inc. and subsidiaries [Member]
Disclosure of details of shareholders [Line Items]
Number of shares	1,919,361
Ownership (%)	2.20%
Government Of Singapore Investment Corp Private Limited [Member]
Disclosure of details of shareholders [Line Items]
Number of shares	1,934,312
Ownership (%)	2.22%
Other [Member]
Disclosure of details of shareholders [Line Items]
Number of shares	68,293,690
Ownership (%)	78.33%

XML

General Information - Details of Consolidated Subsidiaries (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
POSCO COATED STEEL (THAILAND) CO., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Automotive steel sheet manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Thailand
POSCO COATED STEEL (THAILAND) CO., LTD. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Daewoo Amara Company Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate development
Ownership (%)	85.00%	98.54%
Region	Myanmar
Daewoo Amara Company Limited [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	85.00%	98.54%
Daewoo Power and Infra (PTY) Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Electricity
Ownership (%)	100.00%	100.00%
Region	South Africa
Daewoo Power and Infra (PTY) Limited [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSMATE-CHINA CO., LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Business facility maintenance
Ownership (%)	100.00%	100.00%
Region	China
POSMATE-CHINA CO., LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Daewoo Precious Resources Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Resources development
Ownership (%)	70.00%	70.00%
Region	Myanmar
Daewoo Precious Resources Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
POSCO-Mexico Villagran Wire-rod Processing Center [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	66.75%	66.75%
Region	Mexico
POSCO-Mexico Villagran Wire-rod Processing Center [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	56.75%	56.75%
POSCO-Mexico Villagran Wire-rod Processing Center [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
POSCO-CDSFC [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel structure manufacturing
Ownership (%)	100.00%	100.00%
Region	China
POSCO-CDSFC [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	50.20%	50.20%
POSCO-CDSFC [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	49.80%	49.80%
POSCO ChengDu Processing Center [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	43.00%	43.00%
Region	China
POSCO ChengDu Processing Center [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	33.00%	33.00%
POSCO ChengDu Processing Center [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
POSCO SUZHOU [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
POSCO SUZHOU [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	30.00%	30.00%
POSCO SUZHOU [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
POSCO E&C SMART S DE RL DE CV [Member]
Disclosure of subsidiaries [line items]
Principal operations	Civil engineering and construction
Ownership (%)	100.00%	100.00%
Region	Mexico
POSCO E&C SMART S DE RL DE CV [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO Philippine Manila Processing Center, Inc. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Philippines
POSCO Philippine Manila Processing Center, Inc. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO E&C HOLDINGS CO., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Holding company
Ownership (%)	100.00%	100.00%
Region	Thailand
POSCO E&C HOLDINGS CO., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO E&C (THAILAND) CO., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction and engineering
Ownership (%)	100.00%	100.00%
Region	Thailand
POSCO E&C (THAILAND) CO., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
DAEWOO POWER PNG Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Electricity production
Ownership (%)	100.00%	100.00%
Region	Papua New Guinea
DAEWOO POWER PNG Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT.Krakatau Posco Social Enterprise [Member]
Disclosure of subsidiaries [line items]
Principal operations	Social enterprise
Ownership (%)	100.00%	100.00%
Region	Indonesia
PT.Krakatau Posco Social Enterprise [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Ventanas Philippines Construction Inc [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction
Ownership (%)	100.00%	100.00%
Region	Philippines
Ventanas Philippines Construction Inc [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO E&C Mongolia [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction and engineering service
Ownership (%)	100.00%	100.00%
Region	Mongolia
POSCO E&C Mongolia [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO Gulf SFC LLC [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	97.76%	81.93%
Region	United Arab Emirates
POSCO Gulf SFC LLC [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	97.76%	81.93%
SANPU TRADING Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Raw material trading
Ownership (%)	70.00%	70.00%
Region	China
SANPU TRADING Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
Zhangjiagang BLZ Pohang International Trading [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel Intermediate trade
Ownership (%)	100.00%	100.00%
Region	China
Zhangjiagang BLZ Pohang International Trading [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO MESDC S.A. DE C.V. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Logistics & Steel sales
Ownership (%)	56.80%	56.80%
Region	Mexico
POSCO MESDC S.A. DE C.V. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	56.80%	56.80%
POSCO ICT-China [Member]
Disclosure of subsidiaries [line items]
Principal operations	IT service and DVR business
Ownership (%)	100.00%	100.00%
Region	China
POSCO ICT-China [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Pos-Sea Pte Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel Intermediate trade
Ownership (%)	100.00%	67.54%
Region	Singapore
Pos-Sea Pte Ltd [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	67.54%
POSCO Europe Steel Distribution Center [Member]
Disclosure of subsidiaries [line items]
Principal operations	Logistics & Steel sales
Ownership (%)	70.00%	70.00%
Region	Slovenia
POSCO Europe Steel Distribution Center [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	50.00%	50.00%
POSCO Europe Steel Distribution Center [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	20.00%	20.00%
POSCO ENGINEERING (THAILAND) CO., LTD. [member]
Disclosure of subsidiaries [line items]
Principal operations	Construction and engineering service
Ownership (%)	100.00%	100.00%
Region	Thailand
POSCO ENGINEERING (THAILAND) CO., LTD. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO VST Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Stainless steel sheet manufacturing and sales
Ownership (%)	95.65%	95.65%
Region	Vietnam
POSCO VST Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	95.65%	95.65%
POSCO Maharashtra Steel Private Limited [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	India
POSCO Maharashtra Steel Private Limited [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO India Chennai Steel Processing Center Pvt.Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	95.32%	100.00%
Region	India
POSCO India Chennai Steel Processing Center Pvt.Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	93.34%	100.00%
POSCO India Chennai Steel Processing Center Pvt.Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	1.98%
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Turkey
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO VNPC Co., Ltd.) [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	88.83%	70.00%
Region	Vietnam
POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO VNPC Co., Ltd.) [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	83.54%	70.00%
POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO VNPC Co., Ltd.) [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	5.29%
POSCO(Liaoning) Automotive [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
POSCO(Liaoning) Automotive [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.00%	90.00%
POSCO(Liaoning) Automotive [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
POSCO-Indonesia Jakarta Processing Center [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	85.00%	85.00%
Region	Indonesia
POSCO-Indonesia Jakarta Processing Center [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	65.00%	65.00%
POSCO-Indonesia Jakarta Processing Center [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	20.00%	20.00%
POSCO E&C VENEZUELA C.A. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Civil engineering and construction
Ownership (%)	100.00%	100.00%
Region	Venezuela
POSCO E&C VENEZUELA C.A. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT.MRI [Member]
Disclosure of subsidiaries [line items]
Principal operations	Mine development
Ownership (%)	65.00%	65.00%
Region	Indonesia
PT.MRI [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	65.00%	65.00%
POSCO TMC INDIA PRIVATE LIMITED [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	India
POSCO TMC INDIA PRIVATE LIMITED [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO-AAPC [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	97.80%	97.80%
Region	USA
POSCO-AAPC [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	97.80%	97.80%
PT PEN INDONESIA [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction
Ownership (%)	100.00%	100.00%
Region	Indonesia
PT PEN INDONESIA [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO(Yantai)Automotive Processing Center Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
POSCO(Yantai)Automotive Processing Center Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.00%	90.00%
POSCO(Yantai)Automotive Processing Center Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
POSCO India Steel Distribution Center Private Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel logistics
Ownership (%)	100.00%	100.00%
Region	India
POSCO India Steel Distribution Center Private Ltd [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO China Dalian Plate Processing Center Co, Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Plate manufacturing and sales
Ownership (%)	90.00%	90.00%
Region	China
POSCO China Dalian Plate Processing Center Co, Ltd [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	80.00%	80.00%
POSCO China Dalian Plate Processing Center Co, Ltd [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
POSCO-South Asia Company Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel sales
Ownership (%)	100.00%	100.00%
Region	Thailand
POSCO-South Asia Company Limited [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO SS-VINA Co., Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Vietnam
POSCO SS-VINA Co., Ltd [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT.POSCO ICT INDONESIA [Member]
Disclosure of subsidiaries [line items]
Principal operations	IT service and electric control engineering
Ownership (%)	66.99%	66.99%
Region	Indonesia
PT.POSCO ICT INDONESIA [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	66.99%	66.99%
POSCO NCR Coal Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Coal sales
Ownership (%)	100.00%	100.00%
Region	Canada
POSCO NCR Coal Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO WA PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Iron ore sales & mine development
Ownership (%)	100.00%	100.00%
Region	Australia
POSCO WA PTY LTD [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO Engineering and Construction - UZ [Member]
Disclosure of subsidiaries [line items]
Principal operations	Civil engineering and construction
Ownership (%)	100.00%	100.00%
Region	Uzbekistan
POSCO Engineering and Construction - UZ [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO AUSTRALIA GP PTY LIMITED [Member]
Disclosure of subsidiaries [line items]
Principal operations	Resource development
Ownership (%)	100.00%	100.00%
Region	Australia
POSCO AUSTRALIA GP PTY LIMITED [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO POWER (PNGPOM) LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Electricity production
Ownership (%)	100.00%	100.00%
Region	Papua New Guinea
POSCO DAEWOO POWER (PNGPOM) LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT. Krakatau Posco Energy [Member]
Disclosure of subsidiaries [line items]
Principal operations	Electricity production construction and operation
Ownership (%)	90.00%	90.00%
Region	Indonesia
PT. Krakatau Posco Energy [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.00%	90.00%
POSCO DAEWOO AMERICA CORP. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	USA
POSCO DAEWOO AMERICA CORP. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO DEUTSCHLAND GMBH [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Germany
POSCO DAEWOO DEUTSCHLAND GMBH [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO JAPAN Corp [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Japan
POSCO DAEWOO JAPAN Corp [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO SINGAPORE PTE LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Singapore
POSCO DAEWOO SINGAPORE PTE LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO ITALIA S.R.L. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Italy
POSCO DAEWOO ITALIA S.R.L. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO CHINA CO., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	China
POSCO DAEWOO CHINA CO., LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Daewoo Textile LLC [Member]
Disclosure of subsidiaries [line items]
Principal operations	Textile manufacturing
Ownership (%)	100.00%	100.00%
Region	Uzbekistan
Daewoo Textile LLC [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO AUSTRALIA HOLDINGS PTY. LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Resource development
Ownership (%)	100.00%	100.00%
Region	Australia
POSCO DAEWOO AUSTRALIA HOLDINGS PTY. LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO MAURITIUS LIMITED [Member]
Disclosure of subsidiaries [line items]
Principal operations	Coal development and sales
Ownership (%)	100.00%	100.00%
Region	Mauritius
POSCO MAURITIUS LIMITED [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT. KRAKATAU POSCO [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	70.00%	70.00%
Region	Indonesia
PT. KRAKATAU POSCO [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
POSCO DAEWOO MEXICO S.A. DE C.V. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Mexico
POSCO DAEWOO MEXICO S.A. DE C.V. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Zhangjiagang Pohang Stainless Steel Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Refractory materials sales & furnace maintenance
Ownership (%)	51.00%
Region	China
Zhangjiagang Pohang Stainless Steel Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	51.00%
Zhangjigang Pohang Port Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Ownership (%)	51.00%
Daewoo International Guangzhou Corp. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	China
Daewoo International Guangzhou Corp. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO MALAYSIA SDN BHD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Malaysia
POSCO DAEWOO MALAYSIA SDN BHD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT.POSCO-Indonesia Inti [Member]
Disclosure of subsidiaries [line items]
Principal operations	Mine development
Ownership (%)	99.99%	99.99%
Region	Indonesia
PT.POSCO-Indonesia Inti [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	99.99%	99.99%
POSCO DAEWOO SHANGHAI CO., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	China
POSCO DAEWOO SHANGHAI CO., LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PGSF, L.P. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in bio tech Industry
Ownership (%)	100.00%	100.00%
Region	USA
PGSF, L.P. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO DAEWOO INDIA PVT., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	India
POSCO DAEWOO INDIA PVT., LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO(Dalian) IT Center Development Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate development and investment
Ownership (%)	100.00%	100.00%
Region	China
POSCO(Dalian) IT Center Development Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
PT. POSCO E&C INDONESIA [member]
Disclosure of subsidiaries [line items]
Principal operations	Civil engineering and construction
Ownership (%)	100.00%	100.00%
Region	Indonesia
PT. POSCO E&C INDONESIA [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
HUME COAL PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Raw material manufacturing
Ownership (%)	100.00%	100.00%
Region	Australia
HUME COAL PTY LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Brazil Sao Paulo Steel Processing Center [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	76.00%	76.00%
Region	Brazil
Brazil Sao Paulo Steel Processing Center [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	76.00%	76.00%
DAESAN (CAMBODIA) Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate development and investment
Ownership (%)	100.00%	100.00%
Region	Cambodia
DAESAN (CAMBODIA) Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA. [member]
Disclosure of subsidiaries [line items]
Principal operations	Construction
Ownership (%)	100.00%	100.00%
Region	Brazil
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
POSCO ASSAN TST STEEL INDUSTRY [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	70.00%	70.00%
Region	Turkey
POSCO ASSAN TST STEEL INDUSTRY [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	60.00%	60.00%
POSCO ASSAN TST STEEL INDUSTRY [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate development and investment
Ownership (%)	100.00%	100.00%
Region	Hong Kong
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Golden Lace DAEWOO Company Limited [member]
Disclosure of subsidiaries [line items]
Principal operations	Rice processing
Ownership (%)	60.00%
Region	Myanmar
Golden Lace DAEWOO Company Limited [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	60.00%
POSCO RU Limited Liability Company [member]
Disclosure of subsidiaries [line items]
Principal operations	Trade and business development
Ownership (%)	100.00%
Region	Russia
POSCO RU Limited Liability Company [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%
POSCO DAEWOO UKRAINE LLC [member]
Disclosure of subsidiaries [line items]
Principal operations	Grain sales
Ownership (%)	100.00%
Region	Ukraine
POSCO DAEWOO UKRAINE LLC [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%
KIS Devonian Canada Corporation [member]
Disclosure of subsidiaries [line items]
Principal operations	Petroleum gas extraction
Ownership (%)	100.00%
Region	Canada
KIS Devonian Canada Corporation [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%
POSEC Hawaii, Inc. [member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate Industry
Ownership (%)		100.00%
Region	USA
POSEC Hawaii, Inc. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
POSCO India Delhi Steel Processing Center Private Limited [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)		76.40%
Region	India
POSCO India Delhi Steel Processing Center Private Limited [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		66.40%
POSCO India Delhi Steel Processing Center Private Limited [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		10.00%
USA-SRDC [member]
Disclosure of subsidiaries [line items]
Principal operations	Scrap sales
Ownership (%)		100.00%
Region	USA
USA-SRDC [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
POSCO-Vietnam Processing Center Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)		92.05%
Region	Vietnam
POSCO-Vietnam Processing Center Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		87.07%
POSCO-Vietnam Processing Center Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		4.98%
POSCO MAPC SA DE CV [member]
Disclosure of subsidiaries [line items]
Principal operations	Automotive steel sheet manufacturing and sales
Ownership (%)		100.00%
Region	Mexico
POSCO MAPC SA DE CV [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		80.00%
POSCO MAPC SA DE CV [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		20.00%
Yingkou Puxiang Trade Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Refractory quality test & import and export
Ownership (%)		100.00%
Region	China
Yingkou Puxiang Trade Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
SANTOS CMI Guatemala S.A. [member]
Disclosure of subsidiaries [line items]
Principal operations	Construction and engineering service
Ownership (%)		100.00%
Region	Guatemala
SANTOS CMI Guatemala S.A. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)		100.00%
Region	India
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
COINSA INGENIERIA Y PETROQUIMICA S.R.L [member]
Disclosure of subsidiaries [line items]
Principal operations	Construction
Ownership (%)		50.00%
Region	Bolivia
COINSA INGENIERIA Y PETROQUIMICA S.R.L [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		50.00%
POSCO Vietnam Holdings Co., LTD. [member]
Disclosure of subsidiaries [line items]
Principal operations	Holding company
Ownership (%)		100.00%
Region	Vietnam
POSCO Vietnam Holdings Co., LTD. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		79.28%
POSCO Vietnam Holdings Co., LTD. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		20.72%
Kwanika Copper Corporation [Member]
Disclosure of subsidiaries [line items]
Principal operations	Resources development
Ownership (%)		100.00%
Region	Canada
Kwanika Copper Corporation [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
Chongqing POSCO CISL Automotive Steel Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Automotive steel sheet manufacturing and sales
Ownership (%)		51.00%
Region	China
Chongqing POSCO CISL Automotive Steel Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		51.00%
POSCO YongXin Rare Earth Metal Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Magnet material manufacturing and sales
Ownership (%)		51.60%
Region	China
POSCO YongXin Rare Earth Metal Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		51.60%
PT. POSCO MTECH INDONESIA [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steelmaking materials manufacturing and sales
Ownership (%)		99.98%
Region	Indonesia
PT. POSCO MTECH INDONESIA [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		99.98%
POSCO (Zhangjiagang) STS Processing Center Co., Ltd [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)		100.00%
Region	China
POSCO (Zhangjiagang) STS Processing Center Co., Ltd [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
EPC EQUITIES LLP [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		80.00%
Region	England
EPC EQUITIES LLP [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		80.00%
SANTOS CMI CONSTRUCTION TRADING LLP [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		99.90%
Region	England
SANTOS CMI CONSTRUCTION TRADING LLP [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		99.90%
SANTOS CMI INC. USA [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		100.00%
Region	USA
SANTOS CMI INC. USA [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		99.98%
Region	Brazil
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		99.98%
SANTOS CMI PERU S.A. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		99.99%
Region	Peru
SANTOS CMI PERU S.A. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		99.99%
SANTOS CMI CONSTRUCCIONES S.A. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		100.00%
Region	Uruguay
SANTOS CMI CONSTRUCCIONES S.A. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
GENTECH INTERNATIONAL INC. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		90.00%
Region	Panama
GENTECH INTERNATIONAL INC. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		90.00%
SANTOS CMI S.A. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		80.00%
Region	Ecuador
SANTOS CMI S.A. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		80.00%
SANTOS CMI CONSTRUCCIONES DE CHILE S.A. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		99.00%
Region	Chile
SANTOS CMI CONSTRUCCIONES DE CHILE S.A. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		99.00%
COMPANIADEAUTOMATIZACION &CONTROL, GENESYS S.A. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering, procurement and construction
Ownership (%)		90.00%
Region	Ecuador
COMPANIADEAUTOMATIZACION &CONTROL, GENESYS S.A. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		90.00%
POSCO Electrical Steel India Private Limited [member]
Disclosure of subsidiaries [line items]
Principal operations	Electrical steel manufacturing and sales
Ownership (%)		100.00%
Region	India
POSCO Electrical Steel India Private Limited [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)		100.00%
POSCO Research & Technology [Member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%
Domestic [member] | POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering and construction
Ownership (%)	52.80%	52.80%
Region	Pohang
Domestic [member] | POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	52.80%	52.80%
Domestic [member] | POSCO Processing & Service [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel sales and trading
Ownership (%)	94.40%	94.40%
Region	Seoul
Domestic [member] | POSCO Processing & Service [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	93.95%	93.95%
Domestic [member] | POSCO Processing & Service [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	0.45%	0.45%
Domestic [member] | POSCO COATED & COLOR STEEL Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Coated steel manufacturing
Ownership (%)	56.87%	56.87%
Region	Pohang
Domestic [member] | POSCO COATED & COLOR STEEL Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	56.87%	56.87%
Domestic [member] | POSCO ICT [member]
Disclosure of subsidiaries [line items]
Principal operations	Computer hardware and software distribution
Ownership (%)	65.38%	65.38%
Region	Pohang
Domestic [member] | POSCO ICT [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	65.38%	65.38%
Domestic [member] | POSCO Research Institute [Member]
Disclosure of subsidiaries [line items]
Principal operations	Economic research and consulting
Ownership (%)	100.00%	100.00%
Region	Seoul
Domestic [member] | POSCO Research Institute [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | POSMATE [Member]
Disclosure of subsidiaries [line items]
Principal operations	Business facility maintenance
Ownership (%)	100.00%	68.30%
Region	Seoul
Domestic [member] | POSMATE [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	83.83%	57.25%
Domestic [member] | POSMATE [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	16.17%	11.05%
Domestic [member] | POSCO A&C [Member]
Disclosure of subsidiaries [line items]
Principal operations	Architecture and consulting
Ownership (%)	100.00%	100.00%
Region	Seoul
Domestic [member] | POSCO A&C [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | POSCO Venture Capital Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in venture companies
Ownership (%)	95.00%	95.00%
Region	Pohang
Domestic [member] | POSCO Venture Capital Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	95.00%	95.00%
Domestic [member] | eNtoB Corporation [member]
Disclosure of subsidiaries [line items]
Principal operations	Electronic commerce
Ownership (%)	61.13%	61.13%
Region	Seoul
Domestic [member] | eNtoB Corporation [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	7.50%	7.50%
Domestic [member] | eNtoB Corporation [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	53.63%	53.63%
Domestic [member] | POSCO CHEMTECH [member]
Disclosure of subsidiaries [line items]
Principal operations	Refractories manufacturing and sales
Ownership (%)	60.00%	60.00%
Region	Pohang
Domestic [member] | POSCO CHEMTECH [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	60.00%	60.00%
Domestic [member] | POSCO-Terminal Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Transporting and warehousing
Ownership (%)	51.00%	51.00%
Region	Gwangyang
Domestic [member] | POSCO-Terminal Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	51.00%	51.00%
Domestic [member] | POSCO M-TECH [Member]
Disclosure of subsidiaries [line items]
Principal operations	Packing materials manufacturing and sales
Ownership (%)	48.85%	48.85%
Region	Pohang
Domestic [member] | POSCO M-TECH [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	48.85%	48.85%
Domestic [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of subsidiaries [line items]
Principal operations	Generation of electricity
Ownership (%)	89.02%	89.02%
Region	Seoul
Domestic [member] | POSCO ENERGY CO., LTD. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	89.02%	89.02%
Domestic [member] | POSCO NIPPON STEEL RHF JOINT VENTURE. CO., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel byproduct manufacturing and sales
Ownership (%)	70.00%	70.00%
Region	Pohang
Domestic [member] | POSCO NIPPON STEEL RHF JOINT VENTURE. CO., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
Domestic [member] | MegaAsset Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate rental and sales
Ownership (%)	100.00%	100.00%
Region	Incheon
Domestic [member] | MegaAsset Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Future Creation Fund Postech Early Stage account [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in venture companies
Ownership (%)	40.00%	40.00%
Region	Seoul
Domestic [member] | Future Creation Fund Postech Early Stage account [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	40.00%	40.00%
Domestic [member] | POSCO WOMAN'S FUND [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in venture companies
Ownership (%)	40.00%	40.00%
Region	Seoul
Domestic [member] | POSCO WOMAN'S FUND [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	40.00%	40.00%
Domestic [member] | Pospower Co Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Generation of electricity
Ownership (%)	100.00%	100.00%
Region	Samcheok
Domestic [member] | Pospower Co Ltd [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Songdo Posco Family housing [member]
Disclosure of subsidiaries [line items]
Principal operations	House manufacturing and management
Ownership (%)	100.00%	100.00%
Region	Incheon
Domestic [member] | Songdo Posco Family housing [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Posco Group University [Member]
Disclosure of subsidiaries [line items]
Principal operations	Education service and real estate business
Ownership (%)	100.00%	100.00%
Region	Incheon
Domestic [member] | Posco Group University [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | HOTEL LAONZENA [Member]
Disclosure of subsidiaries [line items]
Principal operations	Hotel business
Ownership (%)	100.00%	100.00%
Region	Daegu
Domestic [member] | HOTEL LAONZENA [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Growth Ladder POSCO K-Growth Global Fund [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in venture companies
Ownership (%)	50.00%	50.00%
Region	Pohang
Domestic [member] | Growth Ladder POSCO K-Growth Global Fund [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	50.00%	50.00%
Domestic [member] | 2015 POSCO New technology II Fund [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in venture companies
Ownership (%)	25.00%	25.00%
Region	Pohang
Domestic [member] | 2015 POSCO New technology II Fund [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	25.00%	25.00%
Domestic [member] | POCA STEM Co., Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Stem cell medicine development
Ownership (%)	100.00%	100.00%
Region	Seoul
Domestic [member] | POCA STEM Co., Ltd [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Posco e&c Songdo International Building [member]
Disclosure of subsidiaries [line items]
Principal operations	Non-residential building rental
Ownership (%)	100.00%	100.00%
Region	Seoul
Domestic [member] | Posco e&c Songdo International Building [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | POSCO ES MATERIALS CO., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Secondary and storage battery manufacturing
Ownership (%)	75.32%	75.32%
Region	Gumi
Domestic [member] | POSCO ES MATERIALS CO., LTD. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	75.32%	75.32%
Domestic [member] | Poscoene [Member]
Disclosure of subsidiaries [line items]
Principal operations	Refuse derived fuel and power generation
Ownership (%)	100.00%	100.00%
Region	Seoul
Domestic [member] | Poscoene [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | POSCO Humans [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction
Ownership (%)	90.30%	90.30%
Region	Pohang
Domestic [member] | POSCO Humans [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.30%	90.30%
Domestic [member] | Mapo Hibroad Parking co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction
Ownership (%)	71.00%	70.99%
Region	Seoul
Domestic [member] | Mapo Hibroad Parking co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	71.00%	70.99%
Domestic [member] | BLUE O&M Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Engineering service
Ownership (%)	100.00%	100.00%
Region	Pohang
Domestic [member] | BLUE O&M Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Busan E&E Co,. Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Refuse derived fuel and power generation
Ownership (%)	70.00%	70.00%
Region	Busan
Domestic [member] | Busan E&E Co,. Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
Domestic [member] | POSCO Family Strategy Fund [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in venture companies
Ownership (%)	100.00%	100.00%
Region	Pohang
Domestic [member] | POSCO Family Strategy Fund [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	69.91%	69.91%
Domestic [member] | POSCO Family Strategy Fund [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	30.09%	30.09%
Domestic [member] | POSCO DAEWOO Corporation [member]
Disclosure of subsidiaries [line items]
Principal operations	Trading, energy & resource development and others
Ownership (%)	62.94%	60.31%
Region	Seoul
Domestic [member] | POSCO DAEWOO Corporation [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	62.90%	60.31%
Domestic [member] | POSCO DAEWOO Corporation [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	0.04%
Domestic [member] | Pohang Scrap Recycling Distribution Center Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel processing and sales
Ownership (%)	51.00%	51.00%
Region	Pohang
Domestic [member] | Pohang Scrap Recycling Distribution Center Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	51.00%	51.00%
Domestic [member] | PSC Energy Global Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Investment in energy industry
Ownership (%)	100.00%	100.00%
Region	Pohang
Domestic [member] | PSC Energy Global Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Suncheon Eco Trans Co., Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Train manufacturing and management
Ownership (%)	100.00%	100.00%
Region	Suncheon
Domestic [member] | Suncheon Eco Trans Co., Ltd [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Domestic [member] | Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2 [member]
Disclosure of subsidiaries [line items]
Principal operations	Private equity trust
Ownership (%)	97.47%
Region	Seoul
Domestic [member] | Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-2 [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	97.47%
Domestic [member] | Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5 [member]
Disclosure of subsidiaries [line items]
Principal operations	Private equity trust
Ownership (%)	99.67%
Region	Seoul
Domestic [member] | Kyobo Securities Bond Plus 6M Professional Private Equity Trust W-5 [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	99.67%
Domestic [member] | Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust [member]
Disclosure of subsidiaries [line items]
Principal operations	Private equity trust
Ownership (%)	99.01%
Region	Seoul
Domestic [member] | Mirae Asset Smart Q Sigma 2.0 Professional Private Equity Trust [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	99.01%
Domestic [member] | IT Engineering CO. Ltd [member]
Disclosure of subsidiaries [line items]
Principal operations	Automotive engineering service
Ownership (%)		17.00%
Region	Seoul
Domestic [member] | IT Engineering CO. Ltd [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		17.00%
Domestic [member] | POSCO Engineering CO., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Construction and engineering service
Ownership (%)		95.56%
Region	Incheon
Domestic [member] | POSCO Engineering CO., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)		95.56%
Domestic [member] | POSCO Research & Technology [Member]
Disclosure of subsidiaries [line items]
Principal operations	Intellectual Property Services and consulting
Ownership (%)	100.00%
Region	Seoul
Domestic [member] | POSCO Research & Technology [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%
Foreign [member] | POSCO America Corporation [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel trading
Ownership (%)	100.00%	100.00%
Region	USA
Foreign [member] | POSCO America Corporation [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	99.45%	99.45%
Foreign [member] | POSCO America Corporation [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	0.55%	0.55%
Foreign [member] | POSCO AUSTRALIA PTY LTD [member]
Disclosure of subsidiaries [line items]
Principal operations	Raw material sales & mine development
Ownership (%)	100.00%	100.00%
Region	Australia
Foreign [member] | POSCO AUSTRALIA PTY LTD [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO Canada Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Coal sales
Ownership (%)	100.00%	100.00%
Region	Canada
Foreign [member] | POSCO Canada Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO Asia Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel and raw material trading
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO Asia Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-CTPC Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO-CTPC Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	56.60%	56.60%
Foreign [member] | POSCO-CTPC Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	43.40%	43.40%
Foreign [member] | POSCO E&C Vietnam Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel structure manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Vietnam
Foreign [member] | POSCO E&C Vietnam Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | Zhangjiagang Pohang Stainless Steel Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Stainless steel manufacturing and sales
Ownership (%)	82.48%	82.48%
Region	China
Foreign [member] | Zhangjiagang Pohang Stainless Steel Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	58.60%	58.60%
Foreign [member] | Zhangjiagang Pohang Stainless Steel Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	23.88%	23.88%
Foreign [member] | POSCO(Guangdong) Coated Steel Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Plating steel sheet manufacturing and sales
Ownership (%)	97.08%	97.08%
Region	China
Foreign [member] | POSCO(Guangdong) Coated Steel Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	87.04%	87.04%
Foreign [member] | POSCO(Guangdong) Coated Steel Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.04%	10.04%
Foreign [member] | POSCO (Thailand) Company Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Thailand
Foreign [member] | POSCO (Thailand) Company Limited [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	88.58%	85.62%
Foreign [member] | POSCO (Thailand) Company Limited [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	11.42%	14.38%
Foreign [member] | Myanmar POSCO Steel Co., Ltd [Member]
Disclosure of subsidiaries [line items]
Principal operations	Zinc relief manufacturing and sales
Ownership (%)	70.00%	70.00%
Region	Myanmar
Foreign [member] | Myanmar POSCO Steel Co., Ltd [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
Foreign [member] | POSCO-MKPC SDN BHD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	70.00%	70.00%
Region	Malaysia
Foreign [member] | POSCO-MKPC SDN BHD [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	44.69%	44.69%
Foreign [member] | POSCO-MKPC SDN BHD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	25.31%	25.31%
Foreign [member] | Qingdao Pohang Stainless Steel Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Stainless steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | Qingdao Pohang Stainless Steel Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
Foreign [member] | Qingdao Pohang Stainless Steel Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	30.00%	30.00%
Foreign [member] | POSCO(Suzhou) Automotive Processing Center Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO(Suzhou) Automotive Processing Center Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.00%	90.00%
Foreign [member] | POSCO(Suzhou) Automotive Processing Center Co., Ltd. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
Foreign [member] | POSCO-China Qingdao Processing Center Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO-China Qingdao Processing Center Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POS-ORE PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Iron ore sales and sales
Ownership (%)	100.00%	100.00%
Region	Australia
Foreign [member] | POS-ORE PTY LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-China Holding Corp. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Holding company
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO-China Holding Corp. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO JAPAN Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Principal operations	Steel trading
Ownership (%)	100.00%	100.00%
Region	Japan
Foreign [member] | POSCO JAPAN Co., Ltd. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POS-CD PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Coal sales
Ownership (%)	100.00%	100.00%
Region	Australia
Foreign [member] | POS-CD PTY LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POS-GC PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Coal sales
Ownership (%)	100.00%	100.00%
Region	Australia
Foreign [member] | POS-GC PTY LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-India Private Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	99.99%	99.99%
Region	India
Foreign [member] | POSCO-India Private Limited [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	99.99%	99.99%
Foreign [member] | POSCO-India Pune Processing Center. Pvt. Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	65.00%	65.00%
Region	India
Foreign [member] | POSCO-India Pune Processing Center. Pvt. Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	65.00%	65.00%
Foreign [member] | POSCO Japan PC CO., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	86.12%	86.12%
Region	Japan
Foreign [member] | POSCO Japan PC CO., LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	86.12%	86.12%
Foreign [member] | POSCO-CFPC Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO-CFPC Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	39.60%	39.60%
Foreign [member] | POSCO-CFPC Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	60.40%	60.40%
Foreign [member] | POSCO E&C CHINA Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Civil engineering and construction
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO E&C CHINA Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO MPPC S.A. de C.V. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	96.31%	95.00%
Region	Mexico
Foreign [member] | POSCO MPPC S.A. de C.V. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	21.02%
Foreign [member] | POSCO MPPC S.A. de C.V. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	75.29%	95.00%
Foreign [member] | Zhangjigang Pohang Port Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Loading and unloading service
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | Zhangjigang Pohang Port Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-VIETNAM Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Vietnam
Foreign [member] | POSCO-VIETNAM Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO MEXICO S.A. DE C.V. [member]
Disclosure of subsidiaries [line items]
Principal operations	Automotive steel sheet manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	Mexico
Foreign [member] | POSCO MEXICO S.A. DE C.V. [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	84.84%	84.84%
Foreign [member] | POSCO MEXICO S.A. DE C.V. [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	15.16%	15.16%
Foreign [member] | POSCAN Elkview [Member]
Disclosure of subsidiaries [line items]
Principal operations	Coal sales
Ownership (%)	100.00%	100.00%
Region	Canada
Foreign [member] | POSCAN Elkview [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-Poland Wroclaw Processing Center Sp. z o. o. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	60.00%	60.00%
Region	Poland
Foreign [member] | POSCO-Poland Wroclaw Processing Center Sp. z o. o. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	60.00%	60.00%
Foreign [member] | POS-NP PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Coal sales
Ownership (%)	100.00%	100.00%
Region	Australia
Foreign [member] | POS-NP PTY LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO RUS LLC [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading and business development
Ownership (%)	100.00%	100.00%
Region	Russia
Foreign [member] | POSCO RUS LLC [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.00%	90.00%
Foreign [member] | POSCO RUS LLC [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
Foreign [member] | POSCO DAEWOO WAIGAIQIAO SHANGHAI CO., LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Intermediary trade & bonded warehouse operation
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO DAEWOO WAIGAIQIAO SHANGHAI CO., LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | PT. Bio Inti Agrindo [member]
Disclosure of subsidiaries [line items]
Principal operations	Forest resources development
Ownership (%)	85.00%	85.00%
Region	Indonesia
Foreign [member] | PT. Bio Inti Agrindo [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	85.00%	85.00%
Foreign [member] | POSCO ENGINEERING AND CONSTRUCTION AUSTRALIA PTY LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Iron ore development and sales
Ownership (%)	100.00%	100.00%
Region	Australia
Foreign [member] | POSCO ENGINEERING AND CONSTRUCTION AUSTRALIA PTY LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	60.00%	60.00%
Region	China
Foreign [member] | POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	50.00%	50.00%
Foreign [member] | POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
Foreign [member] | POSCO Thainox Public Company Limited [member]
Disclosure of subsidiaries [line items]
Principal operations	STS cold-rolled steel manufacturing and sales
Ownership (%)	84.88%	84.93%
Region	Thailand
Foreign [member] | POSCO Thainox Public Company Limited [member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	84.88%	84.93%
Foreign [member] | Hunchun Posco Hyundai Logistics [Member]
Disclosure of subsidiaries [line items]
Principal operations	Logistics
Ownership (%)	80.00%	80.00%
Region	China
Foreign [member] | Hunchun Posco Hyundai Logistics [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	80.00%	80.00%
Foreign [member] | POSCO DAEWOO VIETNAM CO., LTD [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Vietnam
Foreign [member] | POSCO DAEWOO VIETNAM CO., LTD [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO(Chongqing) Automotive Processing Center Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO(Chongqing) Automotive Processing Center Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	90.00%	90.00%
Foreign [member] | POSCO(Chongqing) Automotive Processing Center Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
Foreign [member] | SUZHOU POSCO-CORE TECHNOLOGY CO., LTD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Component manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | SUZHOU POSCO-CORE TECHNOLOGY CO., LTD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | PT.Krakatau Posco Chemtech Calcination [Member]
Disclosure of subsidiaries [line items]
Principal operations	Quicklime manufacturing and sales
Ownership (%)	80.00%	80.00%
Region	Indonesia
Foreign [member] | PT.Krakatau Posco Chemtech Calcination [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	80.00%	80.00%
Foreign [member] | POSCO AFRICA (PROPRIETARY) LIMITED [Member]
Disclosure of subsidiaries [line items]
Principal operations	Mine development
Ownership (%)	100.00%	100.00%
Region	South Africa
Foreign [member] | POSCO AFRICA (PROPRIETARY) LIMITED [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO ICT BRASIL [Member]
Disclosure of subsidiaries [line items]
Principal operations	IT service and engineering
Ownership (%)	100.00%	100.00%
Region	Brazil
Foreign [member] | POSCO ICT BRASIL [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | LA-SRDC [Member]
Disclosure of subsidiaries [line items]
Principal operations	Scrap manufacturing
Ownership (%)	100.00%	100.00%
Region	USA
Foreign [member] | LA-SRDC [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | DONG FANG JIN HONG [member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate development, rental and management
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | DONG FANG JIN HONG [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO AMERICA COMERCIALIZADORA S DE RL DE CV [Member]
Disclosure of subsidiaries [line items]
Principal operations	Human resource service
Ownership (%)	100.00%	100.00%
Region	Mexico
Foreign [member] | POSCO AMERICA COMERCIALIZADORA S DE RL DE CV [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO(Guangdong) Automotive Steel Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	93.64%	93.64%
Region	China
Foreign [member] | POSCO(Guangdong) Automotive Steel Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	83.64%	83.64%
Foreign [member] | POSCO(Guangdong) Automotive Steel Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
Foreign [member] | POSCO-Malaysia SDN. BHD. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	95.42%	95.42%
Region	Malaysia
Foreign [member] | POSCO-Malaysia SDN. BHD. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	81.79%	81.79%
Foreign [member] | POSCO-Malaysia SDN. BHD. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	13.63%	13.63%
Foreign [member] | PT KRAKATAU BLUE WATER [Member]
Disclosure of subsidiaries [line items]
Principal operations	Wastewater treatment facilities operation and maintenance
Ownership (%)	67.00%	67.00%
Region	Indonesia
Foreign [member] | PT KRAKATAU BLUE WATER [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	67.00%	67.00%
Foreign [member] | POSCO DAEWOO MYANMAR CORPORATION LIMITED [Member]
Disclosure of subsidiaries [line items]
Principal operations	Trading business
Ownership (%)	100.00%	100.00%
Region	Myanmar
Foreign [member] | POSCO DAEWOO MYANMAR CORPORATION LIMITED [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO-Italy Processing Center [Member]
Disclosure of subsidiaries [line items]
Principal operations	Stainless steel sheet manufacturing and sales
Ownership (%)	90.00%	90.00%
Region	Italy
Foreign [member] | POSCO-Italy Processing Center [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	80.00%	80.00%
Foreign [member] | POSCO-Italy Processing Center [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	10.00%	10.00%
Foreign [member] | POSCO DAEWOO E&P CANADA CORPORATION [Member]
Disclosure of subsidiaries [line items]
Principal operations	Crude oil and natural gas mining
Ownership (%)	100.00%	100.00%
Region	Canada
Foreign [member] | POSCO DAEWOO E&P CANADA CORPORATION [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | Myanmar POSCO C&C Company, Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	70.00%	70.00%
Region	Myanmar
Foreign [member] | Myanmar POSCO C&C Company, Limited [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	70.00%	70.00%
Foreign [member] | POSCO ICT VIETNAM [Member]
Disclosure of subsidiaries [line items]
Principal operations	IT service and electric control engineering
Ownership (%)	100.00%	100.00%
Region	Vietnam
Foreign [member] | POSCO ICT VIETNAM [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | Daewoo Global Development. Pte., Ltd [member]
Disclosure of subsidiaries [line items]
Principal operations	Real estate development
Ownership (%)	81.51%	51.00%
Region	Myanmar
Foreign [member] | Daewoo Global Development. Pte., Ltd [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	81.51%	51.00%
Foreign [member] | Myanmar POSCO Engineering & Construction Company, Limited [Member]
Disclosure of subsidiaries [line items]
Principal operations	Construction and engineering service
Ownership (%)	100.00%	100.00%
Region	Myanmar
Foreign [member] | Myanmar POSCO Engineering & Construction Company, Limited [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POS-Minerals Corporation [Member]
Disclosure of subsidiaries [line items]
Principal operations	Mine development management and sales
Ownership (%)	100.00%	100.00%
Region	USA
Foreign [member] | POS-Minerals Corporation [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%
Foreign [member] | POSCO(Wuhu) Automotive Processing Center Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Principal operations	Steel manufacturing and sales
Ownership (%)	100.00%	100.00%
Region	China
Foreign [member] | POSCO(Wuhu) Automotive Processing Center Co., Ltd. [Member] | Posco [member]
Disclosure of subsidiaries [line items]
Ownership (%)	68.57%	68.57%
Foreign [member] | POSCO(Wuhu) Automotive Processing Center Co., Ltd. [Member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	31.43%	31.43%
Foreign [member] | POSCO Engineering and Construction India Private Limited [member]
Disclosure of subsidiaries [line items]
Principal operations	Civil engineering and construction
Ownership (%)	100.00%	100.00%
Region	India
Foreign [member] | POSCO Engineering and Construction India Private Limited [member] | Subsidiaries [member]
Disclosure of subsidiaries [line items]
Ownership (%)	100.00%	100.00%

XML

General Information - Details of Non-controlling Interest (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of subsidiaries [line items]
Current assets	₩ 31,844,259	₩ 29,655,108
Non-current assets	47,941,370	50,482,506
Current liabilities	(19,490,338)	(18,944,309)
Non-current liabilities	(12,968,566)	(15,428,036)
Equity	47,326,725	45,765,269	₩ 45,013,201	₩ 45,257,396
Non-controlling interests	3,666,334	3,430,441
Sales	60,186,867	52,939,771	58,522,268
Profit (loss) for the period	2,909,311	1,032,065	(116,215)
Profit (loss) attributable to non-controlling interests	153,081	(322,742)	(287,709)
Cash flows from operating activities	5,607,310	5,269,418	7,601,829
Cash flows from investing activities	(3,817,874)	(3,754,627)	(4,534,676)
Effect of exchange rate fluctuation on cash held	(58,997)	12,611	23,496
Net increase (decrease) in cash and cash equivalents	164,911	(2,423,565)	849,048
POSCO DAEWOO Corporation [member]
Disclosure of subsidiaries [line items]
Current assets	4,483,544	4,038,313	3,930,857
Non-current assets	4,590,394	4,510,085	4,777,482
Current liabilities	(4,221,443)	(3,662,811)	(3,568,714)
Non-current liabilities	(1,549,013)	(1,681,182)	(1,941,909)
Equity	3,303,482	3,204,405	3,197,716
Non-controlling interests	1,224,303	1,271,750	1,269,096
Sales	20,891,526	15,417,550	16,890,723
Profit (loss) for the period	115,321	113,832	79,092
Profit (loss) attributable to non-controlling interests	42,739	45,177	31,390
Cash flows from operating activities	128,875	337,338	433,493
Cash flows from investing activities	(86,365)	(35,054)	(74,644)
Cash flows from financing activities (before dividends to non-controlling interest)	(19,295)	(295,226)	(340,532)
Dividend to non-controlling interest	(22,597)	(22,597)	(22,597)
Effect of exchange rate fluctuation on cash held	(459)	10	430
Net increase (decrease) in cash and cash equivalents	159	(15,529)	(3,850)
PT. KRAKATAU POSCO [member]
Disclosure of subsidiaries [line items]
Current assets	557,041	460,376	441,999
Non-current assets	2,771,504	3,304,292	3,363,935
Current liabilities	(1,237,255)	(1,120,077)	(1,004,002)
Non-current liabilities	(1,933,247)	(2,337,612)	(2,315,554)
Equity	158,043	306,979	486,378
Non-controlling interests	47,413	92,094	145,913
Sales	1,635,837	1,244,711	1,227,266
Profit (loss) for the period	(117,729)	(187,151)	(398,438)
Profit (loss) attributable to non-controlling interests	(35,318)	(56,145)	(119,531)
Cash flows from operating activities	(27,817)	45,672	(13,595)
Cash flows from investing activities	(5,502)	(8,804)	(8,994)
Cash flows from financing activities (before dividends to non-controlling interest)	31,782	(36,286)	18,886
Effect of exchange rate fluctuation on cash held	(147)	67	83
Net increase (decrease) in cash and cash equivalents	(1,684)	649	(3,620)
POSCO CHEMTECH [member]
Disclosure of subsidiaries [line items]
Current assets	441,325	397,370	360,812
Non-current assets	316,724	243,401	248,549
Current liabilities	(145,649)	(109,016)	(106,167)
Non-current liabilities	(970)	(2,337)	(5,405)
Equity	611,430	529,418	497,789
Non-controlling interests	244,572	211,767	199,116
Sales	1,163,918	1,076,455	1,175,272
Profit (loss) for the period	101,019	41,829	35,516
Profit (loss) attributable to non-controlling interests	40,408	16,732	14,206
Cash flows from operating activities	20,042	30,295	19,921
Cash flows from investing activities	(18,699)	(42,021)	25,318
Cash flows from financing activities (before dividends to non-controlling interest)	8	(1,250)	66
Dividend to non-controlling interest	(7,088)	(4,726)	(4,135)
Effect of exchange rate fluctuation on cash held	(6)	1
Net increase (decrease) in cash and cash equivalents	(5,743)	(17,701)	41,170
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of subsidiaries [line items]
Current assets	4,878,251	5,163,436	5,115,325
Non-current assets	2,444,616	1,710,398	1,756,367
Current liabilities	(3,896,680)	(3,284,090)	(3,125,697)
Non-current liabilities	(833,403)	(855,791)	(768,529)
Equity	2,592,784	2,733,953	2,977,466
Non-controlling interests	1,223,816	1,290,450	1,405,391
Sales	5,794,532	5,352,395	6,866,802
Profit (loss) for the period	169,011	(760,187)	108,895
Profit (loss) attributable to non-controlling interests	79,775	(358,815)	51,399
Cash flows from operating activities	(84,840)	(211,182)	434,257
Cash flows from investing activities	(171,924)	(102,939)	21,075
Cash flows from financing activities (before dividends to non-controlling interest)	150,801	(20,953)	69,615
Dividend to non-controlling interest		(14,800)	(703)
Effect of exchange rate fluctuation on cash held	(3,541)	760	819
Net increase (decrease) in cash and cash equivalents	(109,504)	(349,114)	525,063
POSCO ENERGY CO., LTD. [member]
Disclosure of subsidiaries [line items]
Current assets	1,054,538	713,039	590,460
Non-current assets	2,859,824	3,038,665	3,333,351
Current liabilities	(785,462)	(937,668)	(663,945)
Non-current liabilities	(2,200,065)	(2,172,226)	(2,420,547)
Equity	928,835	641,810	839,319
Non-controlling interests	762,390	514,200	535,878
Sales	1,578,026	1,657,890	1,909,919
Profit (loss) for the period	70,795	(130,809)	15,831
Profit (loss) attributable to non-controlling interests	7,770	(14,357)	1,738
Cash flows from operating activities	30,295	18,107	6,075
Cash flows from investing activities	(2,792)	(1,047)	(20,980)
Cash flows from financing activities (before dividends to non-controlling interest)	220,317	(2,875)	11,572
Dividend to non-controlling interest	(24,183)	(24,378)	(24,125)
Net increase (decrease) in cash and cash equivalents	223,637	(10,193)	(27,458)
Others [member]
Disclosure of subsidiaries [line items]
Current assets	8,579,813	9,696,140	9,648,917
Non-current assets	6,676,559	7,749,277	7,776,264
Current liabilities	(8,313,902)	(9,669,053)	(9,692,004)
Non-current liabilities	(2,048,454)	(2,856,498)	(2,567,980)
Equity	4,894,016	4,919,866	5,165,197
Non-controlling interests	974,941	945,962	1,182,137
Sales	23,547,072	23,251,563	25,784,254
Profit (loss) for the period	258,053	(461,034)	(835,389)
Profit (loss) attributable to non-controlling interests	39,605	(312,297)	(247,106)
Cash flows from operating activities	140,418	53,050	(72,371)
Cash flows from investing activities	(63,621)	(253,206)	(110,712)
Cash flows from financing activities (before dividends to non-controlling interest)	(38,090)	204,797	289,715
Dividend to non-controlling interest	(12,777)	(7,349)	(145,582)
Effect of exchange rate fluctuation on cash held	(15,532)	1,687	3,502
Net increase (decrease) in cash and cash equivalents	10,398	(1,021)	(35,448)
Non-controlling Interest [member]
Disclosure of subsidiaries [line items]
Current assets	19,994,512	20,468,674	20,088,370
Non-current assets	19,659,621	20,556,118	21,255,948
Current liabilities	(18,600,391)	(18,782,715)	(18,160,529)
Non-current liabilities	(8,565,152)	(9,905,646)	(10,019,924)
Equity	12,488,590	12,336,431	13,163,865
Non-controlling interests	4,477,435	4,326,223	4,737,531
Sales	54,610,911	48,000,564	53,854,236
Profit (loss) for the period	596,470	(1,383,520)	(994,493)
Profit (loss) attributable to non-controlling interests	174,979	(679,705)	(267,904)
Cash flows from operating activities	206,973	273,280	807,780
Cash flows from investing activities	(348,903)	(443,071)	(168,937)
Cash flows from financing activities (before dividends to non-controlling interest)	345,523	(151,793)	49,322
Dividend to non-controlling interest	(66,645)	(73,850)	(197,142)
Effect of exchange rate fluctuation on cash held	(19,685)	2,525	4,834
Net increase (decrease) in cash and cash equivalents	₩ 117,263	₩ (392,909)	₩ 495,857

XML

General Information - Details of Associates (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Domestic [member] | EQP POSCO Global No1 Natural Resources PEF [member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	31.14%	29.37%
Region	Seoul
Domestic [member] | POSCO PLANTEC Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Construction of industrial plant
Ownership (%)	73.94%	73.94%
Region	Ulsan
Domestic [member] | SNNC [member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	49.00%	49.00%
Region	Gwangyang
Domestic [member] | QSONE Co.,Ltd. [member]
Disclosure of associates [line items]
Category of business	Real estate rental and facility management
Ownership (%)	50.00%	50.00%
Region	Seoul
Domestic [member] | Chuncheon Energy Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Electricity generation
Ownership (%)	45.67%	29.90%
Region	Chuncheon
Domestic [member] | Incheon-Gimpo Expressway Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Construction
Ownership (%)	18.26%	20.04%
Region	Anyang
Domestic [member] | Blue Ocean Private Equity Fund [member]
Disclosure of associates [line items]
Category of business	Private equity financial
Ownership (%)	27.52%	27.52%
Region	Seoul
Domestic [member] | UITrans LRT Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Transporting
Ownership (%)	38.19%	38.19%
Region	Seoul
Domestic [member] | Keystone NO. 1. Private Equity Fund [Member]
Disclosure of associates [line items]
Category of business	Private equity financial
Ownership (%)	40.45%	40.45%
Region	Seoul
Domestic [member] | Chungju Enterprise City Development Co.,Ltd [member]
Disclosure of associates [line items]
Category of business	Real estate development
Ownership (%)	29.53%	29.53%
Region	Chungju
Domestic [member] | Daesung Steel [member]
Disclosure of associates [line items]
Category of business	Steel sales
Ownership (%)	17.54%	17.54%
Region	Busan
Domestic [member] | KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund [member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	12.50%	12.50%
Region	Seoul
Domestic [member] | KONES, Corp. [member]
Disclosure of associates [line items]
Category of business	Technical service
Ownership (%)	41.67%	41.67%
Region	Gyeongju
Domestic [member] | Gale International Korea, LLC [Member]
Disclosure of associates [line items]
Category of business	Real estate rental
Ownership (%)	29.90%	29.90%
Region	Seoul
Domestic [member] | Pohang Techno Valley PFV Corporation [Member]
Disclosure of associates [line items]
Category of business	Real estate development, supply and rental
Ownership (%)	57.39%	30.28%
Region	Pohang
Domestic [member] | Gunggi Green Energy [Member]
Disclosure of associates [line items]
Category of business	Electricity generation
Ownership (%)	19.00%	19.00%
Region	Hwaseong
Domestic [member] | Pohang Special Welding Co.,Ltd. [Member]
Disclosure of associates [line items]
Category of business	Welding material and tools manufacturing and sales
Ownership (%)	50.00%	50.00%
Region	Pohang
Domestic [member] | KC Chemicals CORP [member]
Disclosure of associates [line items]
Category of business	Machinery manufacturing
Ownership (%)	19.00%	19.00%
Region	Hwaseong
Domestic [member] | Posco-IDV Growth Ladder IP Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	17.86%	17.86%
Region	Seoul
Domestic [member] | DAEHO GLOBAL MANAGEMENT CO., LTD. [Member]
Disclosure of associates [line items]
Category of business	Investment advisory service
Ownership (%)	35.82%	35.82%
Region	Pohang
Domestic [member] | Clean Gimpo Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Construction
Ownership (%)	29.58%	29.58%
Region	Gimpo
Domestic [member] | Postech Early Stage Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	10.00%	10.00%
Region	Pohang
Domestic [member] | POSCO Energy Valley Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	20.00%	20.00%
Region	Pohang
Domestic [member] | Pureun Tongyeong Enviro Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Sewerage treatment
Ownership (%)	20.40%	20.40%
Region	Tongyeong
Domestic [member] | Posgreen Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Lime and plaster manufacturing
Ownership (%)	19.00%	19.00%
Region	Gwangyang
Domestic [member] | Pohang E&E Co,. Ltd. [Member]
Disclosure of associates [line items]
Category of business	Investment in waste energy
Ownership (%)	30.00%	30.00%
Region	Pohang
Domestic [member] | POSTECH Social Enterprise Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	9.17%	9.17%
Region	Seoul
Domestic [member] | Applied Science Corp. [Member]
Disclosure of associates [line items]
Category of business	Machinery manufacturing
Ownership (%)	23.87%	24.88%
Region	Paju
Domestic [member] | Noeul Green Energy [member]
Disclosure of associates [line items]
Category of business	Electricity generation
Ownership (%)	10.00%	10.00%
Region	Seoul
Domestic [member] | Pohang Techno Valley AMC [Member]
Disclosure of associates [line items]
Category of business	Construction
Ownership (%)	29.50%	29.50%
Region	Pohang
Domestic [member] | New Songdo International City Development, LLC [member]
Disclosure of associates [line items]
Category of business	Real estate rental
Ownership (%)	29.90%	29.90%
Region	Seoul
Domestic [member] | Mokpo Deayang Industrial Corporation [Member]
Disclosure of associates [line items]
Category of business	Real estate development and rental
Ownership (%)	27.40%	27.40%
Region	Mokpo
Domestic [member] | Clean Iksan Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Construction
Ownership (%)	23.50%	23.50%
Region	Iksan
Domestic [member] | Innovalley Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Real estate development
Ownership (%)	28.77%	28.77%
Region	Yongin
Domestic [member] | Pure Gimpo Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Construction
Ownership (%)	28.79%	28.79%
Region	Seoul
Domestic [member] | Garolim Tidal Power Plant Co.,Ltd [Member]
Disclosure of associates [line items]
Category of business	Tidal power plant construction and management
Ownership (%)	32.13%	32.13%
Region	Seosan
Domestic [member] | 2016 PoscoPlutus New Technology Investment Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	25.17%	25.17%
Region	Seoul
Domestic [member] | Hyundai Invest Guggenheim CLO Private Special Asset Investment Trust II [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	38.47%	38.47%
Region	Seoul
Domestic [member] | PoscoPlutus Bio Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	11.97%	11.97%
Region	Seoul
Domestic [member] | PoscoPlutus Project Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	11.91%	11.91%
Region	Seoul
Domestic [member] | Posco Agrifood Export Investment Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	30.00%	30.00%
Region	Seoul
Domestic [member] | PoscoPlutus Project II Investment Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	0.61%	0.61%
Region	Seoul
Domestic [member] | Posco Culture Contents Fund [Member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	31.67%	31.67%
Region	Seoul
Domestic [member] | PCC Centroid New 1st Fund [member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	24.10%
Region	Seoul
Domestic [member] | PCC Amberstone Private Equity Fund I [member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	9.71%
Region	Seoul
Domestic [member] | POSCO Advanced Technical Staff Fund [member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	15.87%
Region	Seoul
Domestic [member] | POSCO 4th Industrial Revolution Fund [member]
Disclosure of associates [line items]
Category of business	Investment in new technologies
Ownership (%)	20.00%
Region	Seoul
Domestic [member] | METAPOLIS Co.,Ltd [member]
Disclosure of associates [line items]
Category of business	Multiplex development
Ownership (%)		40.05%
Region	Hwaseong
Domestic [member] | Universal Studios Resort Asset Management Corporation [Member]
Disclosure of associates [line items]
Category of business	Real estate services
Ownership (%)		26.17%
Region	Seoul
Domestic [member] | Busan-Gimhae Light Rail Transit Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Transporting
Ownership (%)		25.00%
Region	Gimhae
Foreign [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of associates [line items]
Category of business	Pipeline construction and management
Ownership (%)	25.04%	25.04%
Region	Myanmar
Foreign [member] | AES-VCM Mong Duong Power Company Limited [member]
Disclosure of associates [line items]
Category of business	Electricity generation
Ownership (%)	30.00%	30.00%
Region	Vietnam
Foreign [member] | 7623704 Canada Inc. [member]
Disclosure of associates [line items]
Category of business	Investments management
Ownership (%)	10.40%	10.40%
Region	Canada
Foreign [member] | Eureka Moly LLC [member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	20.00%	20.00%
Region	USA
Foreign [member] | AMCI (WA) PTY LTD [member]
Disclosure of associates [line items]
Category of business	Iron ore sales & mine development
Ownership (%)	49.00%	49.00%
Region	Australia
Foreign [member] | Nickel mining company SAS [member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	49.00%	49.00%
Region	New Caledonia
Foreign [member] | NCR LLC [member]
Disclosure of associates [line items]
Category of business	Coal sales
Ownership (%)	29.41%	29.41%
Region	Canada
Foreign [member] | Korea LNG Ltd. [member]
Disclosure of associates [line items]
Category of business	Gas production and sales
Ownership (%)	20.00%	20.00%
Region	England
Foreign [member] | PT. batutua tembaga raya [member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	22.00%	24.10%
Region	Indonesia
Foreign [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of associates [line items]
Category of business	Tinplate manufacturing and sales
Ownership (%)	34.00%	34.00%
Region	China
Foreign [member] | PT. wampu electric power [member]
Disclosure of associates [line items]
Category of business	Construction and civil engineering
Ownership (%)	20.00%	20.00%
Region	Indonesia
Foreign [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Steel processing and sales
Ownership (%)	25.00%	25.00%
Region	China
Foreign [member] | VSC POSCO Steel Corporation [member]
Disclosure of associates [line items]
Category of business	Steel processing and sales
Ownership (%)	50.00%	50.00%
Region	Vietnam
Foreign [member] | IMFA ALLOYS FINLEASE LTD. [Member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	24.00%	24.00%
Region	India
Foreign [member] | General Medicines Company Ltd. [Member]
Disclosure of associates [line items]
Category of business	Medicine manufacturing and sales
Ownership (%)	33.00%	33.00%
Region	Sudan
Foreign [member] | PT.INDONESIA POS CHEMTECH CHOSUN Ref [Member]
Disclosure of associates [line items]
Category of business	Refractory manufacturing and sales
Ownership (%)	30.19%	30.19%
Region	Indonesia
Foreign [member] | POSK(Pinghu) Steel Processing Center Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Steel processing and sales
Ownership (%)	20.00%	20.00%
Region	China
Foreign [member] | SHANGHAI LANSHENG DAEWOO CORP. [Member]
Disclosure of associates [line items]
Category of business	Trading
Ownership (%)	49.00%	49.00%
Region	China
Foreign [member] | POS-SEAHSTEELWIRE(TIANJIN)CO., Ltd [member]
Disclosure of associates [line items]
Category of business	Steel processing and sales
Ownership (%)	25.00%	25.00%
Region	China
Foreign [member] | SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN'L TRADING CO., LTD. [Member]
Disclosure of associates [line items]
Category of business	Trading
Ownership (%)	49.00%	49.00%
Region	China
Foreign [member] | PT. Tanggamus Electric Power [member]
Disclosure of associates [line items]
Category of business	Construction and civil engineering
Ownership (%)	17.50%	17.50%
Region	Indonesia
Foreign [member] | NS-Thainox Auto Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Steel manufacturing and sales
Ownership (%)	49.00%	49.00%
Region	Vietnam
Foreign [member] | Hamparan Mulya [member]
Disclosure of associates [line items]
Category of business	Resource development
Ownership (%)	45.00%	45.00%
Region	Indonesia
Foreign [member] | Sebang Steel [member]
Disclosure of associates [line items]
Category of business	Scrap sales
Ownership (%)	49.00%	49.00%
Region	Japan
Foreign [member] | GLOBAL KOMSCO Daewoo LLC [Member]
Disclosure of associates [line items]
Category of business	Cotton celluloid manufacturing and sales
Ownership (%)	35.00%	35.00%
Region	Uzbekistan
Foreign [member] | POSCO-Poggenamp Electrical Steel Pvt. Ltd. [Member]
Disclosure of associates [line items]
Category of business	Steel manufacturing and sales
Ownership (%)	26.00%	26.00%
Region	India
Foreign [member] | KIRIN VIETNAM CO., LTD [Member]
Disclosure of associates [line items]
Category of business	Panel manufacturing
Ownership (%)	19.00%	19.00%
Region	Vietnam
Foreign [member] | POSCHROME (PROPRIETARY) LIMITED [Member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	50.00%	50.00%
Region	South Africa
Foreign [member] | CAML RESOURCES PTY LTD. [Member]
Disclosure of associates [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)	33.34%	33.34%
Region	Australia
Foreign [member] | KG Power(M) SDN. BHD [Member]
Disclosure of associates [line items]
Category of business	Energy & resource development
Ownership (%)	20.00%	20.00%
Region	Malaysia
Foreign [member] | LI3 ENERGY INC [Member]
Disclosure of associates [line items]
Category of business	Energy & resource development
Ownership (%)	26.06%	26.06%
Region	Peru
Foreign [member] | LLP POSUK Titanium [Member]
Disclosure of associates [line items]
Category of business	Titanium manufacturing and sales
Ownership (%)	36.83%	36.83%
Region	Kazakhstan
Foreign [member] | POS-SeAH Steel Wire (Thailand) Co., Ltd. [member]
Disclosure of associates [line items]
Category of business	Steel manufacturing and sales
Ownership (%)	25.00%	25.00%
Region	Thailand
Foreign [member] | Jupiter Mines Limited [Member]
Disclosure of associates [line items]
Category of business	Energy & resource development
Ownership (%)	17.06%	17.08%
Region	Australia
Foreign [member] | KRAKATAU POS-CHEM DONG-SUH CHEMICAL [member]
Disclosure of associates [line items]
Category of business	Chemical by-product manufacturing and sales
Ownership (%)	19.00%	19.00%
Region	Indonesia
Foreign [member] | SAMHWAN VINA CO., LTD [member]
Disclosure of associates [line items]
Category of business	Steel manufacturing and sales
Ownership (%)	19.00%
Region	Vietnam
Foreign [member] | JB CLARK HILLS [Member]
Disclosure of associates [line items]
Category of business	Construction
Ownership (%)	25.00%
Region	Philippines
Foreign [member] | Saudi-Korean Company for Maintenance Properties Management LLC [member]
Disclosure of associates [line items]
Category of business	Building management
Ownership (%)	19.00%
Region	Saudi Arabia
Foreign [member] | AN KHANH NEW CITY DEVELOPMENT J.V. CO., LTD. [member]
Disclosure of associates [line items]
Category of business	Highway construction and new town development
Ownership (%)		50.00%
Region	Vietnam
Foreign [member] | Fifth Combined Heat and Power Plant LLC [Member]
Disclosure of associates [line items]
Category of business	Thermal power generation
Ownership (%)		30.00%
Region	Mongolia
Foreign [member] | Chongqing CISL High Strength Cold Rolling Steel Co., Ltd. [Member]
Disclosure of associates [line items]
Category of business	Steel manufacturing and sales
Ownership (%)		10.00%
Region	China

XML

General Information - Details of Joint Ventures (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Domestic [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of joint ventures [line items]
Category of business	Steel processing and sales
Ownership (%)	60.00%	60.00%
Region	Gwangyang
Domestic [member] | POSCO-SGI Falcon Pharma Biological Secondary Fund [member]
Disclosure of joint ventures [line items]
Category of business	Investment in new technologies
Ownership (%)	24.55%
Region	Seoul
Domestic [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of joint ventures [line items]
Ownership (%)	12.50%
Domestic [member] | POSCO-NPS Niobium LLC [member]
Disclosure of joint ventures [line items]
Ownership (%)	50.00%
Domestic [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of joint ventures [line items]
Ownership (%)	20.00%
Domestic [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of joint ventures [line items]
Ownership (%)	25.00%
Domestic [member] | KOBRASCO [member]
Disclosure of joint ventures [line items]
Ownership (%)	50.00%
Domestic [member] | DMSA/AMSA [member]
Disclosure of joint ventures [line items]
Ownership (%)	4.00%
Foreign [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of joint ventures [line items]
Ownership (%)	60.00%
Foreign [member] | POSCO-KB Shipbuilding Restructuring Fund [member]
Disclosure of joint ventures [line items]
Category of business	Investment in new technologies
Ownership (%)	18.75%
Region	Seoul
Foreign [member] | POSCO-NSC Venture Fund [Member]
Disclosure of joint ventures [line items]
Category of business	Investment in new technologies
Ownership (%)	16.67%
Region	Seoul
Foreign [member] | PCC L&K New Technology 1st Fund [Member]
Disclosure of joint ventures [line items]
Category of business	Investment in new technologies
Ownership (%)	10.00%
Region	Seoul
Foreign [member] | PoscoPlutus Project 3rd Investment Fund [Member]
Disclosure of joint ventures [line items]
Category of business	Investment in new technologies
Ownership (%)	5.96%
Region	Seoul
Foreign [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Energy & resource development
Ownership (%)	12.50%	12.50%
Region	Australia
Foreign [member] | POSCO-NPS Niobium LLC [member]
Disclosure of joint ventures [line items]
Category of business	Mine development
Ownership (%)	50.00%	50.00%
Region	USA
Foreign [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of joint ventures [line items]
Category of business	Steel manufacturing and sales
Ownership (%)	20.00%	20.00%
Region	Brazil
Foreign [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Steel processing and sales
Ownership (%)	25.00%	25.00%
Region	China
Foreign [member] | KOBRASCO [member]
Disclosure of joint ventures [line items]
Category of business	Steel materials manufacturing and sales
Ownership (%)	50.00%	50.00%
Region	Brazil
Foreign [member] | DMSA/AMSA [member]
Disclosure of joint ventures [line items]
Category of business	Energy & resource development
Ownership (%)	4.00%	4.00%
Region	Madagascar
Foreign [member] | PT. POSMI Steel Indonesia [member]
Disclosure of joint ventures [line items]
Category of business	Steel processing and sales
Ownership (%)	36.69%	36.69%
Region	Indonesia
Foreign [member] | VNS-DAEWOO Co., Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Steel scrap processing and sale
Ownership (%)	40.00%	40.00%
Region	Vietnam
Foreign [member] | YULCHON MEXICO S.A. DE C.V. [member]
Disclosure of joint ventures [line items]
Category of business	Tube for automobile manufacturing
Ownership (%)	19.00%	19.00%
Region	Mexico
Foreign [member] | POSCO-SAMSUNG-Slovakia Processing Center [member]
Disclosure of joint ventures [line items]
Category of business	Steel processing and sales
Ownership (%)	30.00%	30.00%
Region	Slovakia
Foreign [member] | United Spiral Pipe, LLC [member]
Disclosure of joint ventures [line items]
Category of business	Material manufacturing and sales
Ownership (%)	35.00%	35.00%
Region	USA
Foreign [member] | Korea Siberia Wood CJSC [member]
Disclosure of joint ventures [line items]
Category of business	Forest resource development
Ownership (%)	50.00%	50.00%
Region	Russia
Foreign [member] | Hyunson Engineering & Construction HYENCO [member]
Disclosure of joint ventures [line items]
Category of business	Construction
Ownership (%)	4.90%	4.90%
Region	Algeria
Foreign [member] | USS-POSCO Industries [member]
Disclosure of joint ventures [line items]
Category of business	Cold-rolled steel manufacturing and sales
Ownership (%)	50.00%	50.00%
Region	USA
Foreign [member] | POSCO E&C Saudi Arabia [member]
Disclosure of joint ventures [line items]
Category of business	Civil engineering and construction
Ownership (%)	40.00%	40.00%
Region	Saudi Arabia
Foreign [member] | POSCO(Suzhou) Automotive Processing Center Co., Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Automotive parts manufacturing
Ownership (%)	19.90%
Region	China
Foreign [member] | POSCO(Yantai)Automotive Processing Center Co., Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Automotive parts manufacturing
Ownership (%)	11.06%
Region	China
Foreign [member] | POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD [member]
Disclosure of joint ventures [line items]
Category of business	Automotive parts manufacturing
Ownership (%)	13.00%
Region	China
Foreign [member] | POS INFRA AUTO [member]
Disclosure of joint ventures [line items]
Category of business	Automotive parts manufacturing
Ownership (%)	16.20%
Region	China
Foreign [member] | Kwanika Copper Corporation [Member]
Disclosure of joint ventures [line items]
Category of business	Energy & resource development
Ownership (%)	35.00%
Region	Canada
Foreign [member] | Henan Tsingpu Ferro Alloy Co., Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Raw material manufacturing and sales
Ownership (%)		49.00%
Region	China
Foreign [member] | Zhangjiagang Pohang Refractories Co., Ltd. [member]
Disclosure of joint ventures [line items]
Category of business	Refractory manufacturing
Ownership (%)		50.00%
Region	China

XML

General Information - Consolidated Subsidiaries Acquired or Newly Established (Detail)	12 Months Ended
	Dec. 31, 2017
POSCO RU Limited Liability Company [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-01
Ownership (%)	100.00%
Reason	New establishment
Golden Lace DAEWOO Company Limited [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-04
Ownership (%)	100.00%
Reason	New establishment
POSCO Research & Technology [Member]
Disclosure of subsidiaries [line items]
Date of addition	2017-06
Ownership (%)	100.00%
Reason	New establishment
POSCO DAEWOO UKRAINE LLC [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-07
Ownership (%)	100.00%
Reason	New establishment
Zhangjigang Pohang Port Co., Ltd. [Member]
Disclosure of subsidiaries [line items]
Date of addition	2017-07
Ownership (%)	51.00%
Reason	Reclassification from associate
Professional Private Equity Trust W-2 [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-10
Ownership (%)	97.47%
Reason	Acquisition of control
Professional Private Equity Trust [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-10
Ownership (%)	99.01%
Reason	Acquisition of control
Professional Private Equity Trust W-5 [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-11
Ownership (%)	99.67%
Reason	Acquisition of control
KIS Devonian Canada Corporation [member]
Disclosure of subsidiaries [line items]
Date of addition	2017-12
Ownership (%)	100.00%
Reason	Acquisition of control

XML

General Information - Subsidiaries That Were Excluded From Consolidation (Detail)	12 Months Ended
	Dec. 31, 2017
POSCO MAPC SA DE CV [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-01
Reason	Merged into POSCO MPPC S.A. de C.V.
POSCO (Zhangjiagang) STS Processing Center Co., Ltd [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-01
Reason	Merged into Zhangjiagang Pohang Stainless Steel Co., Ltd.
POSCO Engineering CO., Ltd. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-02
Reason	Merged into POSCO ENGINEERING & CONSTRUCTION CO., LTD.
POSCO YongXin Rare Earth Metal Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI S.A. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
EPC EQUITIES LLP [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI Guatemala S.A. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
COINSA INGENIERIA Y PETROQUIMICA S.R.L [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI CONSTRUCTION TRADING LLP [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI INC. USA [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI ENGENHARIA E CONSTRUCOES LTDA [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI PERU S.A. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI CONSTRUCCIONES S.A. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
GENTECH INTERNATIONAL INC. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
SANTOS CMI CONSTRUCCIONES DE CHILE S.A. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
COMPANIADEAUTOMATIZACION &CONTROL, GENESYS S.A. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Disposal
POSCO Electrical Steel India Private Limited [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-03
Reason	Merged into POSCO Maharashtra Steel Private Limited
POSEC Hawaii, Inc. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-05
Reason	Exclusion upon liquidation
PT. POSCO MTECH INDONESIA [Member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-05
Reason	Disposal
POSCO Vietnam Holdings Co., LTD. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-07
Reason	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
POSCO-Vietnam Processing Center Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-07
Reason	Merged into POSCO VIETNAM HOLDINGS CO., LTD (formerly, POSCO-VNPC CO., LTD.)
Yingkou Puxiang Trade Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-07
Reason	Merged into Zhangjiagang Pohang Refractories Co., Ltd
Chongqing POSCO CISL Automotive Steel Co., Ltd. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-09
Reason	Loss of control
IT Engineering CO. Ltd [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-11
Reason	Disposal
POSCO India Delhi Steel Processing Center Private Limited [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-11
Reason	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
POSCO India Ahmedabad Steel Processing Center Pvt.Ltd. [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-11
Reason	Merged into POSCO India Chennai Steel Processing Center Pvt.Ltd.
Kwanika Copper Corporation [Member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-11
Reason	Change in status due to a decline in stake
USA-SRDC [member]
Disclosure of subsidiaries [line items]
Date of exclusion	2017-12
Reason	Exclusion upon liquidation

XML

Summary of Significant Accounting Policies - Estimated Useful Lives of Property, Plant and Equipment (Detail)	12 Months Ended
	Dec. 31, 2017
Bottom of range [member] | Buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	3 years
Bottom of range [member] | Structures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	4 years
Bottom of range [member] | Machinery and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	4 years
Bottom of range [member] | Vehicles [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	3 years
Bottom of range [member] | Tools [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	3 years
Bottom of range [member] | Furniture and fixtures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	3 years
Bottom of range [member] | Finance lease assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	3 years
Top of range [member] | Buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	50 years
Top of range [member] | Structures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	50 years
Top of range [member] | Machinery and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	25 years
Top of range [member] | Vehicles [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	20 years
Top of range [member] | Tools [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	10 years
Top of range [member] | Furniture and fixtures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	20 years
Top of range [member] | Finance lease assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	30 years
Top of range [member] | Bearer plants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives	20 years

XML

Summary of Significant Accounting Policies - Estimated Useful Lives of Intangible Assets (Detail)	12 Months Ended
	Dec. 31, 2017
Intellectual property rights [member] | Bottom of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	4 years
Intellectual property rights [member] | Top of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	25 years
Development costs [member] | Bottom of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	3 years
Development costs [member] | Top of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	5 years
Port facilities usage rights [member] | Bottom of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	4 years
Port facilities usage rights [member] | Top of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	75 years
Other intangible assets [member] | Bottom of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	2 years
Other intangible assets [member] | Top of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Estimated useful lives of intangible assets	15 years

XML

Summary of Significant Accounting Policies - Summary of New Standards and Interpretations Not Yet Adopted (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of expected impact of initial application of new standards or interpretations [line items]
Reserves	₩ (682,556)	₩ (143,985)
Retained earnings	42,974,658	41,125,712
Non-controllinginterests	3,666,334	3,430,441
Total equity	47,326,725	₩ 45,765,269	₩ 45,013,201	₩ 45,257,396
Previously stated [member]
Disclosure of expected impact of initial application of new standards or interpretations [line items]
Reserves	(682,556)
Retained earnings	42,974,658
Non-controllinginterests	3,666,334
Total equity	45,958,436
Increase (decrease) due to application of IFRS 9 [member]
Disclosure of expected impact of initial application of new standards or interpretations [line items]
Reserves	(401,344)
Retained earnings	368,612
Non-controllinginterests	(19,545)
Total equity	(52,277)
Increase (decrease) due to application of IFRS 15 [member]
Disclosure of expected impact of initial application of new standards or interpretations [line items]
Retained earnings	(71,066)
Non-controllinginterests	(59,060)
Total equity	(130,126)
Currently Stated [member]
Disclosure of expected impact of initial application of new standards or interpretations [line items]
Reserves	(1,083,900)
Retained earnings	43,272,204
Non-controllinginterests	3,587,729
Total equity	₩ 45,776,033

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - KRW (₩) ₩ in Millions	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of summary of significant accounting policies [Line Items]
Loans and receivables		₩ 21,268,107	₩ 19,277,709
Held-to-maturity financial assets		5,211	2,470
Available-for-sale financial assets		1,978,115	2,514,924
Financial assets at fair value through profit or loss		67,021
Equity investment that is classified as available-for-sale		56,782	73,108
Reserves		(682,556)	(143,985)
Retained earnings		42,974,658	41,125,712
Non-controlling interests		3,666,334	₩ 3,430,441
Increase (decrease) due to application of IFRS 9 [member]
Disclosure of summary of significant accounting policies [Line Items]
Reserves		(401,344)
Retained earnings		368,612
Non-controlling interests		(19,545)
Increase (decrease) due to application of IFRS 15 [member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings		(71,066)
Non-controlling interests		(59,060)
Equity investments [member]
Disclosure of summary of significant accounting policies [Line Items]
Equity investment that is classified as available-for-sale		₩ 1,730,753
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 9 [member] | Financial assets impaired [member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	₩ (32,732)
Increase in loss allowance	66,637
Non-controlling interests	(19,545)
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 15 [member] | Construction Revenue [Member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	(949)
Non-controlling interests	(156)
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 15 [member] | Shipping And handling [Member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	452
Non-controlling interests	628
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 15 [member] | Sales [Member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	(2,773)
Non-controlling interests	88
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 15 [member] | Manufacturing Services Revenue [Member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	(1,188)
Non-controlling interests	(1,115)
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 15 [member] | Cost of sales [member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	(2,855)
Non-controlling interests	(1,512)
Increase (decrease) due to changes in accounting policy [member] | Increase (decrease) due to application of IFRS 15 [member] | Construction costs [Member]
Disclosure of summary of significant accounting policies [Line Items]
Retained earnings	(63,753)
Non-controlling interests	(56,993)
Increase (decrease) due to changes in accounting policy [member] | Equity investments [member] | Increase (decrease) due to application of IFRS 9 [member]
Disclosure of summary of significant accounting policies [Line Items]
Reserves	(401,344)
Retained earnings	₩ 401,344

XML

Financial Risk Management - Net Borrowing-to-Equity Ratio (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of nature and extent of risks arising from financial instruments [abstract]
Total borrowings	₩ 21,063,657	₩ 22,704,998
Less: Cash and cash equivalents	2,612,530	2,447,619
Net borrowings	18,451,127	20,257,379
Total equity	₩ 47,326,725	₩ 45,765,269	₩ 45,013,201	₩ 45,257,396
Net borrowings-to-equity ratio	38.99%	44.26%

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Cash and Cash Equivalents - Summary of Cash and Cash Equivalents (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Cash and cash equivalents [abstract]
Cash	₩ 1,896	₩ 11,960
Demand deposits and checking accounts	1,259,813	1,312,426
Time deposits	360,985	254,888
Other cash equivalents	989,836	868,345
Cash and cash equivalents	₩ 2,612,530	₩ 2,447,619

XML

Cash and Cash Equivalents - Summary of Cash and Cash Equivalents (Parenthetical) (Detail) ₩ in Millions	Dec. 31, 2017 KRW (₩)
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of Cash and Cash Equivalents [Line Items]
Cash equivalents, restricted	₩ 36,302

XML

Trade Accounts and Notes Receivable - Summary of Trade Accounts and Notes Receivables (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Current trade accounts and notes receivable	₩ 8,824,563	₩ 9,674,026
Non-current
Non-current trade accounts and notes receivable	731,570	51,124
Gross amount [member]
Current
Trade accounts and notes receivable	8,579,620	9,320,915
Finance lease receivables	10,469	10,300
Unbilled due from customers for contract work	728,007	860,287
Non-current
Trade accounts and notes receivable	871,432	80,447
Finance lease receivables	734	11,326
Allowance for credit losses [member]
Current
Current trade accounts and notes receivable	(493,533)	(517,476)
Non-current
Non-current trade accounts and notes receivable	₩ (140,596)	₩ (40,649)

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Trade Accounts and Notes Receivable - Additional Information (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Trade accounts and notes receivables, net [member]
Disclosure of financial assets [line items]
Trade accounts and notes receivable sold to financial institutions, for which the derecognition conditions were not met	₩ 309,964	₩ 344,410

XML

Trade Accounts and Notes Receivable - Finance Lease Receivables (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of finance lease and operating lease by lessor [line items]
Finance lease receivables	₩ 11,203	₩ 21,626
Korea electric power corporation [member]
Disclosure of finance lease and operating lease by lessor [line items]
Finance lease receivables	10,469	20,648
KC Chemicals CORP [member]
Disclosure of finance lease and operating lease by lessor [line items]
Finance lease receivables		244
Hystech.Co. Ltd. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Finance lease receivables	₩ 734	₩ 734

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Trade Accounts and Notes Receivable - Gross Amount and Present Value of Minimum Lease Payments (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of finance lease and operating lease by lessor [line items]
Unrealized interest income	₩ (1,396)	₩ (4,035)
Present value of minimum lease payment	11,203	21,626
Less than 1 year [member]
Disclosure of finance lease and operating lease by lessor [line items]
Gross amount of lease payment	11,771	13,114
1 year - 5 years [member]
Disclosure of finance lease and operating lease by lessor [line items]
Gross amount of lease payment	₩ 828	₩ 12,547

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Other Receivables - Summary of Other Receivables (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Other current receivables	₩ 1,636,006	₩ 1,539,742
Non-current
Other non-current receivables	879,176	762,912
Gross amount [member]
Current
Loans	617,696	421,818
Other accounts receivable	960,543	1,131,492
Accrued income	179,971	139,618
Deposits	107,137	93,891
Others	18,925	13,606
Non-current
Loans	874,158	733,974
Other accounts receivable	92,939	81,938
Accrued income	1,663	1,746
Deposits	122,485	104,217
Allowance for credit losses [member]
Current
Other current receivables	(248,266)	(260,683)
Non-current
Other non-current receivables	₩ (212,069)	₩ (158,963)

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Other Financial Assets - Summary of Other Financial Assets (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Derivatives assets held for trading	₩ 63,912	₩ 49,281
Financial assets held for trading	1,970
Current portion of held-to-maturity securities	421	422
Short-term financial instruments	6,843,436	5,172,256
Other current financial assets	7,045,880	5,224,911
Non-current
Available-for-sale securities	56,782	73,108
Held-to-maturity securities	4,790	2,048
Long-term financial instruments	60,542	45,371
Other non current financial assets	1,911,684	2,657,692
Debt instruments [member]
Current
Available-for-sale securities	136,141	2,952
Non-current
Available-for-sale securities	1,730,753	2,392,534
Equity investments [member]
Non-current
Derivatives assets held for trading	4,378	98,301
Available-for-sale securities	1,730,753
Others [member]
Non-current
Available-for-sale securities	₩ 54,439	₩ 46,330

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Other Financial Assets - Summary of Other Financial Assets (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of financial assets [line items]
Impairment losses recognized in profit or loss	₩ 123,214	₩ 248,404	₩ 142,781
Government [member]
Disclosure of financial assets [line items]
Financial instruments restricted for use	10,080	6,813
Financial arrangements, pledge and others [member]
Disclosure of financial assets [line items]
Financial instruments restricted for use	78,477	82,008
Available-for-sale financial assets [member]
Disclosure of financial assets [line items]
Impairment losses recognized in profit or loss	123,214	248,404
Available-for-sale securities, respectively, have been provided as collateral for borrowings, construction projects and others	₩ 136,099	₩ 123,220

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Inventories - Summary of Inventories (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of inventories [Line Items]
Inventories	₩ 10,793,781	₩ 9,515,895
Gross amount [member]
Disclosure of inventories [Line Items]
Finished goods	1,526,628	1,200,344
Merchandise	930,558	851,325
Semi-finished goods	1,721,130	1,552,988
Raw materials	2,329,268	1,939,539
Fuel and materials	808,016	817,397
Construction inventories	1,692,092	1,455,115
Materials-in-transit	1,818,576	1,807,816
Others	103,144	94,535
Inventories	10,929,412	9,719,059
Allowance for inventories valuation [member]
Disclosure of inventories [Line Items]
Inventories	₩ (135,631)	₩ (203,164)

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Inventories - Changes of Allowance for Inventories Valuation (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Classes of current inventories [abstract]
Allowance for inventories valuation, beginning balance	₩ 203,164	₩ 231,378	₩ 161,940
Loss on valuation of inventories	78,560	152,249	152,952
Realization on disposal of inventories	(138,967)	(161,458)	(77,102)
Others	(7,126)	(19,005)	(6,412)
Allowance for inventories valuation, ending balance	₩ 135,631	₩ 203,164	₩ 231,378

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Assets Held for Sale - Details of Assets Held For Sale and Related Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Assets
Property, plant and equipment	₩ 31,883,535	₩ 33,770,339	₩ 34,522,855
Assets held for sale	71,768	311,958
Assets held for sale and related liabilities [member]
Assets
Property, plant and equipment	71,732	306,628
Others	36	5,330
Posco [member]
Assets
Assets held for sale	392	764
Posco [member] | Assets held for sale and related liabilities [member]
Assets
Property, plant and equipment	392	764
Subsidiaries [member]
Assets
Assets held for sale	71,376	311,194
Subsidiaries [member] | Assets held for sale and related liabilities [member]
Assets
Property, plant and equipment	71,340	305,864
Others	₩ 36	₩ 5,330

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Assets Held for Sale - Details of Assets Held For Sale and Related Liabilities (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Assets and liabilities held for sale [Line Items]
Property, plant and equipment	₩ 31,883,535	₩ 33,770,339	₩ 34,522,855
Assets held for sale and related liabilities [member]
Assets and liabilities held for sale [Line Items]
Property, plant and equipment	71,732	₩ 306,628
Assets held for sale and related liabilities [member] | POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Assets and liabilities held for sale [Line Items]
Property, plant and equipment	₩ 71,340

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Investments in Associates and Joint Ventures - Summary of Investments in Associates and Joint Ventures (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Investments in subsidiaries, joint ventures and associates [abstract]
Investments in associates	₩ 1,520,441	₩ 1,595,441
Investments in joint ventures	2,037,491	2,286,948
Investments in associates and joint ventures	₩ 3,557,932	₩ 3,882,389	₩ 3,945,333

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Investments in Associates and Joint Ventures - Details of Investments in Associates (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩) Companies shares	Dec. 31, 2016 KRW (₩)
Disclosure of associates [line items]
Investments in associates	₩ 1,520,441	₩ 1,595,441
Domestic [member]
Disclosure of associates [line items]
Investments in associates	₩ 634,636	₩ 615,159
Domestic [member] | EQP POSCO Global No1 Natural Resources PEF [member]
Disclosure of associates [line items]
Number of shares | shares	178,713,975,892
Ownership (%)	31.14%	29.37%
Investments in associates	₩ 175,553	₩ 175,690
Domestic [member] | SNNC [member]
Disclosure of associates [line items]
Number of shares | shares	18,130,000
Ownership (%)	49.00%	49.00%
Investments in associates	₩ 110,424	₩ 107,859
Domestic [member] | QSONE Co.,Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	200,000
Ownership (%)	50.00%	50.00%
Investments in associates	₩ 85,049	₩ 84,799
Domestic [member] | Chuncheon Energy Co., Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	16,098,143
Ownership (%)	45.67%	29.90%
Investments in associates	₩ 74,378	₩ 45,077
Domestic [member] | Incheon-Gimpo Expressway Co., Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	9,032,539
Ownership (%)	18.26%	20.04%
Investments in associates	₩ 31,660	₩ 37,372
Domestic [member] | Blue Ocean Private Equity Fund [member]
Disclosure of associates [line items]
Number of shares | shares	333
Ownership (%)	27.52%	27.52%
Investments in associates	₩ 19,620	₩ 35,752
Domestic [member] | Chungju Enterprise City Development Co.,Ltd [member]
Disclosure of associates [line items]
Number of shares | shares	2,008,000
Ownership (%)	29.53%	29.53%
Investments in associates	₩ 17,252	₩ 12,551
Domestic [member] | UITrans LRT Co., Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	7,714,380
Ownership (%)	38.19%	38.19%
Investments in associates	₩ 15,841	₩ 17,851
Domestic [member] | Daesung Steel [member]
Disclosure of associates [line items]
Number of shares | shares	108,038
Ownership (%)	17.54%	17.54%
Investments in associates	₩ 15,500	₩ 12,302
Domestic [member] | KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund [member]
Disclosure of associates [line items]
Number of shares | shares	6,485
Ownership (%)	12.50%	12.50%
Investments in associates	₩ 6,828	₩ 11,890
Domestic [member] | KONES, Corp. [member]
Disclosure of associates [line items]
Number of shares | shares	3,250,000
Ownership (%)	41.67%	41.67%
Investments in associates	₩ 2,827	₩ 5,641
Domestic [member] | Other associates [member]
Disclosure of associates [line items]
Number of companies in other associates | Companies	35
Investments in associates	₩ 67,325	55,061
Domestic [member] | Keystone-HYUNDAI SECURITIES NO. 1. Private Equity Fund [member]
Disclosure of associates [line items]
Number of shares | shares	13,800,000
Ownership (%)	40.45%
Investments in associates	₩ 12,379	13,314
Domestic [member] | Acquisition cost [member] | EQP POSCO Global No1 Natural Resources PEF [member]
Disclosure of associates [line items]
Investments in associates	178,787
Domestic [member] | Acquisition cost [member] | SNNC [member]
Disclosure of associates [line items]
Investments in associates	90,650
Domestic [member] | Acquisition cost [member] | QSONE Co.,Ltd. [member]
Disclosure of associates [line items]
Investments in associates	84,395
Domestic [member] | Acquisition cost [member] | Chuncheon Energy Co., Ltd. [member]
Disclosure of associates [line items]
Investments in associates	80,491
Domestic [member] | Acquisition cost [member] | Incheon-Gimpo Expressway Co., Ltd. [member]
Disclosure of associates [line items]
Investments in associates	45,163
Domestic [member] | Acquisition cost [member] | Blue Ocean Private Equity Fund [member]
Disclosure of associates [line items]
Investments in associates	33,300
Domestic [member] | Acquisition cost [member] | Chungju Enterprise City Development Co.,Ltd [member]
Disclosure of associates [line items]
Investments in associates	10,040
Domestic [member] | Acquisition cost [member] | UITrans LRT Co., Ltd. [member]
Disclosure of associates [line items]
Investments in associates	38,572
Domestic [member] | Acquisition cost [member] | Daesung Steel [member]
Disclosure of associates [line items]
Investments in associates	14,000
Domestic [member] | Acquisition cost [member] | KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund [member]
Disclosure of associates [line items]
Investments in associates	6,485
Domestic [member] | Acquisition cost [member] | KONES, Corp. [member]
Disclosure of associates [line items]
Investments in associates	6,893
Domestic [member] | Acquisition cost [member] | Keystone-HYUNDAI SECURITIES NO. 1. Private Equity Fund [member]
Disclosure of associates [line items]
Investments in associates	13,800
Foreign [member]
Disclosure of associates [line items]
Investments in associates	₩ 885,805	980,282
Foreign [member] | Other associates [member]
Disclosure of associates [line items]
Number of companies in other associates | Companies	26
Investments in associates	₩ 111,497	₩ 98,320
Foreign [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	135,219,000
Ownership (%)	25.04%	25.04%
Investments in associates	₩ 197,069	₩ 215,996
Foreign [member] | AES-VCM Mong Duong Power Company Limited [member]
Disclosure of associates [line items]
Ownership (%)	30.00%	30.00%
Investments in associates	₩ 142,348	₩ 167,141
Foreign [member] | 7623704 Canada Inc. [member]
Disclosure of associates [line items]
Number of shares | shares	114,452,000
Ownership (%)	10.40%	10.40%
Investments in associates	₩ 121,702	₩ 137,512
Foreign [member] | Eureka Moly LLC [member]
Disclosure of associates [line items]
Ownership (%)	20.00%	20.00%
Investments in associates	₩ 79,398	₩ 89,601
Foreign [member] | AMCI (WA) PTY LTD [member]
Disclosure of associates [line items]
Number of shares | shares	49
Ownership (%)	49.00%	49.00%
Investments in associates	₩ 63,378	₩ 70,501
Foreign [member] | Nickel mining company SAS [member]
Disclosure of associates [line items]
Number of shares | shares	3,234,698
Ownership (%)	49.00%	49.00%
Investments in associates	₩ 45,905	₩ 45,138
Foreign [member] | NCR LLC [member]
Disclosure of associates [line items]
Ownership (%)	29.41%	29.41%
Investments in associates	₩ 33,738	₩ 36,738
Foreign [member] | Korea LNG Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	2,400
Ownership (%)	20.00%	20.00%
Investments in associates	₩ 33,422	₩ 63,058
Foreign [member] | PT. batutua tembaga raya [member]
Disclosure of associates [line items]
Number of shares | shares	128,285
Ownership (%)	22.00%	24.10%
Investments in associates	₩ 21,823	₩ 22,723
Foreign [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of associates [line items]
Number of shares | shares	10,200,000
Ownership (%)	34.00%	34.00%
Investments in associates	₩ 15,617	₩ 18,008
Foreign [member] | PT. wampu electric power [member]
Disclosure of associates [line items]
Number of shares | shares	8,708,400
Ownership (%)	20.00%	20.00%
Investments in associates	₩ 13,391	₩ 8,706
Foreign [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of associates [line items]
Number of shares | shares	50
Ownership (%)	25.00%	25.00%
Investments in associates	₩ 6,517	₩ 6,840
Foreign [member] | Acquisition cost [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of associates [line items]
Investments in associates	150,779
Foreign [member] | Acquisition cost [member] | AES-VCM Mong Duong Power Company Limited [member]
Disclosure of associates [line items]
Investments in associates	164,303
Foreign [member] | Acquisition cost [member] | 7623704 Canada Inc. [member]
Disclosure of associates [line items]
Investments in associates	124,341
Foreign [member] | Acquisition cost [member] | Eureka Moly LLC [member]
Disclosure of associates [line items]
Investments in associates	240,123
Foreign [member] | Acquisition cost [member] | AMCI (WA) PTY LTD [member]
Disclosure of associates [line items]
Investments in associates	209,664
Foreign [member] | Acquisition cost [member] | Nickel mining company SAS [member]
Disclosure of associates [line items]
Investments in associates	157,585
Foreign [member] | Acquisition cost [member] | NCR LLC [member]
Disclosure of associates [line items]
Investments in associates	37,634
Foreign [member] | Acquisition cost [member] | Korea LNG Ltd. [member]
Disclosure of associates [line items]
Investments in associates	135,205
Foreign [member] | Acquisition cost [member] | PT. batutua tembaga raya [member]
Disclosure of associates [line items]
Investments in associates	21,824
Foreign [member] | Acquisition cost [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of associates [line items]
Investments in associates	9,517
Foreign [member] | Acquisition cost [member] | PT. wampu electric power [member]
Disclosure of associates [line items]
Investments in associates	10,054
Foreign [member] | Acquisition cost [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of associates [line items]
Investments in associates	₩ 4,723

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Investments in Associates and Joint Ventures - Details of Investments in Associates (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of associates [abstract]
Investment in associates provided as collateral for borrowings	₩ 158,370	₩ 124,963

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Investments in Associates and Joint Ventures - Details of Investments in Joint Ventures (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩) Companies shares	Dec. 31, 2016 KRW (₩)
Disclosure of joint ventures [line items]
Investments in joint ventures	₩ 2,037,491	₩ 2,286,948
Foreign [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	₩ 116,854	83,113
Foreign [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of joint ventures [line items]
Number of shares | shares	11,568,000
Ownership (%)	60.00%
Investments in joint ventures	₩ 110,760	₩ 83,113
Foreign [member] | Other joint ventures [member]
Disclosure of joint ventures [line items]
Number of companies in other joint ventures | Companies	5
Investments in joint ventures	₩ 6,094
Foreign [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of joint ventures [line items]
Ownership (%)	12.50%	12.50%
Foreign [member] | POSCO-NPS Niobium LLC [member]
Disclosure of joint ventures [line items]
Ownership (%)	50.00%	50.00%
Foreign [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of joint ventures [line items]
Ownership (%)	20.00%	20.00%
Foreign [member] | KOBRASCO [member]
Disclosure of joint ventures [line items]
Ownership (%)	50.00%	50.00%
Foreign [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of joint ventures [line items]
Ownership (%)	25.00%	25.00%
Foreign [member] | DMSA/AMSA [member]
Disclosure of joint ventures [line items]
Ownership (%)	4.00%	4.00%
Foreign [member] | Acquisition cost [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	₩ 115,680
Domestic [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	₩ 1,920,637	₩ 2,203,835
Domestic [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of joint ventures [line items]
Ownership (%)	60.00%	60.00%
Domestic [member] | Other joint ventures [member]
Disclosure of joint ventures [line items]
Number of companies in other joint ventures | Companies	14
Investments in joint ventures	₩ 46,716	₩ 32,331
Domestic [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of joint ventures [line items]
Number of shares | shares	13,117,972
Ownership (%)	12.50%
Investments in joint ventures	₩ 1,125,133	1,186,859
Domestic [member] | POSCO-NPS Niobium LLC [member]
Disclosure of joint ventures [line items]
Number of shares | shares	325,050,000
Ownership (%)	50.00%
Investments in joint ventures	₩ 348,836	393,570
Domestic [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of joint ventures [line items]
Number of shares | shares	1,108,696,532
Ownership (%)	20.00%
Investments in joint ventures	₩ 146,427	330,463
Domestic [member] | KOBRASCO [member]
Disclosure of joint ventures [line items]
Number of shares | shares	2,010,719,185
Ownership (%)	50.00%
Investments in joint ventures	₩ 108,485	88,308
Domestic [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of joint ventures [line items]
Ownership (%)	25.00%
Investments in joint ventures	₩ 88,305	97,369
Domestic [member] | DMSA/AMSA [member]
Disclosure of joint ventures [line items]
Ownership (%)	4.00%
Investments in joint ventures	₩ 56,735	₩ 74,935
Domestic [member] | Acquisition cost [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	1,528,672
Domestic [member] | Acquisition cost [member] | POSCO-NPS Niobium LLC [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	364,609
Domestic [member] | Acquisition cost [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	558,821
Domestic [member] | Acquisition cost [member] | KOBRASCO [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	32,950
Domestic [member] | Acquisition cost [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	61,961
Domestic [member] | Acquisition cost [member] | DMSA/AMSA [member]
Disclosure of joint ventures [line items]
Investments in joint ventures	₩ 304,623

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Investments in Associates and Joint Ventures - Movements of Investments in Associates and Joint Ventures (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩) Companies	Dec. 31, 2016 KRW (₩) Companies	Dec. 31, 2015 KRW (₩)
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	₩ 3,882,389	₩ 3,945,333
Acquisition	92,336	198,394
Dividends	(131,710)	(111,622)
Share of profits (losses)	10,540	(88,677)	₩ (506,054)
Other increase (decrease)	(295,623)	(61,039)
Book value, ending balance	3,557,932	3,882,389	3,945,333
Domestic [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	698,272	1,091,334
Acquisition	56,139	48,807
Dividends	(505)	(200)
Share of profits (losses)	11,918	(234,748)
Other increase (decrease)	(14,334)	(206,921)
Book value, ending balance	751,490	698,272	1,091,334
Domestic [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	83,113	104,970
Share of profits (losses)	27,582	(21,929)
Other increase (decrease)	65	72
Book value, ending balance	110,760	83,113	104,970
Domestic [member] | POSCO ES MATERIALS CO., LTD. [Member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance		38,447
Share of profits (losses)		(2,061)
Other increase (decrease)		(36,386)
Book value, ending balance			38,447
Domestic [member] | EQP POSCO Global No1 Natural Resources PEF [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	175,690	175,676
Acquisition		222
Share of profits (losses)	418	(399)
Other increase (decrease)	(555)	191
Book value, ending balance	175,553	175,690	175,676
Domestic [member] | SNNC [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	107,859	111,326
Share of profits (losses)	2,370	(3,417)
Other increase (decrease)	195	(50)
Book value, ending balance	110,424	107,859	111,326
Domestic [member] | QSONE Co.,Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	84,799	83,919
Dividends	(368)
Share of profits (losses)	618	880
Book value, ending balance	85,049	84,799	83,919
Domestic [member] | Chuncheon Energy Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	45,077	30,420
Acquisition	27,791	19,832
Share of profits (losses)	1,510	(5,175)
Book value, ending balance	74,378	45,077	30,420
Domestic [member] | Incheon-Gimpo Expressway Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	37,372	39,447
Share of profits (losses)	(6,463)	(2,758)
Other increase (decrease)	751	683
Book value, ending balance	31,660	37,372	39,447
Domestic [member] | Blue Ocean Private Equity Fund [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	35,752	35,437
Share of profits (losses)	(8,154)	643
Other increase (decrease)	(7,978)	(328)
Book value, ending balance	19,620	35,752	35,437
Domestic [member] | Chungju Enterprise City Development Co.,Ltd [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	12,551	12,265
Share of profits (losses)	4,701	286
Book value, ending balance	17,252	12,551	12,265
Domestic [member] | UITrans LRT Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	17,851	40,903
Acquisition		6,817
Share of profits (losses)	(2,010)	(29,825)
Other increase (decrease)		(44)
Book value, ending balance	15,841	17,851	40,903
Domestic [member] | Daesung Steel [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	12,302	14,000
Share of profits (losses)	3,198	(2,272)
Other increase (decrease)		574
Book value, ending balance	15,500	12,302	14,000
Domestic [member] | Keystone NO. 1. Private Equity Fund [Member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	13,314	13,015
Share of profits (losses)	(886)	281
Other increase (decrease)	(49)	18
Book value, ending balance	12,379	13,314	13,015
Domestic [member] | KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	11,890	14,829
Acquisition		1,875
Share of profits (losses)	(197)	1,186
Other increase (decrease)	(4,865)	(6,000)
Book value, ending balance	6,828	11,890	14,829
Domestic [member] | KONES, Corp. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	5,641	5,775
Share of profits (losses)	(2,774)	(256)
Other increase (decrease)	(40)	122
Book value, ending balance	₩ 2,827	5,641	5,775
Domestic [member] | POSCO PLANTEC Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance		171,218
Share of profits (losses)		(171,927)
Other increase (decrease)		709
Book value, ending balance			171,218
Domestic [member] | SeAH Changwon Integrated Special Steel [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance		165,754
Share of profits (losses)		4,797
Other increase (decrease)		₩ (170,551)
Book value, ending balance			165,754
Domestic [member] | Other associates and joint ventures [member]
Disclosure of investments in associates and joint ventures [Line Items]
Number of companies in other associates and joint ventures | Companies	40	33
Book value, beginning balance	₩ 55,061	₩ 33,933
Acquisition	28,348	20,061
Dividends	(137)	(200)
Share of profits (losses)	(7,995)	(2,802)
Other increase (decrease)	(1,858)	4,069
Book value, ending balance	73,419	55,061	33,933
Foreign [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	3,184,117	2,853,999
Acquisition	36,197	149,587
Dividends	(131,205)	(111,422)
Share of profits (losses)	(1,378)	146,071
Other increase (decrease)	(281,289)	145,882
Book value, ending balance	2,806,442	3,184,117	2,853,999
Foreign [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	1,186,859	1,153,434
Share of profits (losses)	46,020	12,643
Other increase (decrease)	(107,746)	20,782
Book value, ending balance	1,125,133	1,186,859	1,153,434
Foreign [member] | POSCO-NPS Niobium LLC [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	393,570	381,461
Dividends	(17,277)	(10,893)
Share of profits (losses)	17,173	11,499
Other increase (decrease)	(44,630)	11,503
Book value, ending balance	348,836	393,570	381,461
Foreign [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	330,463	80,805
Acquisition		88,930
Share of profits (losses)	(147,847)	116,694
Other increase (decrease)	(36,189)	44,034
Book value, ending balance	146,427	330,463	80,805
Foreign [member] | KOBRASCO [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	88,308	78,364
Dividends	(22,135)	(29,297)
Share of profits (losses)	56,445	20,761
Other increase (decrease)	(14,133)	18,480
Book value, ending balance	108,485	88,308	78,364
Foreign [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	97,369	100,908
Dividends	(5,542)
Share of profits (losses)	1,555	258
Other increase (decrease)	(5,077)	(3,797)
Book value, ending balance	88,305	97,369	100,908
Foreign [member] | DMSA/AMSA [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	74,935	105,964
Acquisition	13,712	24,624
Share of profits (losses)	(22,339)	(60,415)
Other increase (decrease)	(9,573)	4,762
Book value, ending balance	₩ 56,735	₩ 74,935	105,964
Foreign [member] | Other associates and joint ventures [member]
Disclosure of investments in associates and joint ventures [Line Items]
Number of companies in other associates and joint ventures | Companies	40	37
Book value, beginning balance	₩ 130,651	₩ 67,273
Acquisition	22,209	28,993
Dividends	(4,408)	(4,252)
Share of profits (losses)	46,535	(791)
Other increase (decrease)	(36,774)	39,428
Book value, ending balance	158,213	130,651	67,273
Foreign [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	215,996	222,269
Dividends	(37,016)	(59,717)
Share of profits (losses)	42,896	46,855
Other increase (decrease)	(24,807)	6,589
Book value, ending balance	197,069	215,996	222,269
Foreign [member] | AES-VCM Mong Duong Power Company Limited [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	167,141	153,271
Dividends	(30,798)
Share of profits (losses)	19,644	27,031
Other increase (decrease)	(13,639)	(13,161)
Book value, ending balance	142,348	167,141	153,271
Foreign [member] | 7623704 Canada Inc. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	137,512	134,034
Dividends	(7,563)	(921)
Share of profits (losses)	7,468	175
Other increase (decrease)	(15,715)	4,224
Book value, ending balance	121,702	137,512	134,034
Foreign [member] | Eureka Moly LLC [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	89,601	87,878
Share of profits (losses)	(35)	(18)
Other increase (decrease)	(10,168)	1,741
Book value, ending balance	79,398	89,601	87,878
Foreign [member] | AMCI (WA) PTY LTD [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	70,501	72,289
Share of profits (losses)	(4,299)	(3,358)
Other increase (decrease)	(2,824)	1,570
Book value, ending balance	63,378	70,501	72,289
Foreign [member] | Nickel mining company SAS [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	45,138	76,445
Share of profits (losses)	424	(31,047)
Other increase (decrease)	343	(260)
Book value, ending balance	45,905	45,138	76,445
Foreign [member] | NCR LLC [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	36,738	35,447
Acquisition	276
Share of profits (losses)	(60)	(41)
Other increase (decrease)	(3,216)	1,332
Book value, ending balance	33,738	36,738	35,447
Foreign [member] | Korea LNG Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	63,058	53,548
Dividends	(6,466)	(6,342)
Share of profits (losses)	(70,180)	6,392
Other increase (decrease)	47,010	9,460
Book value, ending balance	33,422	63,058	53,548
Foreign [member] | PT. batutua tembaga raya [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	22,723	15,382
Acquisition		7,040
Share of profits (losses)	260
Other increase (decrease)	(1,160)	301
Book value, ending balance	21,823	22,723	15,382
Foreign [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	18,008	19,311
Share of profits (losses)	(1,268)	(412)
Other increase (decrease)	(1,123)	(891)
Book value, ending balance	15,617	18,008	19,311
Foreign [member] | PT. wampu electric power [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	8,706	8,855
Share of profits (losses)	5,927	(397)
Other increase (decrease)	(1,242)	248
Book value, ending balance	13,391	8,706	8,855
Foreign [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Book value, beginning balance	6,840	7,061
Share of profits (losses)	303	242
Other increase (decrease)	(626)	(463)
Book value, ending balance	₩ 6,517	₩ 6,840	₩ 7,061

XML

Investments in Associates and Joint Ventures - Summarized Financial Information of Associates and Joint Ventures (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of investments in associates and joint ventures [Line Items]
Assets	₩ 79,785,629	₩ 80,137,614
Liabilities	32,458,904	34,372,345
Equity (deficit)	47,326,725	45,765,269	₩ 45,013,201	₩ 45,257,396
Sales	60,186,867	52,939,771	58,522,268
Net income (loss)	2,909,311	1,032,065	₩ (116,215)
Domestic [member] | POSCO MITSUBISHI CARBON TECHNOLOGY [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	478,847	448,618
Liabilities	295,052	311,070
Equity (deficit)	183,795	137,548
Sales	154,312	53,908
Net income (loss)	46,138	(36,572)
Domestic [member] | POSCO PLANTEC Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets		501,659
Liabilities		678,004
Equity (deficit)		(176,345)
Sales		361,351
Net income (loss)		(43,195)
Domestic [member] | EQP POSCO Global No1 Natural Resources PEF [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	562,698	597,767
Liabilities	866	864
Equity (deficit)	561,832	596,903
Net income (loss)	1,261	(1,349)
Domestic [member] | SNNC [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	705,975	725,987
Liabilities	459,519	482,429
Equity (deficit)	246,456	243,558
Sales	576,023	527,101
Net income (loss)	2,417	2,022
Domestic [member] | QSONE Co.,Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	248,779	247,385
Liabilities	78,680	77,786
Equity (deficit)	170,099	169,599
Sales	15,297	15,961
Net income (loss)	1,236	1,760
Domestic [member] | Chuncheon Energy Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	700,079	547,805
Liabilities	539,137	378,613
Equity (deficit)	160,942	169,192
Sales	164,294
Net income (loss)	(8,250)	(3,748)
Domestic [member] | Incheon-Gimpo Expressway Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	1,132,233	929,539
Liabilities	922,338	718,107
Equity (deficit)	209,895	211,432
Net income (loss)	(23,221)	(1,910)
Domestic [member] | Blue Ocean Private Equity Fund [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	311,129	357,723
Liabilities	188,512	220,895
Equity (deficit)	122,617	136,828
Sales	445,238	456,311
Net income (loss)	(3,345)	2,335
Domestic [member] | Chungju Enterprise City Development Co.,Ltd [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	76,184	136,857
Liabilities	48,072	124,666
Equity (deficit)	28,112	12,191
Sales	77,093	19,028
Net income (loss)	15,921	967
Domestic [member] | UITrans LRT Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	464,074	400,761
Liabilities	384,202	307,625
Equity (deficit)	79,872	93,136
Sales	3,689
Net income (loss)	(13,263)	(822)
Domestic [member] | Daesung Steel [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	169,774	150,944
Liabilities	112,795	112,194
Equity (deficit)	56,979	38,750
Sales	70,434	60,772
Net income (loss)	18,230	(12,955)
Domestic [member] | Keystone NO. 1. Private Equity Fund [Member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	170,155	119,378
Liabilities	133,033	79,946
Equity (deficit)	37,122	39,432
Sales	5,391	197
Net income (loss)	(2,070)	694
Domestic [member] | KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	55,936	96,213
Liabilities	1,315	1,094
Equity (deficit)	54,621	95,119
Sales	10,212	14,157
Net income (loss)	(1,578)	9,561
Domestic [member] | KONES, Corp. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	2,766	2,627
Liabilities	1,616	1,519
Equity (deficit)	1,150	1,108
Sales	5,379	3,952
Net income (loss)	139	(615)
Foreign [member] | Roy Hill Holdings Pty Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	10,148,416	10,962,261
Liabilities	6,600,900	8,059,714
Equity (deficit)	3,547,516	2,902,547
Sales	2,988,372	845,243
Net income (loss)	797,008	129,968
Foreign [member] | POSCO-NPS Niobium LLC [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	697,470	786,937
Equity (deficit)	697,470	786,937
Net income (loss)	32,481	24,719
Foreign [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	4,805,353	5,682,161
Liabilities	4,223,392	4,237,247
Equity (deficit)	581,961	1,444,914
Sales	1,290,767	226,669
Net income (loss)	(740,591)	243,151
Foreign [member] | KOBRASCO [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	252,813	178,853
Liabilities	35,843	2,236
Equity (deficit)	216,970	176,617
Sales	179,453	72,274
Net income (loss)	112,890	41,522
Foreign [member] | BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	717,472	789,336
Liabilities	391,871	427,475
Equity (deficit)	325,601	361,861
Sales	1,245,178	948,488
Net income (loss)	5,978	1,033
Foreign [member] | DMSA/AMSA [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	5,586,171	6,570,172
Liabilities	4,167,906	4,842,560
Equity (deficit)	1,418,265	1,727,612
Sales	630,229	579,388
Net income (loss)	(475,958)	(519,969)
Foreign [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	1,911,942	2,171,689
Liabilities	1,121,783	1,305,942
Equity (deficit)	790,159	865,747
Sales	445,682	491,011
Net income (loss)	171,303	187,114
Foreign [member] | 7623704 Canada Inc. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	1,182,376	1,334,391
Liabilities	9	1
Equity (deficit)	1,182,367	1,334,390
Net income (loss)	82,344	19,485
Foreign [member] | Nickel mining company SAS [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	465,700	491,458
Liabilities	324,687	347,194
Equity (deficit)	141,013	144,264
Sales	179,683	145,571
Net income (loss)	(4,450)	(61,473)
Foreign [member] | Korea LNG Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	179,269	303,389
Liabilities	86	19,704
Equity (deficit)	179,183	283,685
Sales	34,640	33,035
Net income (loss)	32,446	31,962
Foreign [member] | PT. batutua tembaga raya [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	336,085	351,119
Liabilities	272,542	332,037
Equity (deficit)	63,543	19,082
Sales	195,520
Net income (loss)	49,091
Foreign [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	70,437	83,291
Liabilities	18,722	24,676
Equity (deficit)	51,715	58,615
Sales	85,850	117,387
Net income (loss)	(3,736)	(1,216)
Foreign [member] | PT. wampu electric power [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	212,095	206,052
Liabilities	148,177	165,618
Equity (deficit)	63,918	40,434
Sales	779	3,405
Net income (loss)	29,634	(1,984)
Foreign [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of investments in associates and joint ventures [Line Items]
Assets	70,701	67,905
Liabilities	43,588	40,451
Equity (deficit)	27,113	27,454
Sales	84,973	81,260
Net income (loss)	₩ 1,210	₩ 938

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Joint Operations - Details of Significant Joint Operations (Detail)	12 Months Ended
	Dec. 31, 2017
Myanmar A-1/A-3 mine [member]
Disclosure of joint operations [line items]
Category of business	Mineral development and gas production
Ownership (%)	51.00%
Location	Myanmar
Offshore midstream [member]
Disclosure of joint operations [line items]
Category of business	Gas transportation facility
Ownership (%)	51.00%
Location	Myanmar
Greenhills mine [member]
Disclosure of joint operations [line items]
Category of business	Mine development
Ownership (%)	20.00%
Location	Canada
Arctos Anthracite coal project [member]
Disclosure of joint operations [line items]
Category of business	Mine development
Ownership (%)	50.00%
Location	Canada
Mt. Thorley J/V [member]
Disclosure of joint operations [line items]
Category of business	Mine development
Ownership (%)	20.00%
Location	Australia
POSMAC J/V [member]
Disclosure of joint operations [line items]
Category of business	Mine development
Ownership (%)	20.00%
Location	Australia
RUM J/V [member]
Disclosure of joint operations [line items]
Category of business	Mine development
Ownership (%)	10.00%
Location	Australia
Hanam Gamil package public housing project [member]
Disclosure of joint operations [line items]
Category of business	Construction
Ownership (%)	7.70%
Location	Korea
Sejong 2-1 P3 Block public housing project [member]
Disclosure of joint operations [line items]
Category of business	Construction
Ownership (%)	37.00%
Location	Korea
Yongin-Giheung Station area city development project [member]
Disclosure of joint operations [line items]
Category of business	Construction
Ownership (%)	61.00%
Location	Korea
Korean wave world complex land multi-purpose building development project [member]
Disclosure of joint operations [line items]
Category of business	Construction
Ownership (%)	33.30%
Location	Korea
Sejong 4-1 P3 Block public housing project [member]
Disclosure of joint operations [line items]
Category of business	Construction
Ownership (%)	60.00%
Location	Korea

XML

Investment Property, Net - Summary of Investment Property (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about investment property [line items]
Investment property	₩ 1,064,914	₩ 1,117,720	₩ 1,084,292
Land [member]
Disclosure of detailed information about investment property [line items]
Investment property	360,402	392,723	346,879
Buildings [member]
Disclosure of detailed information about investment property [line items]
Investment property	634,040	671,539	696,526
Structures [member]
Disclosure of detailed information about investment property [line items]
Investment property	6,281	2,147	1,819
Construction-in-progress [member]
Disclosure of detailed information about investment property [line items]
Investment property	64,191	51,311	₩ 39,068
Gross amount [member]
Disclosure of detailed information about investment property [line items]
Investment property	1,159,332	1,286,026
Gross amount [member] | Land [member]
Disclosure of detailed information about investment property [line items]
Investment property	360,402	423,910
Gross amount [member] | Buildings [member]
Disclosure of detailed information about investment property [line items]
Investment property	727,022	807,657
Gross amount [member] | Structures [member]
Disclosure of detailed information about investment property [line items]
Investment property	7,717	3,148
Gross amount [member] | Construction-in-progress [member]
Disclosure of detailed information about investment property [line items]
Investment property	64,191	51,311
Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about investment property [line items]
Investment property	(94,418)	(168,306)
Accumulated depreciation, amortization and impairment [member] | Land [member]
Disclosure of detailed information about investment property [line items]
Investment property		(31,187)
Accumulated depreciation, amortization and impairment [member] | Buildings [member]
Disclosure of detailed information about investment property [line items]
Investment property	(92,982)	(136,118)
Accumulated depreciation, amortization and impairment [member] | Structures [member]
Disclosure of detailed information about investment property [line items]
Investment property	₩ (1,436)	₩ (1,001)

XML

Investment Property, Net - Additional Information (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about investment property [line items]
Investment property	₩ 1,064,914	₩ 1,117,720	₩ 1,084,292
6 Subsidiaries, including POSCO(Dalian) IT Center Development Co.,Ltd [Member]
Disclosure of detailed information about investment property [line items]
Investment property	126,026
Fair value [member] | 6 Subsidiaries, including POSCO(Dalian) IT Center Development Co.,Ltd [Member]
Disclosure of detailed information about investment property [line items]
Investment property	₩ 1,663,682

XML

Investment Property, Net - Changes in Carrying Amount of Investment Property (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about investment property [line items]
Beginning	₩ 1,117,720	₩ 1,084,292
Acquisitions	77,420	45,575
Disposals	(47,231)	(11,395)
Depreciation	(24,041)	(24,331)
Others	(58,954)	23,579
Ending	1,064,914	1,117,720
Land [member]
Disclosure of detailed information about investment property [line items]
Beginning	392,723	346,879
Acquisitions	20,941	24,116
Disposals	(37,725)	(8,056)
Others	(15,537)	29,784
Ending	360,402	392,723
Buildings [member]
Disclosure of detailed information about investment property [line items]
Beginning	671,539	696,526
Acquisitions	38,831	7,548
Disposals	(9,506)	(3,339)
Depreciation	(23,450)	(24,043)
Others	(43,374)	(5,153)
Ending	634,040	671,539
Structures [member]
Disclosure of detailed information about investment property [line items]
Beginning	2,147	1,819
Acquisitions		1
Depreciation	(591)	(288)
Others	4,725	615
Ending	6,281	2,147
Construction-in-progress [member]
Disclosure of detailed information about investment property [line items]
Beginning	51,311	39,068
Acquisitions	17,648	13,910
Others	(4,768)	(1,667)
Ending	₩ 64,191	₩ 51,311

XML

Investment Property, Net - Changes in Carrying Amount of Investment Property (Parenthetical) (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2016 KRW (₩)
Disclosure of detailed information about investment property [abstract]
Impairment loss on investment property	₩ 318

XML

Property, Plant and Equipment, Net - Summary of Property, Plant and Equipment (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	₩ 31,883,535	₩ 33,770,339	₩ 34,522,855
Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	67,499,667	67,964,596
Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(35,608,601)	(34,185,681)
Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(7,531)	(8,576)
Land [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	2,527,650	2,601,208	2,572,807
Land [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	2,534,102	2,607,660
Land [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(6,452)	(6,452)
Buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	4,877,018	4,995,631	5,165,725
Buildings [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	9,311,426	9,180,028
Buildings [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(4,433,996)	(4,183,974)
Buildings [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(412)	(423)
Structures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	2,765,852	2,908,480	2,949,413
Structures [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	5,452,713	5,385,365
Structures [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(2,686,802)	(2,476,818)
Structures [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(59)	(67)
Machinery and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	19,367,957	20,318,390	21,093,743
Machinery and equipment [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	46,669,612	46,698,254
Machinery and equipment [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(27,301,410)	(26,379,544)
Machinery and equipment [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(245)	(320)
Vehicles [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	32,861	46,699	52,005
Vehicles [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	296,815	306,770
Vehicles [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(263,884)	(259,986)
Vehicles [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(70)	(85)
Tools [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	63,640	71,380	73,478
Tools [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	380,144	385,960
Tools [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(315,446)	(312,266)
Tools [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(1,058)	(2,314)
Furniture and fixtures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	145,439	132,406	148,099
Furniture and fixtures [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	643,779	609,736
Furniture and fixtures [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(498,192)	(477,064)
Furniture and fixtures [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(148)	(266)
Finance lease assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	145,257	159,013	92,796
Finance lease assets [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	243,160	248,590
Finance lease assets [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(97,903)	(89,577)
Bearer plants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	65,515
Bearer plants [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	70,031
Bearer plants [member] | Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	(4,516)
Construction-in-progress [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	1,892,346	2,537,132	₩ 2,374,789
Construction-in-progress [member] | Gross amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	1,897,885	2,542,233
Construction-in-progress [member] | Government grants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment	₩ (5,539)	₩ (5,101)

XML

Property, Plant and Equipment, Net - Changes in Carrying Amount of Property, Plant and Equipment (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	₩ 33,770,339	₩ 34,522,855
Acquisitions	2,257,864	2,331,351
Business combination		342,886
Disposals	(124,941)	(78,501)
Depreciation	(2,980,836)	(3,008,372)
Others	(1,038,891)	(339,880)
Ending	31,883,535	33,770,339
Land [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	2,601,208	2,572,807
Acquisitions	3,477	8,901
Business combination		15,687
Disposals	(18,226)	(16,176)
Depreciation		(6,452)
Others	(58,809)	26,441
Ending	2,527,650	2,601,208
Buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	4,995,631	5,165,725
Acquisitions	53,961	37,493
Business combination		277,242
Disposals	(5,782)	(12,857)
Depreciation	(361,531)	(396,899)
Others	194,739	(75,073)
Ending	4,877,018	4,995,631
Structures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	2,908,480	2,949,413
Acquisitions	18,943	19,043
Disposals	(2,558)	(1,994)
Depreciation	(246,229)	(216,631)
Others	87,216	158,649
Ending	2,765,852	2,908,480
Machinery and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	20,318,390	21,093,743
Acquisitions	194,653	193,856
Business combination		47,021
Disposals	(93,210)	(36,095)
Depreciation	(2,217,435)	(2,277,740)
Others	1,165,559	1,297,605
Ending	19,367,957	20,318,390
Vehicles [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	46,699	52,005
Acquisitions	9,982	8,967
Business combination		88
Disposals	(1,623)	(1,990)
Depreciation	(22,340)	(18,484)
Others	143	6,113
Ending	32,861	46,699
Tools [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	71,380	73,478
Acquisitions	16,424	17,546
Business combination		635
Disposals	(976)	(848)
Depreciation	(28,539)	(27,396)
Others	5,351	7,965
Ending	63,640	71,380
Furniture and fixtures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	132,406	148,099
Acquisitions	61,597	30,650
Business combination		32
Disposals	(1,296)	(4,248)
Depreciation	(48,416)	(51,361)
Others	1,148	9,234
Ending	145,439	132,406
Finance lease assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	159,013	92,796
Acquisitions	4,760	79,556
Disposals	(453)	(38)
Depreciation	(14,810)	(13,409)
Others	(3,253)	108
Ending	145,257	159,013
Construction-in-progress [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning	2,537,132	2,374,789
Acquisitions	1,894,067	1,935,339
Business combination		2,181
Disposals	(817)	(4,255)
Depreciation	(36,706)
Others	(2,501,330)	(1,770,922)
Ending	1,892,346	₩ 2,537,132
Bearer plants [member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation	(4,830)
Others	70,345
Ending	₩ 65,515

XML

Property, Plant and Equipment, Net - Changes in Carrying Amount of Property, Plant and Equipment (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about property, plant and equipment [line items]
Impairment loss on property, plant and equipment	₩ 117,231	₩ 196,882	₩ 136,269
POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about property, plant and equipment [line items]
Discount rate		14.00%
Fuel cell business [Member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about property, plant and equipment [line items]
Impairment loss on property, plant and equipment		₩ 61,565
Individual assets based on disposal plans [Member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about property, plant and equipment [line items]
Impairment loss on property, plant and equipment	17,651	₩ 58,388
Suncheon bay personal rapid transit business [member] | Suncheon Eco Trans Co., Ltd [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Impairment loss on property, plant and equipment	₩ 48,070

XML

Property, Plant and Equipment, Net - Borrowing Costs Capitalized and Capitalized Interest Rate (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about property, plant and equipment [line items]
Expenditure	₩ 2,287,580	₩ 2,324,112	₩ 2,560,244
Borrowing costs capitalized	37,261	40,321
Weighted average [member]
Disclosure of detailed information about property, plant and equipment [line items]
Expenditure	₩ 1,180,563	₩ 1,070,280
Bottom of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Capitalization rate (%)	1.74%	3.32%
Top of range [member]
Disclosure of detailed information about property, plant and equipment [line items]
Capitalization rate (%)	3.45%	3.82%

XML

Property, Plant and Equipment, Net - Property, Plant and Equipment and Investment Property Pledged as Collateral (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment and investment property pledged as collateral	₩ 6,043,269	₩ 6,698,026
Land [member] | Korean Development Bank and others [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment and investment property pledged as collateral	822,057	925,670
Buildings and structures [member] | Korean Development Bank and others [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment and investment property pledged as collateral	1,678,403	1,734,543
Machinery and equipment [member] | Korean Development Bank and others [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment and investment property pledged as collateral	3,527,420	₩ 4,037,813
Construction-in-progress [member] | Korean Development Bank and others [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment and investment property pledged as collateral	₩ 15,389

XML

Property, Plant and Equipment, Net - Property, Plant and Equipment and Investment Property Pledged as Collateral (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Assets pledged as collateral	₩ 6,043,269	₩ 6,698,026
Investment Property And Other Assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Assets pledged as collateral	₩ 4,984,841

XML

Goodwill and Other Intangible Assets, Net - Summary of Goodwill and Other Intangible Assets (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	₩ 5,952,269	₩ 6,088,729	₩ 6,405,754
Goodwill [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	1,349,838	1,375,131	1,461,954
Intellectual property rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	2,449,193	2,521,171	2,667,086
Premium in rental [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	118,310	119,039	127,949
Development costs [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	80,218	117,012	135,796
Port facilities usage rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	309,373	256,617	264,801
Exploration and evaluation assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	205,944	162,268	151,144
Customer relationships [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	466,945	514,245	559,809
Power generation permit [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	539,405	539,405	539,405
Other intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	433,043	483,841	₩ 497,810
Gross amount [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	8,686,709	8,344,824
Gross amount [member] | Goodwill [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	1,604,288	1,669,556
Gross amount [member] | Intellectual property rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	3,140,159	2,923,030
Gross amount [member] | Premium in rental [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	139,873	139,843
Gross amount [member] | Development costs [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	397,129	376,327
Gross amount [member] | Port facilities usage rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	705,692	633,025
Gross amount [member] | Exploration and evaluation assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	296,320	196,124
Gross amount [member] | Customer relationships [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	857,624	859,643
Gross amount [member] | Power generation permit [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	539,405	539,405
Gross amount [member] | Other intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	1,006,219	1,007,871
Accumulated depreciation, amortization and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(2,734,397)	(2,255,231)
Accumulated depreciation, amortization and impairment [member] | Goodwill [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(254,450)	(294,425)
Accumulated depreciation, amortization and impairment [member] | Intellectual property rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(690,966)	(401,156)
Accumulated depreciation, amortization and impairment [member] | Premium in rental [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(21,563)	(20,804)
Accumulated depreciation, amortization and impairment [member] | Development costs [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(316,892)	(259,184)
Accumulated depreciation, amortization and impairment [member] | Port facilities usage rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(396,319)	(376,408)
Accumulated depreciation, amortization and impairment [member] | Exploration and evaluation assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(90,376)	(33,856)
Accumulated depreciation, amortization and impairment [member] | Customer relationships [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(390,679)	(345,398)
Accumulated depreciation, amortization and impairment [member] | Other intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(573,152)	(524,000)
Government grants [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(43)	(864)
Government grants [member] | Intellectual property rights [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets		(703)
Government grants [member] | Development costs [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	(19)	(131)
Government grants [member] | Other intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill and other intangible assets	₩ (24)	₩ (30)

XML

Goodwill and Other Intangible Assets, Net - Changes in Carrying Amount of Goodwill and Other Intangible Assets (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	₩ 6,088,729	₩ 6,405,754
Acquisitions	353,115	160,714
Business combination	47,625
Disposals	(6,936)	(9,793)
Amortization	(409,774)	(378,004)
Impairment loss	(166,977)	(125,270)
Others (*2)	46,487	35,328
Ending	5,952,269	6,088,729
Goodwill [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	1,375,131	1,461,954
Impairment loss	(21,750)	(95,984)
Others (*2)	(3,543)	9,161
Ending	1,349,838	1,375,131
Intellectual property rights [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	2,521,171	2,667,086
Acquisitions	167,580	56,849
Business combination	47,625
Disposals	(450)	(753)
Amortization	(217,932)	(204,112)
Impairment loss	(74,524)	(16,786)
Others (*2)	5,723	18,887
Ending	2,449,193	2,521,171
Premium in rental [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	119,039	127,949
Acquisitions	6,006	1,964
Disposals	(3,666)	(7,526)
Amortization	(611)	(243)
Impairment loss	(1,661)	(1,559)
Others (*2)	(797)	(1,546)
Ending	118,310	119,039
Development costs [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	117,012	135,796
Acquisitions	3,479	4,027
Disposals	(1,179)	(60)
Amortization	(66,847)	(61,732)
Impairment loss	(694)	(298)
Others (*2)	28,447	39,279
Ending	80,218	117,012
Port facilities usage rights [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	256,617	264,801
Amortization	(19,912)	(15,217)
Others (*2)	72,668	7,033
Ending	309,373	256,617
Exploration and evaluation assets [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	162,268	151,144
Acquisitions	91,548	45,524
Impairment loss	(56,519)	(3,290)
Others (*2)	8,647	(31,110)
Ending	205,944	162,268
Customer relationships [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	514,245	559,809
Amortization	(46,508)	(47,790)
Others (*2)	(792)	2,226
Ending	466,945	514,245
Power generation permit [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	539,405	539,405
Ending	539,405	539,405
Other intangible assets [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Beginning	483,841	497,810
Acquisitions	84,502	52,350
Disposals	(1,641)	(1,454)
Amortization	(57,964)	(48,910)
Impairment loss	(11,829)	(7,353)
Others (*2)	(63,866)	(8,602)
Ending	₩ 433,043	₩ 483,841

XML

Goodwill and Other Intangible Assets, Net - Allocation of Goodwill to Individually Operating Entities Which are Determined to be CGUs (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩) Cash_Generating_Units	Dec. 31, 2016 KRW (₩) Cash_Generating_Units
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Total number of CGUs | Cash_Generating_Units	16	21
Goodwill	₩ 1,349,838	₩ 1,375,131
Steel [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Total number of CGUs | Cash_Generating_Units	7	9
Trading [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Total number of CGUs | Cash_Generating_Units	2	2
Construction [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Total number of CGUs | Cash_Generating_Units	2	4
Other reportable segment [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Total number of CGUs | Cash_Generating_Units	5	6
POSCO Engineering & Construction Co., Ltd. [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Discount rate	8.20%
Terminal growth rate	1.00%
Period for the estimated future cash flows	5 years
Discount rate increase	0.25%
Value in use decrease due to increase in discount rate	3.02%
Terminal growth rate decrease	0.25%
Value in use decrease due to decrease in terminal growth rate	2.06%
Impairment loss on goodwill	₩ 20,883
POSCO Engineering & Construction Co., Ltd. [member] | Construction [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	POSCO ENGINEERING & CONSTRUCTION CO., LTD.
Goodwill	₩ 90,426
POSCO DAEWOO Corporation [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Discount rate	8.10%
Terminal growth rate	1.90%
Period for the estimated future cash flows	5 years
Recoverable amount of CGU in excess of carrying amount	₩ 117,324
Discount rate increase	0.25%
Value in use decrease due to increase in discount rate	3.45%
Terminal growth rate decrease	0.25%
Value in use decrease due to decrease in terminal growth rate	1.78%
POSCO DAEWOO Corporation [member] | Trading [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	POSCO DAEWOO Corporation
Goodwill	₩ 1,165,030	₩ 1,163,922
POSCO VST Co., Ltd. [member] | Steel [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	POSCO VST CO., LTD.
Goodwill	₩ 36,955	36,955
Others [member] | Steel [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	Others
Goodwill	₩ 12,494	13,151
Others [member] | Other reportable segment [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	Others
Goodwill	₩ 11,206	15,087
PT. Bio Inti Agrindo [member] | Trading [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	PT. Bio Inti Agrindo
Goodwill	₩ 7,099	8,070
POSCO Engineering CO., Ltd. [member] | Construction [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	POSCO Engineering CO.,Ltd
Goodwill		111,309
DONG FANG JIN HONG [member] | Construction [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	DONG FANG JIN HONG
Goodwill	₩ 157	166
POSCO ENERGY CO., LTD. [member] | Other reportable segment [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
CGUs	POSCO ENERGY CO., LTD.
Goodwill	₩ 26,471	₩ 26,471

XML

Goodwill and Other Intangible Assets, Net - Allocation of Goodwill to Individually Operating Entities Which are Determined to be CGUs (Parenthetical) (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩)
POSCO DAEWOO Corporation [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Goodwill transferred	₩ 1,108
POSCO Processing And Service Co Ltd [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Goodwill transferred	₩ (1,108)

XML

Other Assets - Summary of Other Current Assets and Other Non-Current Assets (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Advance payment	₩ 661,779	₩ 787,452
Prepaid expenses	143,032	105,102
Firm commitment asset	15,115
Others	1,316	1,930
Other current assets	821,242	894,484
Non-current
Long-term advance payment	24,201	27,189
Long-term prepaid expenses	333,153	380,678
Others	131,657	159,813
Other non-current assets	₩ 489,011	₩ 567,680

XML

Other Assets - Summary of Other Current Assets and Other Non-Current Assets (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Subclassifications of assets, liabilities and equities [abstract]
Tax assets	₩ 88,633	₩ 100,693

XML

Borrowings - Short-term Borrowings and Current Portion of Long-term Borrowings (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Short-term borrowings	₩ 8,174,818	₩ 7,979,727
Current borrowings and current portion of non-current borrowings	11,274,516	10,194,807
JP Morgan and others [member]
Disclosure of detailed information about borrowings [line items]
Short-term borrowings	217,879	254,036
HSBC and others [member]
Disclosure of detailed information about borrowings [line items]
Short-term borrowings	₩ 7,956,939	7,725,691
Bottom of range [member] | Short-term borrowings [member] | JP Morgan and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	January, 2017
Maturity date	January, 2018
Interest rate (%)	1.20%
Bottom of range [member] | Short-term borrowings [member] | HSBC and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	January, 2017
Maturity date	January, 2018
Interest rate (%)	0.30%
Bottom of range [member] | Current portion of long-term liabilities [member] | Export-Import Bank of Korea and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	September, 2001
Maturity date	February, 2018
Interest rate (%)	0.40%
Bottom of range [member] | Current portion of long-term liabilities [member] | Korean Development Bank and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	August, 2009
Maturity date	February, 2018
Interest rate (%)	1.40%
Top of range [member] | Short-term borrowings [member] | JP Morgan and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	December, 2017
Maturity date	December, 2018
Interest rate (%)	9.00%
Top of range [member] | Short-term borrowings [member] | HSBC and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	December, 2017
Maturity date	December, 2018
Interest rate (%)	10.50%
Top of range [member] | Current portion of long-term liabilities [member] | Export-Import Bank of Korea and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	November, 2017
Maturity date	December, 2018
Interest rate (%)	8.50%
Top of range [member] | Current portion of long-term liabilities [member] | Korean Development Bank and others [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	November, 2016
Maturity date	December, 2018
Interest rate (%)	6.10%
Gross amount [member]
Disclosure of detailed information about borrowings [line items]
Current portion of debentures	₩ (1,399)	(829)
Gross amount [member] | Export-Import Bank of Korea and others [member]
Disclosure of detailed information about borrowings [line items]
Current portion of debentures	1,407,123	1,390,733
Gross amount [member] | Korean Development Bank and others [member]
Disclosure of detailed information about borrowings [line items]
Current portion of debentures	1,693,974	825,176
Discount on debentures [member]
Disclosure of detailed information about borrowings [line items]
Current portion of debentures	₩ 3,099,698	₩ 2,215,080

XML

Borrowings - Long-term Borrowings, Excluding Current Portion (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Long-term borrowings, excluding current portion	₩ 9,789,141	₩ 12,510,191
Export-Import Bank of Korea and others [member] | Long-term borrowings [member] | Bottom of range [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	September, 2001
Maturity date	March, 2019
Interest rate (%)	0.50%
Export-Import Bank of Korea and others [member] | Long-term borrowings [member] | Top of range [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	Decemeber, 2017
Maturity date	March, 2037
Interest rate (%)	8.40%
Korean Development Bank and others [member] | Long-term borrowings [member] | Bottom of range [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	August, 2009
Maturity date	February, 2019
Interest rate (%)	1.80%
Korean Development Bank and others [member] | Long-term borrowings [member] | Top of range [member]
Disclosure of detailed information about borrowings [line items]
Issuance date	November, 2017
Maturity date	July, 2025
Interest rate (%)	6.30%
Gross amount [member] | Export-Import Bank of Korea and others [member]
Disclosure of detailed information about borrowings [line items]
Long-term borrowings, excluding current portion	₩ 4,839,199	6,420,612
Gross amount [member] | Korean Development Bank and others [member]
Disclosure of detailed information about borrowings [line items]
Long-term borrowings, excluding current portion	4,999,575	6,163,896
Present value discount [member]
Disclosure of detailed information about borrowings [line items]
Long-term borrowings, excluding current portion	(36,459)	(55,799)
Discount on debentures [member]
Disclosure of detailed information about borrowings [line items]
Long-term borrowings, excluding current portion	₩ (13,174)	₩ (18,518)

XML

Borrowings - Summary of Assets Pledges as Collateral (Detail) ₩ in Millions	Dec. 31, 2017 KRW (₩)
Disclosure Of Assets Pledged As Collateral [line items]
Pledged amount	₩ 5,288,208
Book value [member]
Disclosure Of Assets Pledged As Collateral [line items]
Assets	6,143,600
Property, plant and equipment including investment property [member] | Korean Development Bank and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Pledged amount	4,969,201
Property, plant and equipment including investment property [member] | Book value [member] | Korean Development Bank and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Assets	5,777,330
Trade accounts and notes receivables, net [member] | Korean Development Bank and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Pledged amount	147,581
Trade accounts and notes receivables, net [member] | Book value [member] | Korean Development Bank and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Assets	147,581
Inventories [member] | Export-Import Bank of Korea and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Pledged amount	116,378
Inventories [member] | Book value [member] | Export-Import Bank of Korea and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Assets	162,198
Financial instruments [member] | Woori Bank and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Pledged amount	55,048
Financial instruments [member] | Book value [member] | Woori Bank and others [member]
Disclosure Of Assets Pledged As Collateral [line items]
Assets	₩ 56,491

XML

Other Payables - Summary of Other Payables (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Accounts payable	₩ 800,374	₩ 854,623
Accrued expenses	653,923	665,295
Dividend payable	7,213	7,770
Finance lease liabilities	17,763	24,523
Withholdings	274,188	299,448
Other payables, current	1,753,461	1,851,659
Non-current
Accounts payable	4,632	6,823
Accrued expenses	14,234	41,082
Finance lease liabilities	75,255	89,886
Long-term withholdings	53,629	70,768
Other payables, non-current	₩ 147,750	₩ 208,559

XML

Other Financial Liabilities - Summary of Other Financial Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Derivatives liabilities	₩ 69,872	₩ 85,786
Financial guarantee liabilities	59,940	63,962
Other financial liabilities, current	129,812	149,748
Non-current
Derivatives liabilities	85,638	37,110
Financial guarantee liabilities	28,467	44,199
Other financial liabilities, non-current	₩ 114,105	₩ 81,309

XML

Provisions - Summary of Provisions (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of other provisions [line items]
Current	₩ 110,946	₩ 114,865
Non-current	477,172	337,739
Provision for bonus payments [member]
Disclosure of other provisions [line items]
Current	49,171	42,986
Provision for construction warranties [member]
Disclosure of other provisions [line items]
Current	11,804	10,551
Non-current	106,232	86,158
Provision for legal contingencies and claims [member]
Disclosure of other provisions [line items]
Current	495	4,348
Non-current	36,269	80,498
Provisions for the restoration [member]
Disclosure of other provisions [line items]
Current	12,273	10,169
Non-current	121,917	52,425
Others [member]
Disclosure of other provisions [line items]
Current	37,203	46,811
Non-current	₩ 212,754	₩ 118,658

XML

Provisions - Summary of Provisions (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of other provisions [line items]
Other provisions	₩ 588,118	₩ 452,604	₩ 324,012
POSCO ENERGY CO., LTD. [member]
Disclosure of other provisions [line items]
Discount rates		14.00%
Others [member]
Disclosure of other provisions [line items]
Other provisions	249,957	₩ 165,469	₩ 102,243
Others [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of other provisions [line items]
Other provisions	157,461	87,827
Others [member] | POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of other provisions [line items]
Other provisions	23,600	23,600
Lawsuits provision [member]
Disclosure of other provisions [line items]
Other provisions	27,963	₩ 30,425
Land [member] | Gangneung province [member]
Disclosure of other provisions [line items]
Other provisions	₩ 29,471
Discount rates	2.73%
Land [member] | Pohang work [member]
Disclosure of other provisions [line items]
Discount rates	2.73%

XML

Provisions - Changes in Provisions (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of other provisions [line items]
Beginning	₩ 452,604	₩ 324,012
Increase	367,595	297,996
Utilization	(225,861)	(157,202)
Reversal	(27,485)	(18,716)
Others	21,265	6,514
Ending	588,118	452,604
Provision for bonus payments [member]
Disclosure of other provisions [line items]
Beginning	42,986	42,602
Increase	74,728	44,106
Utilization	(64,319)	(42,211)
Reversal	(3,035)	(272)
Others	(1,189)	(1,239)
Ending	49,171	42,986
Provision for construction warranties [member]
Disclosure of other provisions [line items]
Beginning	96,709	81,446
Increase	40,916	33,925
Utilization	(18,006)	(19,469)
Reversal	(2,502)	(2,695)
Others	919	3,502
Ending	118,036	96,709
Provision for legal contingencies and claims [member]
Disclosure of other provisions [line items]
Beginning	84,846	52,610
Increase	27,459	45,525
Utilization	(70,156)	(14,012)
Reversal	(1,749)	(188)
Others	(3,636)	911
Ending	36,764	84,846
Provisions for the restoration [member]
Disclosure of other provisions [line items]
Beginning	62,594	45,111
Increase	63,438	42,529
Utilization	(8,530)	(13,367)
Reversal		(12,475)
Others	16,688	796
Ending	134,190	62,594
Others [member]
Disclosure of other provisions [line items]
Beginning	165,469	102,243
Increase	161,054	131,911
Utilization	(64,850)	(68,143)
Reversal	(20,199)	(3,086)
Others	8,483	2,544
Ending	₩ 249,957	₩ 165,469

XML

Employee Benefits - Expense Related to Post-employment Benefit Plans under Defined Contribution Plans (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of defined benefit plans [abstract]
Expense related to post-employment benefit plans under defined contribution plans	₩ 35,538	₩ 30,344	₩ 25,224

XML

Employee Benefits - Amounts Recognized in Relation to Net Defined Benefit Liabilities in Statements of Financial Position (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of defined benefit plans [abstract]
Present value of funded obligations	₩ 1,826,907	₩ 1,715,583
Fair value of plan assets	(1,714,166)	(1,693,118)
Present value of non-funded obligations	16,228	17,437
Net defined benefit liabilities	₩ 128,969	₩ 39,902

XML

Employee Benefits - Amounts Recognized in Relation to Net Defined Benefit Liabilities in Statements of Financial Position (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of defined benefit plans [abstract]
Net defined benefit assets	₩ 8,224	₩ 83,702

XML

Employee Benefits - Changes in Present Value of Defined Benefit Obligations (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of net defined benefit liability (asset) [line items]
Current service costs	₩ 209,612	₩ 285,706	₩ 239,508
Interest	(9,686)	1,901	5,894
Defined benefit obligations [member]
Disclosure of net defined benefit liability (asset) [line items]
Beginning of period	1,733,020	1,714,115
Current service costs	209,612	285,706
Interest	35,830	39,286
Remeasurements	51,994	(32,927)
- Gain from change in financial assumptions	(50,218)	(72,910)
- Loss (gain) from change in demographic assumptions	15,952	(4,140)
- Others	86,260	44,123
Benefits paid	(185,220)	(278,278)
Others	(2,101)	5,118
End of period	₩ 1,843,135	₩ 1,733,020	₩ 1,714,115

XML

Employee Benefits - Changes in Fair Value of Plan Assets (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of net defined benefit liability (asset) [line items]
Interest	₩ (9,686)	₩ 1,901	₩ 5,894
Plan assets [member]
Disclosure of net defined benefit liability (asset) [line items]
Beginning of period	1,693,118	1,532,090
Interest	45,516	37,385
Remeasurements	(17,190)	(6,963)
Contributions to plan assets	164,828	328,671
Benefits paid	(168,643)	(189,817)
Others	(3,463)	(8,248)
End of period	₩ 1,714,166	₩ 1,693,118	₩ 1,532,090

XML

Employee Benefits - Additional Information (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩)
Disclosure of net defined benefit liability (asset) [abstract]
Estimated contribution to the defined benefit plan assets	₩ 164,865

XML

Employee Benefits - Fair Value of Plan Assets (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of fair value of plan assets [abstract]
Equity instruments	₩ 41,218	₩ 56,187
Debt instruments	367,027	411,726
Deposits	1,254,571	1,167,475
Others	51,350	57,730
Fair value of plan assets	₩ 1,714,166	₩ 1,693,118

XML

Employee Benefits - Amounts Recognized in Consolidated Statements of Comprehensive Income (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of defined benefit plans [line items]
Current service costs	₩ 209,612	₩ 285,706	₩ 239,508
Net interest costs	(9,686)	1,901	5,894
Amounts recognized in consolidated statements of comprehensive income	199,926	287,607	245,402
Cost of sales [member]
Disclosure of defined benefit plans [line items]
Amounts recognized in consolidated statements of comprehensive income	131,724	161,810	170,334
Selling and administrative expenses [member]
Disclosure of defined benefit plans [line items]
Amounts recognized in consolidated statements of comprehensive income	67,424	124,994	74,210
Others [member]
Disclosure of defined benefit plans [line items]
Amounts recognized in consolidated statements of comprehensive income	₩ 778	₩ 803	₩ 858

XML

Employee Benefits - Amounts Recognized in Consolidated Statements of Comprehensive Income (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of defined benefit plans [abstract]
Actual return on plan assets	₩ 28,326	₩ 30,422	₩ 32,630

XML

Employee Benefits - Accumulated Actuarial Gains (Losses), Net of Tax Recognized in Other Comprehensive Income (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of defined benefit plans [abstract]
Beginning	₩ (251,612)	₩ (272,152)	₩ (314,106)
Current actuarial gains (losses)	(47,543)	20,540	41,954
Ending	₩ (299,155)	₩ (251,612)	₩ (272,152)

XML

Employee Benefits - Principal Actuarial Assumptions (Detail)	Dec. 31, 2017	Dec. 31, 2016
Bottom of range [member]
Disclosure of defined benefit plans [line items]
Discount rate	2.70%	2.15%
Expected future increase in salaries	1.04%	1.00%
Top of range [member]
Disclosure of defined benefit plans [line items]
Discount rate	7.75%	8.59%
Expected future increase in salaries	10.00%	10.00%

XML

Employee Benefits - Changes to Defined Benefit Obligation Due to Reasonably Possible Changes to one of the Relevant Actuarial Assumptions (Detail) ₩ in Millions	Dec. 31, 2017 KRW (₩)
Discount rate [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Affect on defined benefit obligation due to reasonably possible 1% increase in actuarial assumption	₩ (123,568)
Percentage of reasonably possible 1% increase in actuarial assumption	(6.70%)
Affect on defined benefit obligation due to reasonably possible 1% decrease in actuarial assumption	₩ 138,196
Percentage of reasonably possible 1% decrease in actuarial assumption	7.50%
Expected future increase in salaries [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Affect on defined benefit obligation due to reasonably possible 1% increase in actuarial assumption	₩ 136,385
Percentage of reasonably possible 1% increase in actuarial assumption	7.40%
Affect on defined benefit obligation due to reasonably possible 1% decrease in actuarial assumption	₩ (124,400)
Percentage of reasonably possible 1% decrease in actuarial assumption	(6.70%)

XML

Employee Benefits - Maturity of Expected Benefit Payments (Detail) ₩ in Millions	Dec. 31, 2017 KRW (₩)
Disclosure of defined benefit plans [line items]
Benefits paid	₩ 2,518,669
Less than 1 year [member]
Disclosure of defined benefit plans [line items]
Benefits paid	109,212
1 year - 5 years [member]
Disclosure of defined benefit plans [line items]
Benefits paid	613,786
5 years - 10 years [member]
Disclosure of defined benefit plans [line items]
Benefits paid	792,792
10 years - 20 years [member]
Disclosure of defined benefit plans [line items]
Benefits paid	655,599
After 20 years [member]
Disclosure of defined benefit plans [line items]
Benefits paid	₩ 347,280

XML

Other Liabilities - Summary of Other Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current
Due to customers for contract work	₩ 782,968	₩ 1,031,663
Advances received	1,183,108	864,536
Unearned revenue	7,121	8,702
Withholdings	221,940	186,665
Firm commitment liability	12,192
Others	33,590	22,307
Other current liabilities	2,240,919	2,113,873
Non-current
Advances received	353,631	418,832
Unearned revenue	18,440	20,013
Others	14,360	40,338
Other non-current liabilities	₩ 386,431	₩ 479,183

XML

Financial Instruments - Summary of Financial Assets (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Financial assets at fair value through profit or loss
Financial assets held for trading	₩ 1,970
Derivatives assets held for trading	65,051	₩ 147,582
Derivatives assets designated as hedging instruments	3,239
Available-for-sale financial assets	1,978,115	2,514,924
Held-to-maturity financial assets	5,211	2,470
Loans and receivables	21,268,107	19,277,709
Financial assets	₩ 23,321,693	₩ 21,942,685

XML

Financial Instruments - Summary of Financial Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Financial liabilities at fair value through profit or loss
Derivatives liabilities held for trading	₩ 142,280	₩ 122,896
Derivatives liabilities designated as hedging instruments	13,230
Financial liabilities measured at amortized cost
Trade accounts and notes payable	3,477,678	4,117,798
Borrowings	21,063,657	22,704,998
Financial guarantee liabilities	88,407	108,161
Others	1,865,683	2,007,114
Financial liabilities	₩ 26,650,935	₩ 29,060,967

XML

Financial Instruments - Finance Income and Costs by Category of Financial Instruments (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about financial instruments [line items]
Interest income (expense)	₩ (440,664)	₩ (476,251)	₩ (578,579)
Gain and loss on valuation	(161,735)	(15,565)	83,201
Finance income Gain and loss on G foreign currency	170,098	(142,308)	(382,553)
Gain and loss on disposal	360,787	87,819	146,751
Impairment loss	(123,214)	(248,404)	(142,781)
Others	83,118	12,499	43,980
Total	(111,610)	(782,210)	(829,981)
Other comprehensive income (loss)	(31,389)	310,608	(187,854)
Derivative financial liabilities [member]
Disclosure of detailed information about financial instruments [line items]
Gain and loss on valuation	(61,809)	(72,976)	(46,748)
Gain and loss on disposal	(231,908)	(332,415)	(334,340)
Total	(293,717)	(405,391)	(381,088)
Financial liabilities measured at amortized cost [member]
Disclosure of detailed information about financial instruments [line items]
Interest income (expense)	(653,115)	(658,726)	(788,772)
Finance income Gain and loss on G foreign currency	777,935	(283,059)	(665,583)
Gain and loss on disposal		(61)
Others	(9,546)	(28,367)	(138,827)
Total	115,274	(970,213)	(1,593,182)
Derivative financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Gain and loss on valuation	(99,942)	57,411	129,949
Gain and loss on disposal	206,362	310,625	357,715
Total	106,420	368,036	487,664
Other comprehensive income (loss)	(143)
Available-for-sale financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Interest income (expense)	60	431	1,956
Gain and loss on disposal	418,789	127,524	138,782
Impairment loss	(123,214)	(248,404)	(142,781)
Others	92,961	41,000	183,712
Total	388,596	(79,449)	181,669
Other comprehensive income (loss)	(31,389)	310,608	(187,854)
Held-to-maturity financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Interest income (expense)	236	266	456
Others	7	38	(688)
Total	243	304	(232)
Loans and receivables [member]
Disclosure of detailed information about financial instruments [line items]
Interest income (expense)	212,155	181,778	207,781
Finance income Gain and loss on G foreign currency	(607,837)	140,751	283,030
Gain and loss on disposal	(32,456)	(17,854)	(15,406)
Others	(304)	(172)	(217)
Total	(428,442)	₩ 304,503	₩ 475,188
Financial Assets Held For Trading [Member]
Disclosure of detailed information about financial instruments [line items]
Gain and loss on valuation	16
Total	₩ 16

XML

Financial Instruments - Maximum Exposure to Credit Risk (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	₩ 21,536,444	₩ 19,479,410
Cash and cash equivalents [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	2,612,530	2,447,619
Derivative financial assets [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	68,290	147,582
Fair value through profit or loss [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	1,970
Available-for-sale financial assets [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	192,866	51,649
Held-to-maturity financial assets [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	5,211	2,470
Loans and receivables [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	9,099,444	7,104,940
Trade accounts and notes receivables, net [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	8,824,563	9,674,026
Long-term trade accounts and notes receivable, net [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	₩ 731,570	₩ 51,124

XML

Financial Instruments - Additional Information (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Maximum exposure to credit risk related financial guarantees	₩ 21,536,444	₩ 19,479,410
Financial guarantees [member]
Disclosure of detailed information about financial instruments [line items]
Maximum exposure to credit risk related financial guarantees	₩ 3,135,084	₩ 2,995,544

XML

Financial Instruments - Allowance for Doubtful Accounts (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of financial assets [line items]
Allowance for doubtful accounts	₩ 1,094,464	₩ 977,771	₩ 999,678	₩ 954,153
Trade accounts and notes receivables, net [member]
Disclosure of financial assets [line items]
Allowance for doubtful accounts	634,129	558,125
Other accounts receivable [member]
Disclosure of financial assets [line items]
Allowance for doubtful accounts	187,706	203,346
Loans [member]
Disclosure of financial assets [line items]
Allowance for doubtful accounts	258,957	210,346
Other assets [member]
Disclosure of financial assets [line items]
Allowance for doubtful accounts	₩ 13,672	₩ 5,954

XML

Financial Instruments - Impairment Losses on Financial Assets (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of financial assets [line items]
Impairment loss on financial assets	₩ 123,214	₩ 248,404	₩ 142,781
Impairment loss on financial assets, net	395,065	451,083
Bad debt expenses [member]
Disclosure of financial assets [line items]
Impairment loss on financial assets	173,694	165,150
Others [member]
Disclosure of financial assets [line items]
Impairment loss on financial assets	100,920	50,225
Less: Recovery of impairment loss on financial assets	(2,743)	(12,658)
Available-for-sale financial assets [member]
Disclosure of financial assets [line items]
Impairment loss on financial assets	123,214	248,404
Held-to-maturity financial assets [member]
Disclosure of financial assets [line items]
Less: Recovery of impairment loss on financial assets	₩ (20)	₩ (38)

XML

Financial Instruments - Aging and Impairment Losses of Trade Accounts and Notes Receivable and Other Receivables (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	₩ 23,321,693	₩ 21,942,685
Impairment	1,094,464	977,771	₩ 999,678	₩ 954,153
Trade accounts and notes receivables, net [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	10,190,262	10,283,275
Impairment	634,129	558,125
Trade accounts and notes receivables, net [member] | Not due [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	7,736,092	7,963,491
Impairment	65,314	62,511
Trade accounts and notes receivables, net [member] | Over due less than 1 one month [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	445,390	790,042
Impairment	12,546	27,482
Trade accounts and notes receivables, net [member] | 1 month-3 months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	170,682	205,394
Impairment	742	8,955
Trade accounts and notes receivables, net [member] | 3 months-12 months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	384,313	189,605
Impairment	21,030	26,814
Trade accounts and notes receivables, net [member] | Over 12 months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	1,453,785	1,134,743
Impairment	534,497	432,363
Other receivables [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	2,655,801	2,306,959
Impairment	460,335	419,646
Other receivables [member] | Not due [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	1,888,726	1,641,924
Impairment	9,672	23,958
Other receivables [member] | Over due less than 1 one month [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	235,559	197,772
Impairment	35,539	75,207
Other receivables [member] | 1 month-3 months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	69,372	27,525
Impairment	54,335	1,189
Other receivables [member] | 3 months-12 months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	96,942	82,337
Impairment	64,467	20,300
Other receivables [member] | Over 12 months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	365,202	357,401
Impairment	₩ 296,322	₩ 298,992

XML

Financial Instruments - Changes in Allowance for Doubtful Accounts (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of changes in allowance account for credit losses of financial assets [abstract]
Beginning	₩ 977,771	₩ 999,678	₩ 954,153
Bad debt expenses	173,694	165,150	189,616
Other bad debt expenses	98,177	37,567	147,619
Others	(155,178)	(224,624)	(291,710)
Ending	₩ 1,094,464	₩ 977,771	₩ 999,678

XML

Financial Instruments - Changes in Allowance for Doubtful Accounts (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of changes in allowance account for credit losses of financial assets [abstract]
Exclusion of POSCO PLANTEC Co., Ltd. from consolidation			₩ 199,003
Write-off of receivables	₩ 119,964	₩ 216,657

XML

Financial Instruments - Contractual Maturities for Non-derivative Financial Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade accounts and notes payable, book value	₩ 3,477,678	₩ 4,117,798
Borrowings, book value	21,063,657	22,704,998
Financial guarantee liabilities, book value	88,407	108,161
Other financial liabilities, book value	1,865,683	₩ 2,007,114
Non-derivative financial liabilities, book value	26,495,425
Trade accounts and notes payable, contractual cash flow	3,478,992
Borrowings, contractual cash flow	22,928,112
Financial guarantee liabilities, contractual cash flow	3,135,084
Other financial liabilities, contractual cash flow	1,874,667
Non-derivative financial liabilities, contractual cash flow	31,416,855
Less than 1 year [member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade accounts and notes payable, contractual cash flow	3,466,001
Borrowings, contractual cash flow	12,093,516
Financial guarantee liabilities, contractual cash flow	3,135,084
Other financial liabilities, contractual cash flow	1,721,004
Non-derivative financial liabilities, contractual cash flow	20,415,605
1 year - 5 years [member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade accounts and notes payable, contractual cash flow	12,991
Borrowings, contractual cash flow	9,200,416
Other financial liabilities, contractual cash flow	153,663
Non-derivative financial liabilities, contractual cash flow	9,367,070
After 5 years [member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Borrowings, contractual cash flow	1,634,180
Non-derivative financial liabilities, contractual cash flow	₩ 1,634,180

XML

Financial Instruments - Maturity Analysis of Derivative Financial Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	₩ 142,280	₩ 122,896
Currency forward [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	10,044
Currency futures [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	84,466
Currency swaps [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	36,057
Interest swaps [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	153
Other forwards [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	24,790
Less than 1 year [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	69,872
Less than 1 year [member] | Currency forward [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	9,744
Less than 1 year [member] | Currency futures [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	9,632
Less than 1 year [member] | Currency swaps [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	25,553
Less than 1 year [member] | Interest swaps [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	153
Less than 1 year [member] | Other forwards [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	24,790
1 year - 5 years [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	85,638
1 year - 5 years [member] | Currency forward [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	300
1 year - 5 years [member] | Currency futures [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	74,834
1 year - 5 years [member] | Currency swaps [member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Derivative financial liabilities	₩ 10,504

XML

Financial Instruments - Exposure to Currency Risk (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of nature and extent of risks arising from financial instruments [line items]
Assets	₩ 23,321,693	₩ 21,942,685
Liabilities	26,650,935	29,060,967
Currency risk [member] | USD [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Assets	4,215,151	5,007,649
Liabilities	5,940,380	6,636,065
Currency risk [member] | EUR [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Assets	552,630	463,110
Liabilities	454,072	550,235
Currency risk [member] | JPY [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Assets	165,356	45,975
Liabilities	709,318	821,403
Currency risk [member] | Others [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Assets	220,723	219,444
Liabilities	₩ 117,632	₩ 286,112

XML

Financial Instruments - Changes in Gain or Loss Due to a Hypothetically Strengthening or Weakening in Foreign Currencies (Detail) - KRW (₩)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
10% increase [member] | USD [member]
Disclosure of detailed information about hedging instruments [line items]
Changes in gain or loss due to hypothetically strengthens or weakens of functional currency against foreign currencies other than functional currency	₩ (172,523)	₩ (162,842)
Hypothetical percentage change in functional currency against foreign currencies other than functional currency	10.00%	10.00%
10% increase [member] | EUR [member]
Disclosure of detailed information about hedging instruments [line items]
Changes in gain or loss due to hypothetically strengthens or weakens of functional currency against foreign currencies other than functional currency	₩ 9,856	₩ (8,713)
Hypothetical percentage change in functional currency against foreign currencies other than functional currency	10.00%	10.00%
10% increase [member] | JPY [member]
Disclosure of detailed information about hedging instruments [line items]
Changes in gain or loss due to hypothetically strengthens or weakens of functional currency against foreign currencies other than functional currency	₩ (54,396)	₩ (77,543)
Hypothetical percentage change in functional currency against foreign currencies other than functional currency	10.00%	10.00%
10% decrease [member] | USD [member]
Disclosure of detailed information about hedging instruments [line items]
Changes in gain or loss due to hypothetically strengthens or weakens of functional currency against foreign currencies other than functional currency	₩ 172,523	₩ 162,842
Hypothetical percentage change in functional currency against foreign currencies other than functional currency	10.00%	10.00%
10% decrease [member] | EUR [member]
Disclosure of detailed information about hedging instruments [line items]
Changes in gain or loss due to hypothetically strengthens or weakens of functional currency against foreign currencies other than functional currency	₩ (9,856)	₩ 8,713
Hypothetical percentage change in functional currency against foreign currencies other than functional currency	10.00%	10.00%
10% decrease [member] | JPY [member]
Disclosure of detailed information about hedging instruments [line items]
Changes in gain or loss due to hypothetically strengthens or weakens of functional currency against foreign currencies other than functional currency	₩ 54,396	₩ 77,543
Hypothetical percentage change in functional currency against foreign currencies other than functional currency	10.00%	10.00%

XML

Financial Instruments - Carrying Amount of Interest-Bearing Financial Instruments (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of nature and extent of risks arising from financial instruments [line items]
Financial assets	₩ 23,321,693	₩ 21,942,685
Financial liabilities	(26,650,935)	(29,060,967)
Fixed rate [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Financial assets	10,943,300	8,650,483
Financial liabilities	(11,179,635)	(10,794,724)
Financial asset and liabilities	(236,335)	(2,144,241)
Variable rate [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Financial liabilities	₩ (9,977,040)	₩ (12,024,683)

XML

Financial Instruments - Changes in Interest Expense Due to an Increases or Decreases in Interest Rate (Detail) - Variable rate [member] - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
1% increase in floating rates [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Hypothetical percentage change in the floating rate	1.00%	1.00%
Change in interest expense due to hypothetical increase or decrease in the floating rate	₩ (99,770)	₩ (120,247)
1% decrease in floating rates [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Hypothetical percentage change in the floating rate	(1.00%)	(1.00%)
Change in interest expense due to hypothetical increase or decrease in the floating rate	₩ 99,770	₩ 120,247

XML

Financial Instruments - Carrying Amount and Fair Value of Financial Instruments (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	₩ 1,978,115	₩ 2,514,924
Derivatives assets	65,051	147,582
Cash and cash equivalents	2,612,530	2,447,619
Held-to-maturity financial assets	5,211	2,470
Derivatives liabilities	142,280	122,896
Trade accounts and notes payable	3,477,678	4,117,798
Borrowings	21,063,657	22,704,998
Financial guarantee liabilities	88,407	108,161
Others	1,865,683	2,007,114
Liabilities measured at amortized cost	26,495,425
Assets measured at amortized cost [member]
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	2,612,530	2,447,619
Trade accounts and notes receivable, net	9,556,133	9,725,150
Loans and other receivables, net	9,099,444	7,104,940
Held-to-maturity financial assets	5,211	2,470
Assets measured at amortized cost	21,273,318	19,280,179
Liabilities measured at amortized cost [member]
Disclosure of detailed information about financial instruments [line items]
Trade accounts and notes payable	3,477,678	4,117,798
Borrowings	21,063,657	22,704,998
Financial guarantee liabilities	88,407	108,161
Others	1,865,683	2,007,114
Liabilities measured at amortized cost	26,495,425	28,938,071
Assets measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	1,506,893	2,139,687
Financial assets held for trading	1,970
Derivatives assets	68,290	147,582
Assets measured at fair value	1,577,153	2,287,269
Liabilities measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Derivatives liabilities	155,510	122,896
Fair value [member] | Assets measured at amortized cost [member]
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	2,612,530	2,447,619
Trade accounts and notes receivable, net	9,556,133	9,725,150
Loans and other receivables, net	9,099,444	7,104,940
Held-to-maturity financial assets	5,211	2,470
Assets measured at amortized cost	21,273,318	19,280,179
Fair value [member] | Liabilities measured at amortized cost [member]
Disclosure of detailed information about financial instruments [line items]
Trade accounts and notes payable	3,477,678	4,117,798
Borrowings	21,217,415	22,956,571
Financial guarantee liabilities	88,407	108,161
Others	1,865,683	2,007,114
Liabilities measured at amortized cost	26,649,183	29,189,644
Fair value [member] | Assets measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	1,506,893	2,139,687
Financial assets held for trading	1,970
Derivatives assets	68,290	147,582
Assets measured at fair value	1,577,153	2,287,269
Fair value [member] | Liabilities measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Derivatives liabilities	₩ 155,510	₩ 122,896

XML

Financial Instruments - Fair Values of Financial Assets and Financial Liabilities by Fair Value Hierarchy (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	₩ 1,978,115	₩ 2,514,924
Derivatives assets	65,051	147,582
Derivatives liabilities	142,280	122,896
Assets measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	1,506,893	2,139,687
Financial assets held for trading	1,970
Derivatives assets	68,290	147,582
Assets measured at fair value	1,577,153	2,287,269
Liabilities measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Derivatives liabilities	155,510	122,896
Fair value [member] | Assets measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	1,506,893	2,139,687
Financial assets held for trading	1,970
Derivatives assets	68,290	147,582
Assets measured at fair value	1,577,153	2,287,269
Fair value [member] | Assets measured at fair value [member] | Level 1 [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	1,137,662	1,800,943
Assets measured at fair value	1,137,662	1,800,943
Fair value [member] | Assets measured at fair value [member] | Level 2 [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	17,812
Financial assets held for trading	1,970
Derivatives assets	68,290	137,236
Assets measured at fair value	88,072	137,236
Fair value [member] | Assets measured at fair value [member] | Level 3 [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	351,419	338,744
Derivatives assets		10,346
Assets measured at fair value	351,419	349,090
Fair value [member] | Liabilities measured at fair value [member]
Disclosure of detailed information about financial instruments [line items]
Derivatives liabilities	155,510	122,896
Fair value [member] | Liabilities measured at fair value [member] | Level 2 [member]
Disclosure of detailed information about financial instruments [line items]
Derivatives liabilities	₩ 155,510	₩ 122,896

XML

Financial Instruments - Value Measurement Method and Significant but not Observable Inputs for the Financial Assets Classified as Fair Value Hierarchy Level 3 (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩)	Dec. 31, 2016 KRW (₩)
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Available-for-sale financial assets	₩ 1,978,115	₩ 2,514,924
Fair value [member] | Discounted cash flow [member] | Level 3 [member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Available-for-sale financial assets	235,803
Fair value [member] | PeerGroupUsage [member] | Level 3 [member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Available-for-sale financial assets	14,775
Fair value [member] | Asset value approach [member] | Level 3 [member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Available-for-sale financial assets	₩ 100,841
Fair value [member] | Available-for-sale financial assets [member] | Level 3 [member] | Bottom of range [member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Growth rate	0.00%
Discount rate	0.50%
Price multiple	1.085
Fair value [member] | Available-for-sale financial assets [member] | Level 3 [member] | Top of range [member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Growth rate	2.00%
Discount rate	11.90%
Price multiple	5.245

XML

Financial Instruments - Sensitivity Analysis of Financial Assets and Financial Liabilities Classified as Level 3 of Fair Value Hierarchy (Detail) - Available-for-sale financial assets [member] ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩)
Fluctuation 0.5% of growth rate [Member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Favorable changes	₩ 5,713
Unfavorable changes	4,641
Fluctuation 0.5% of discount rate [Member]
Disclosure of significant unobservable inputs used in fair value measurement of assets [line items]
Favorable changes	27,238
Unfavorable changes	₩ 22,724

XML

Financial Instruments - Changes in Fair Value of Financial Assets and Financial Liabilities Classified as Level 3 (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of fair value measurement of assets [line items]
Beginning	₩ 80,137,614
Impairment	(123,214)	₩ (248,404)	₩ (142,781)
Ending	79,785,629	80,137,614
Fair value [member] | Level 3 [member]
Disclosure of fair value measurement of assets [line items]
Beginning	466,407	349,090
Acquisition and others	47,493	129,766
Gain (loss) on valuations of derivatives	(59,829)	(10,346)
Other comprehensive income (loss)	(38,731)	35,126
Impairment	(19,111)	(107,934)
Disposal and others	(47,139)	(44,283)
Ending	₩ 349,090	₩ 466,407	₩ 349,090

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Share Capital and Capital Surplus - Summary of Share Capital (Detail) - KRW (₩) ₩ / shares in Units, ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of classes of share capital [abstract]
Authorized shares	200,000,000	200,000,000
Par value	₩ 5,000	₩ 5,000
Issued shares(*1)	87,186,835	87,186,835	87,186,835
Shared capital(*2)	₩ 482,403	₩ 482,403

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Share Capital and Capital Surplus - Summary of Share Capital (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of classes of share capital [line items]
Total shares of ADRs outstanding	79,999,604	79,997,665	79,995,648
Total shares of ADRs outstanding, equivalent common stock shares	9,210,073
Difference between the ending balance of common stock and the par value of issued common stock due to retirement of treasury stocks	₩ 46,469
Retirement of treasury stock	9,293,790
ADRs [Member]
Disclosure of classes of share capital [line items]
Total shares of ADRs outstanding	36,840,292

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Share Capital and Capital Surplus - Changes in Issued Common Stock (Detail) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of classes of share capital [abstract]
Shares issued beginning balance	87,186,835	87,186,835
Disposal of treasury shares	0	0
Shares issued ending balance	87,186,835	87,186,835
Treasury shares beginning balance	(7,189,170)	(7,191,187)
Disposal of treasury shares	1,939	2,017
Treasury shares ending balance	(7,187,231)	(7,189,170)
Number of outstanding shares beginning balance	79,997,665	79,995,648
Disposal of treasury shares	1,939	2,017
Number of outstanding shares ending balance	79,999,604	79,997,665

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Share Capital and Capital Surplus - Summary of Capital Surplus (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Statement of changes in equity [abstract]
Share premium	₩ 463,825	₩ 463,825
Gain on disposal of treasury shares	783,914	783,788
Other capital deficit	174,282	159,634
Capital surplus	₩ 1,422,021	₩ 1,407,247

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Share Capital and Capital Surplus - Summary of Redeemable Convertible Preferred Shares (Detail) - Redeemable Convertible Preferred Stock [Member]	12 Months Ended
	Dec. 31, 2017 ₩ / shares shares
Disclosure Of Redeemable Convertible Preferred Shares [Line Items]
Issue date	Feb. 25, 2017
Number of shares issued | shares	8,643,193
Price per share | ₩ / shares	₩ 28,346
Voting rights	No voting rights for 3 years from issue date
Dividend rights	Comparative, Non-participating
Dividend rate description	Minimum dividend rate for 1~3 years:3.98%
Dividend rate	3.98%
Dividend rate issuance spread on comparative rate	Minimum dividend rate after 4 years : Comparative rate + Issuance spread + 2%
Details about redemption	Issuer can demand redemption of all or part of redeemable convertible preferred shares every year after the issue date, for a period of 10 years from the issue date.
Details about Conversion	Stockholders of redeemable convertible preferred shares can convert them to common shares from 3 years after the issue date to the end of the redemption period (10 years). Conversion price is equal to issue price, which could be adjusted according to anti-dilution clause.

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Hybrid Bonds - Summary of Hybrid Bonds (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 996,919	₩ 996,919
Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Jun. 13, 2013
Date of maturity	Jun. 13, 2043
Interest rate (%)	4.30%
Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Jun. 13, 2013
Date of maturity	Jun. 13, 2043
Interest rate (%)	4.60%	4.60%
Gross amount [member] | Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 800,000	₩ 800,000
Gross amount [member] | Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	200,000	200,000
Issuance cost [Member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ (3,081)	₩ (3,081)

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Hybrid Bonds - Summary of Hybrid Bonds (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 996,919	₩ 996,919
Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	30 years (POSCO has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-06-12: 4.3% Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.3% · After 10 years: additionally +0.25% according to Step-up clauses After 25 years: additionally +0.75%
Interest rate (%)	4.30%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to POSCO)
Others	POSCO can call the hybrid bond at year 5 and interest payment date afterwards
Hybrid bond 1-1 [member] | After 5 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	1.30%
Hybrid bond 1-1 [member] | After 10 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.25%
Hybrid bond 1-1 [member] | After 25 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.75%
Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Maturity date		30 years (POSCO has a right to extend the maturity date)
Interest rate		Issue date ~ 2023-06-12: 4.6% Reset every 10 years as follows;· After 10 years: return on government bond (10 years) + 1.4% · After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest rate (%)	4.60%	4.60%
Interest payments condition		Quarterly (Optional deferral of interest payment is available to POSCO)
Others		POSCO can call the hybrid bond at year 10 and interest payment date afterwards
Hybrid bond 1-2 [member] | After 10 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment		0.25%
Hybrid bond 1-2 [member] | After 10 years : Return on Government Bond [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment		1.40%
Hybrid bond 1-2 [member] | After 30 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment		0.75%
Gross amount [member] | Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 800,000	₩ 800,000
Gross amount [member] | Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 200,000	₩ 200,000

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Hybrid Bonds - Additional Information (Detail) - Hybrid bonds [member] ₩ in Millions	Dec. 31, 2017 KRW (₩)
Disclosure of detailed information about borrowings [line items]
Interest accumulated but not paid on hybrid bonds	₩ 2,389
POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest accumulated but not paid on hybrid bonds	₩ 2,004

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Hybrid Bonds - Hybrid Bonds Issued by POSCO ENERGY Co., Ltd. (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Hybrid bond	₩ 996,919	₩ 996,919
Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Jun. 13, 2013
Date of maturity	Jun. 13, 2043
Interest rate (%)	4.30%
Hybrid bond 1-1 [member] | After 25 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.75%
Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Jun. 13, 2013
Date of maturity	Jun. 13, 2043
Interest rate (%)	4.60%	4.60%
Gross amount [member] | Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	₩ 800,000	₩ 800,000
Gross amount [member] | Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	200,000	200,000
Issuance cost [Member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	(3,081)	(3,081)
POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	₩ 498,468	498,468
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Aug. 29, 2013
Date of maturity	Aug. 29, 2043
Interest rate (%)	4.66%
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-1 [member] | After 25 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.75%
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Aug. 29, 2013
Date of maturity	Aug. 29, 2043
Interest rate (%)	4.72%
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-3 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Aug. 29, 2013
Date of maturity	Aug. 29, 2043
Interest rate (%)	4.72%
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-4 [member]
Disclosure of detailed information about borrowings [line items]
Date of issue	Aug. 29, 2013
Date of maturity	Aug. 29, 2043
Interest rate (%)	5.21%
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-2 and 1-3 [Member]
Disclosure of detailed information about borrowings [line items]
Interest rate (%)	4.72%
POSCO ENERGY CO., LTD. [member] | Hybrid bond 1-2 and 1-3 [Member] | After 25 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.75%
POSCO ENERGY CO., LTD. [member] | Gross amount [member] | Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	₩ 165,000	165,000
POSCO ENERGY CO., LTD. [member] | Gross amount [member] | Hybrid bond 1-2 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	165,000	165,000
POSCO ENERGY CO., LTD. [member] | Gross amount [member] | Hybrid bond 1-3 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	30,000	30,000
POSCO ENERGY CO., LTD. [member] | Gross amount [member] | Hybrid bond 1-4 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	140,000	140,000
POSCO ENERGY CO., LTD. [member] | Gross amount [member] | Hybrid bond 1-2 and 1-3 [Member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	195,000
POSCO ENERGY CO., LTD. [member] | Issuance cost [Member]
Disclosure of detailed information about borrowings [line items]
Hybrid bond	₩ (1,532)	₩ (1,532)

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Hybrid Bonds - Hybrid Bonds Issued by POSCO ENERGY Co., Ltd. (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 996,919	₩ 996,919
POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 498,468	498,468
Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	30 years (POSCO has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-06-12: 4.3% Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.3% · After 10 years: additionally +0.25% according to Step-up clauses After 25 years: additionally +0.75%
Interest rate (%)	4.30%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to POSCO)
Others	POSCO can call the hybrid bond at year 5 and interest payment date afterwards
Hybrid bond 1-1 [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate	Issue date ~ 2018-08-29: 4.66%Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.39%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%
Interest rate (%)	4.66%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company but for hybrid bond 1-3, the Company pays every quarter(3/30, 6/30, 9/30, 12/30))
Others	The issuer can call the hybrid bond at year 5 and interest payment date afterwards
Hybrid bond 1-1 [member] | After 5 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	1.30%
Hybrid bond 1-1 [member] | After 5 years [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	1.39%
Hybrid bond 1-1 [member] | After 10 years [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.25%
Hybrid bond 1-1 [member] | After 10 years [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.25%
Hybrid bond 1-4 [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	30 years (The Company has a right to extend the maturity date)
Interest rate	Issue date ~ 2023-08-29: 5.21%Reset every 10 years as follows; · After 10 years: return on government bond (10 years) + 1.55%· After 10 years: additionally +0.25% according to Step-up clauses · After 30 years: additionally +0.75%
Interest rate (%)	5.21%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company but for hybrid bond 1-3, the Company pays every quarter(3/30, 6/30, 9/30, 12/30))
Others	The issuer can call the hybrid bond at year 10 and interest payment date afterwards
Hybrid bond 1-4 [member] | After 10 years : Return on Government Bond [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	1.55%
Hybrid bond 1-4 [member] | After 10 years [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.25%
Hybrid bond 1-4 [member] | After 30 years [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.75%
Hybrid bond 1-2 and 1-3 [Member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	30 years (The Company has a right to extend the maturity date)
Interest rate	Issue date ~ 2018-08-29: 4.72%Reset every 5 years as follows; · After 5 years: return on government bond (5 years) + 1.45%· After 10 years: additionally +0.25% according to Step-up clauses · After 25 years: additionally +0.75%
Interest rate (%)	4.72%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company but for hybrid bond 1-3, the Company pays every quarter(3/30, 6/30, 9/30, 12/30))
Others	The issuer can call the hybrid bond at year 5 and interest payment date afterwards
Hybrid bond 1-2 and 1-3 [Member] | After 5 years [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	1.45%
Hybrid bond 1-2 and 1-3 [Member] | After 10 years [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Interest rate adjustment	0.25%
Gross amount [member] | Hybrid bond 1-1 [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 800,000	800,000
Gross amount [member] | Hybrid bond 1-1 [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	165,000	165,000
Gross amount [member] | Hybrid bond 1-4 [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	140,000	₩ 140,000
Gross amount [member] | Hybrid bond 1-2 and 1-3 [Member] | POSCO ENERGY CO., LTD. [member]
Disclosure of detailed information about borrowings [line items]
Hybrid bonds classified as equity	₩ 195,000

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Reserves - Summary of Reserves (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of reserves within equity [abstract]
Accumulated comprehensive loss of investments in associates and joint ventures	₩ (516,528)	₩ (301,734)
Changes in the unrealized fair value of available-for-saleinvestments	230,190	276,143	₩ (38,294)
Currency translation differences	(372,166)	(99,264)
Gain or losses on valuation of derivatives	(136)
Others	(23,916)	(19,130)
Reserves	₩ (682,556)	₩ (143,985)

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Reserves - Changes in the Unrealized Fair Value of Available-for-sale Investments (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of reserves within equity [abstract]
Changes in unrealized fair value of available-for-sale investments, beginning balance	₩ 276,143	₩ (38,294)
Changes in the unrealized fair value of available-for-sale investments	183,761	218,542
Reclassification to profit or loss upon disposal	(299,862)	(88,781)
Impairment of available-for-sale investments	96,083	187,108
Others	(25,935)	(2,432)
Changes in unrealized fair value of available-for-sale investments, ending balance	₩ 230,190	₩ 276,143

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Treasury Shares - Changes in Treasury Shares (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of shares, Beginning	7,189,170	7,191,187
Number of shares, Disposal of treasury shares	(1,939)	(2,017)
Number of shares, Ending	7,187,231	7,189,170	7,191,187
Amount, Beginning	₩ 1,533,468
Amount, Disposal of treasury shares	(540)	₩ (462)	₩ (524)
Amount, Ending	₩ 1,533,054	₩ 1,533,468
Treasury shares [member]
Number of shares, Beginning	7,189,170	7,191,187
Number of shares, Disposal of treasury shares	(1,939)	(2,017)
Number of shares, Ending	7,187,231	7,189,170	7,191,187
Amount, Beginning	₩ 1,533,468	₩ 1,533,898
Amount, Disposal of treasury shares	(414)	(430)	₩ (559)
Amount, Ending	₩ 1,533,054	₩ 1,533,468	₩ 1,533,898

XML

Revenue - Details of Revenue (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue [abstract]
Sale of goods	₩ 51,357,709	₩ 43,683,169	₩ 47,018,466
Services	2,064,583	2,276,534	2,489,447
Construction revenue	6,299,483	6,497,723	8,546,454
Rental income	6,370	8,930	11,757
Others	458,722	473,415	456,144
Revenue	₩ 60,186,867	₩ 52,939,771	₩ 58,522,268

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Construction Contracts - Details of In-Progress Construction Contracts (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of construction contract [Abstract]
Aggregate amount of costs incurred	₩ 21,404,321	₩ 22,012,241
Add: Recognized profits	1,524,208	1,429,555
Less: Recognized losses	(718,593)	(1,139,165)
Cumulative construction revenue	22,209,936	22,302,631
Less: Progress billing	(22,265,891)	(22,483,968)
Others	994	9,961
Construction contract in progress	₩ (54,961)	₩ (171,376)

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Construction Contracts - Details of Due from/to Customers for Contract Work (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of construction contract [Abstract]
Unbilled due from customers for contract work	₩ 728,007	₩ 860,287
Due to customers for contract work	(782,968)	(1,031,663)
Construction contract in progress	₩ (54,961)	₩ (171,376)

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Construction Contracts - Details of Changes in Estimated Total Contract Costs and Impact on Profit Before Income Taxes (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of construction contract [Abstract]
Changes in estimated total contract costs	₩ 164,812	₩ 532,801
Changes in profit before income taxes of construction contract :
Current period	(69,656)	(790,391)
Future periods	₩ (6,041)	₩ 69,464

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Selling and Administrative Expenses - Summary of Administrative Expenses (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of comprehensive income [Line Items]
Wages and salaries	₩ 3,105,364	₩ 3,016,488	₩ 3,186,237
Expenses related to post-employment benefits	199,926	287,607	245,402
Depreciation	2,887,646	2,835,843	2,836,663
Amortization	409,774	378,004	381,583
Electricity expenses	933,045	1,018,429	1,251,546
Research & development	486,888	444,798	491,681
Vehicles maintenance	1,336,969	1,342,009	1,531,906
Increase to provisions	215,383	189,914	86,903
Bad debt expenses	271,871	202,717	337,235
Total administrative expenses	2,176,800	2,291,540	2,395,248
Administrative expenses [member]
Statement of comprehensive income [Line Items]
Wages and salaries	774,900	769,589	810,851
Expenses related to post-employment benefits	78,654	200,956	87,293
Other employee benefits	159,920	176,794	193,967
Travel	39,790	40,828	48,426
Depreciation	97,261	103,442	105,470
Amortization	146,314	139,569	168,525
Communication	11,740	11,186	12,502
Electricity expenses	7,050	7,527	9,573
Taxes and public dues	72,826	78,895	74,315
Rental	69,976	82,005	119,836
Repairs	9,859	11,316	11,677
Entertainment	11,582	13,157	15,740
Advertising	119,724	86,141	90,698
Research & development	125,795	120,608	135,508
Service fees	193,387	201,129	218,751
Vehicles maintenance	8,211	10,090	10,756
Industry association fee	10,140	13,468	12,603
Conference	14,494	13,108	16,053
Increase to provisions	10,990	6,532	14,900
Bad debt expenses	173,694	165,150	189,616
Others	₩ 40,493	₩ 40,050	₩ 48,188

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Selling and Administrative Expenses - Summary of Selling Expenses (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of comprehensive income [Line Items]
Freight and custody expenses	₩ 1,336,969	₩ 1,342,009	₩ 1,531,906
Sales commissions	115,925	94,377	80,165
Total Selling expenses	1,557,277	1,553,686	1,728,956
Selling expenses [Member]
Statement of comprehensive income [Line Items]
Freight and custody expenses	1,336,969	1,342,009	1,531,906
Operating expenses for distribution center	10,503	10,315	11,021
Sales commissions	115,925	94,377	80,165
Sales advertising	3,800	5,117	3,220
Sales promotion	12,414	10,670	22,443
Sample	1,989	2,335	2,576
Sales insurance premium	36,546	31,379	30,682
Contract cost	23,061	49,480	38,425
Others	₩ 16,070	₩ 8,004	₩ 8,518

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Research and Development Expenditures Recognized as Expenses - Summary of Research and Development Expenditures Recognized as Expenses (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of comprehensive income [Line Items]
Research and development expenditures recognized as expenses	₩ 486,888	₩ 444,798	₩ 491,681
Administrative expenses [member]
Statement of comprehensive income [Line Items]
Research and development expenditures recognized as expenses	125,795	120,608	135,508
Cost of sales [member]
Statement of comprehensive income [Line Items]
Research and development expenditures recognized as expenses	₩ 361,093	₩ 324,190	₩ 356,173

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Other Operating Income and Expenses - Details of Other Operating Income and Expenses (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Other operating income
Gain on disposal of assets held for sale	₩ 1,180	₩ 23,112	₩ 227,956
Gain on disposal of investments in subsidiaries, associates and joint ventures	81,794	23,305	88,718
Gain on disposal of property, plant and equipment	32,145	23,826	22,730
Gain on disposal of intangible assets	23,391	671	1,432
Recovery of allowance for other doubtful accounts	2,743	12,658	10,452
Gain on valuation of firm commitment	56,301
Rental revenues	1,498	1,771	1,019
Gain on insurance proceeds	5,878	22,400	14,976
Others	246,294	107,393	181,765
Other operating income	451,224	215,136	549,048
Other operating expenses
Impairment losses on assets held for sale		(24,890)	(133,547)
Loss on disposal of assets held for sale	(608)	(254)	(190,357)
Loss on disposal of investments in subsidiaries, associates and joint ventures	(19,985)	(22,499)	(18,996)
Loss on disposal of property, plant and equipment	(151,343)	(86,622)	(101,732)
Impairment losses on property, plant and equipment	(117,231)	(196,882)	(136,269)
Impairment losses on goodwill and intangible assets	(167,995)	(127,875)	(161,412)
Other bad debt expenses	(100,920)	(50,225)	(158,071)
Loss on valuation of firm commitment	(43,164)
Idle tangible asset expenses	(10,490)	(6,437)	(12,773)
Incease to provisions	(33,964)	(53,058)	(18,396)
Donations	(51,424)	(43,810)	(62,957)
Others	(95,172)	(143,168)	(447,788)
Other operating expenses	₩ (792,296)	₩ (755,720)	₩ (1,442,298)

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Other Operating Income and Expenses - Details of Other Operating Income and Expenses (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2015
Analysis of income and expense [abstract]
Refund of VAT and other taxes	₩ 160,501
Settlement with Nippon Steel & Sumitomo Metal Corporation for a civil lawsuit		₩ 299,037

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Finance Income and Costs - Details of Finance Income and Costs (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finance income
Interest income	₩ 212,451	₩ 182,475	₩ 210,193
Dividend income	92,962	41,000	183,712
Gain on foreign currency transactions	785,616	1,032,552	1,025,240
Gain on foreign currency translations	564,016	377,723	466,090
Gain on derivatives transactions	210,727	316,524	366,482
Gain on valuations of derivatives	64,735	147,111	155,334
Gain on disposals of available-for-sale financial assets	425,684	130,830	139,136
Others	16,476	3,765	10,886
Finance income	2,372,667	2,231,980	2,557,073
Finance costs
Interest expenses	(653,115)	(658,726)	(788,772)
Loss on foreign currency transactions	(756,654)	(1,147,192)	(1,157,161)
Loss on foreign currency translations	(422,880)	(405,391)	(716,722)
Loss on derivatives transactions	(236,273)	(338,314)	(343,118)
Loss on valuation of derivatives	(226,487)	(162,676)	(72,133)
Impairment loss on available-for-sale financial assets	(123,214)	(248,404)	(142,781)
Others	(65,654)	(53,487)	(166,367)
Finance costs	₩ (2,484,277)	₩ (3,014,190)	₩ (3,387,054)

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Expenses by Nature - Summary of Expenses by Nature (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Analysis of income and expense [abstract]
Raw material used, changes in inventories and others	₩ 35,584,184	₩ 30,177,732	₩ 33,939,108
Employee benefits expenses	3,357,861	3,444,276	3,472,295
Outsourced processing cost	7,074,948	7,678,055	8,681,271
Electricity expenses	933,045	1,018,429	1,251,546
Depreciation	2,887,646	2,835,843	2,836,663
Amortization	409,774	378,004	381,583
Freight and custody expenses	1,336,969	1,342,009	1,531,906
Sales commissions	115,925	94,377	80,165
Loss on disposal of property, plant and equipment	151,343	86,622	101,732
Impairment loss on property, plant and equipment	117,231	196,882	136,269
Impairment loss on goodwill and intangible assets	167,995	127,875	161,412
Increase to provisions	215,383	189,914	86,903
Donations	51,424	43,810	62,957
Other expenses	4,038,242	3,258,583	4,861,126
Expenses by nature	56,441,970	50,872,411	57,584,936
Wages and salaries	3,105,364	3,016,488	3,186,237
Expenses related to post-employment benefits	252,497	427,788	286,058
Employee benefits expenses	₩ 3,357,861	₩ 3,444,276	₩ 3,472,295

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Income Taxes - Summary of Income Tax Expense (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Major components of tax expense (income) [abstract]
Current income taxes	₩ 864,143	₩ 699,269	₩ 553,041
Deferred income tax due to temporary differences	300,037	(209,706)	(253,860)
Items recorded directly in equity	21,560	(110,019)	(32,621)
Income tax expense	₩ 1,185,740	₩ 379,544	₩ 266,560

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Income Taxes - Income Tax Credit (Charged) Directly to Equity (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current and deferred tax relating to items charged or credited directly to equity [abstract]
Net changes in the unrealized fair value of available-for-saleinvestments	₩ 1,271	₩ (100,550)	₩ 60,077
Loss (gain) on sale of treasury shares	(40)	(10)	12
Other capital surplus			(86,765)
Others	20,329	(9,459)	(5,945)
Income taxes credited (charged) directly to equity	₩ 21,560	₩ (110,019)	₩ (32,621)

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Income Taxes - Additional Information (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Major components of tax expense (income) [abstract]
POSCO's statutory rate	24.20%	24.20%	24.20%
Deductible temporary differences	₩ 5,300,667	₩ 4,612,900
Taxable temporary differences, not recognized	4,362,127	3,933,428
Deferred tax liabilities, not recognized	₩ 1,137,632	₩ 951,890

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Income Taxes - Reconciliation Of Calculated Income Tax Expense Based on the Statutory Rate to Actual Amount of Taxes Recorded (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of accounting profit multiplied by applicable tax rates [abstract]
Profit before income tax expense	₩ 4,095,051	₩ 1,411,609	₩ 150,345
Income tax expense computed at statutory rate	990,540	341,148	35,921
Adjustments:
Tax credits	(40,757)	(30,124)	(152,139)
Over provisions from prior years	(20,912)	(11,829)	(47,053)
Investment in subsidiaries, associates and joint ventures	55,113	76,751	439,575
Tax effects due to permanent differences	4,798	(9,962)	(26,045)
Effect of tax rate change	175,647
Others	21,311	13,560	16,301
Adjustments	195,200	38,396	230,639
Income tax expense	₩ 1,185,740	₩ 379,544	₩ 266,560
Effective tax rate	28.96%	26.89%	177.30%

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Income Taxes - Reconciliation Of Calculated Income Tax Expense Based on the Statutory Rate to Actual Amount of Taxes Recorded (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of Income Taxes [Line Items]
Statutory rate		24.20%	24.20%	24.20%
Changes in tax rates or tax laws enacted or announced [member]
Disclosure of Income Taxes [Line Items]
Statutory rate	27.50%
Excess of taxable income enacted	₩ 300,000

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Income Taxes - Movements in Deferred Tax Assets (Liabilities) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	₩ (142,720)	₩ (342,873)
Inc. (Dec.)	(298,467)	200,153
Ending	(441,187)	(142,720)
Allowance for credit losses [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	213,119	202,592
Inc. (Dec.)	60,875	10,527
Ending	273,994	213,119
Reserve for technology developments [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(91,960)	(177,676)
Inc. (Dec.)	53,973	85,716
Ending	(37,987)	(91,960)
Property, plant and equipment depreciation [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(11,639)	(15,240)
Inc. (Dec.)	26,280	3,601
Ending	14,641	(11,639)
Share of profit or loss of equity-accounted investees [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	70,259	(45,174)
Inc. (Dec.)	125,783	115,433
Ending	196,042	70,259
Allowance for inventories valuation [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	15,651	13,373
Inc. (Dec.)	(4,871)	2,278
Ending	10,780	15,651
Property, plant and equipment revaluation [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(1,524,149)	(1,393,501)
Inc. (Dec.)	(304,015)	(130,648)
Ending	(1,828,164)	(1,524,149)
Prepaid expenses [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	19,665	19,180
Inc. (Dec.)	335	485
Ending	20,000	19,665
Property, plant and equipment impairment loss [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	5,295	8,055
Inc. (Dec.)	245	(2,760)
Ending	5,540	5,295
Gain or loss on foreign currency [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(5,957)	(29,355)
Inc. (Dec.)	(42,515)	23,398
Ending	(48,472)	(5,957)
Defined benefit obligations [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	361,838	354,175
Inc. (Dec.)	68,279	7,663
Ending	430,117	361,838
Plan assets [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(316,525)	(287,839)
Inc. (Dec.)	(36,129)	(28,686)
Ending	(352,654)	(316,525)
Provision for construction losses [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	997	612
Inc. (Dec.)	(556)	385
Ending	441	997
Provision for construction warranty [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	24,322	21,604
Inc. (Dec.)	4,395	2,718
Ending	28,717	24,322
Accrued income [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(9,441)	(8,982)
Inc. (Dec.)	(3,474)	(459)
Ending	(12,915)	(9,441)
Impairment loss on AFS [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	245,168	266,474
Inc. (Dec.)	(42,373)	(21,306)
Ending	202,795	245,168
Difference in acquisition costs of treasury shares [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	62,099	62,116
Inc. (Dec.)	8,448	(17)
Ending	70,547	62,099
Other [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	403,748	296,207
Inc. (Dec.)	(27,740)	107,541
Ending	376,008	403,748
Temporary differences [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(537,510)	(713,379)
Inc. (Dec.)	(113,060)	175,869
Ending	(650,570)	(537,510)
Unrealized fair value of available-for-sale investments [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	(50,507)	50,043
Inc. (Dec.)	1,271	(100,550)
Ending	(49,236)	(50,507)
Other deferred income taxes recognized directly to equity [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	51,832	61,291
Inc. (Dec.)	20,329	(9,459)
Ending	72,161	51,832
Deferred income taxes recognized directly to equity [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	1,325	111,334
Inc. (Dec.)	21,600	(110,009)
Ending	22,925	1,325
Tax credit carryforward and others [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	307,335	277,261
Inc. (Dec.)	(189,303)	30,074
Ending	118,032	307,335
Investments in subsidiaries, associates and joint ventures [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning	86,130	(18,089)
Inc. (Dec.)	(17,704)	104,219
Ending	₩ 68,426	₩ 86,130

XML

Income Taxes - Summary of Deferred Tax Assets And Liabilities (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	₩ 2,811,648	₩ 2,714,516
Liabilities	(3,252,835)	(2,857,236)
Net	(441,187)	(142,720)	₩ (342,873)
Allowance for credit losses [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	273,994	213,119
Net	273,994	213,119	202,592
Reserve for technology developments [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Liabilities	(37,987)	(91,960)
Net	(37,987)	(91,960)	(177,676)
Property, plant and equipment depreciation [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	59,912	50,843
Liabilities	(45,271)	(62,482)
Net	14,641	(11,639)	(15,240)
Share of profit or loss of equity-accounted investees [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	236,637	178,538
Liabilities	(40,595)	(108,279)
Net	196,042	70,259	(45,174)
Allowance for inventories valuation [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	10,780	15,651
Net	10,780	15,651	13,373
Property, plant and equipment revaluation [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Liabilities	(1,828,164)	(1,524,149)
Net	(1,828,164)	(1,524,149)	(1,393,501)
Prepaid expenses [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	20,000	19,665
Net	20,000	19,665	19,180
Property, plant and equipment impairment loss [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	5,639	5,397
Liabilities	(99)	(102)
Net	5,540	5,295	8,055
Gain or loss on foreign currency [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	113,760	99,836
Liabilities	(162,232)	(105,793)
Net	(48,472)	(5,957)	(29,355)
Defined benefit obligations [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	430,117	361,838
Net	430,117	361,838	354,175
Plan assets [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Liabilities	(352,654)	(316,525)
Net	(352,654)	(316,525)	(287,839)
Provision for construction losses [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	441	997
Net	441	997	612
Provision for construction warranty [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	28,717	24,322
Net	28,717	24,322	21,604
Accrued income [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Liabilities	(12,915)	(9,441)
Net	(12,915)	(9,441)	(8,982)
Impairment loss on AFS [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	202,795	245,168
Net	202,795	245,168	266,474
Difference in acquisition costs of treasury shares [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	70,547	62,099
Net	70,547	62,099	62,116
Other [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	473,025	452,425
Liabilities	(97,017)	(48,677)
Net	376,008	403,748	296,207
Temporary differences [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	1,926,364	1,729,898
Liabilities	(2,576,934)	(2,267,408)
Net	(650,570)	(537,510)	(713,379)
Unrealized fair value of available-for-sale investments [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	110,865	50,245
Liabilities	(160,101)	(100,752)
Net	(49,236)	(50,507)	50,043
Other deferred income taxes recognized directly to equity [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	92,981	65,532
Liabilities	(20,820)	(13,700)
Net	72,161	51,832	61,291
Deferred income taxes recognized directly to equity [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	203,846	115,777
Liabilities	(180,921)	(114,452)
Net	22,925	1,325	111,334
Tax credit carryforward and others [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	118,032	307,335
Net	118,032	307,335	277,261
Investments in subsidiaries, associates and joint ventures [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Assets	563,406	561,506
Liabilities	(494,980)	(475,376)
Net	₩ 68,426	₩ 86,130	₩ (18,089)

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Earnings Per Share - Basic And Diluted Earnings Per Share (Detail) - KRW (₩)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings per share [abstract]
Profit attribute to controlling interest	₩ 2,756,230,000,000	₩ 1,354,807,000,000	₩ 171,494,000,000
Interests of hybrid bonds	₩ (33,048,799,997)	₩ (33,225,163,081)	₩ (33,029,632,499)
Weighted-average number of common shares outstanding	79,998,600	79,996,389	79,993,834
Basic and diluted earnings per share	₩ 34,040	₩ 16,521	₩ 1,731
Total number of common shares issued	87,186,835	87,186,835	87,186,835
Weighted-average number of treasury shares	(7,188,235)	(7,190,446)	(7,193,001)
Weighted-average number of common shares outstanding	79,998,600	79,996,389	79,993,834

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Related Party Transactions - Significant Transactions Between the Controlling Company and Related Parties (Detail) - Posco [member] - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of transactions between related parties [line items]
Sales	₩ 12,751,894	₩ 11,239,938	₩ 11,746,815
Other sales	153,870	169,401	310,188
Purchase of material	3,913,323	2,882,146	2,659,136
Purchase of fixed assets	829,730	741,739	978,230
Outsourced processing cost	650,170	610,018	612,041
Other purchases	428,940	388,292	404,065
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Sales	3,328	29,511	4,441
Other sales	71	16,661	145
Purchase of material		8	19
Purchase of fixed assets	151,639	183,768	427,760
Outsourced processing cost	32		2,250
Other purchases	18,352	24,511	37,488
POSCO Processing & Service [member]
Disclosure of transactions between related parties [line items]
Sales	298,781	1,212,220	1,074,826
Other sales	1	5,778	24
Purchase of material	113,628	549,803	437,626
Purchase of fixed assets	4,595	2,896
Outsourced processing cost	8,309	22,704
Other purchases	404	2,445	2,281
POSCO COATED & COLOR STEEL Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	417,369	326,078	380,626
Other sales	3,533	2,560
Outsourced processing cost	8,483	12,232	9,359
Other purchases	106	126	104
POSCO ICT [member]
Disclosure of transactions between related parties [line items]
Sales	1,697	1,224	1,259
Other sales	5,097	727	7
Purchase of fixed assets	315,748	219,301	210,877
Outsourced processing cost	29,773	32,456	29,612
Other purchases	183,226	171,107	182,745
eNtoB Corporation [member]
Disclosure of transactions between related parties [line items]
Sales	1
Other sales	30	5
Purchase of material	330,921	278,016	261,989
Purchase of fixed assets	8,215	9,836	6,501
Outsourced processing cost	139	212	130
Other purchases	26,023	19,436	22,017
POSCO CHEMTECH [member]
Disclosure of transactions between related parties [line items]
Sales	359,862	319,164	436,594
Other sales	33,076	33,784	30,343
Purchase of material	479,896	502,448	519,956
Purchase of fixed assets	23,043	14,847	9,515
Outsourced processing cost	296,296	290,427	297,183
Other purchases	6,860	5,139	1,773
POSCO ENERGY CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Sales	179,966	187,311	188,458
Other sales	1,456	1,382	1,359
Other purchases	2	7	6
POSCO DAEWOO Corporation [member]
Disclosure of transactions between related parties [line items]
Sales	5,214,127	3,227,716	3,505,187
Other sales	35,182	34,341	34,334
Purchase of material	550,258	92,203	46,675
Purchase of fixed assets	221
Outsourced processing cost	44,108	343
Other purchases	1,948		480
POSCO Thainox Public Company Limited [member]
Disclosure of transactions between related parties [line items]
Sales	218,005	237,471	268,576
Other sales	9,780	2,915	10
Purchase of material	10,168	9,593	5,147
Outsourced processing cost		19
Other purchases		548	34
POSCO America Corporation [member]
Disclosure of transactions between related parties [line items]
Sales	345,225	469,543	624,549
Other sales			6
Purchase of material	90	284
Other purchases	1,776	1,103	725
POSCO Canada Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	439	275
Other sales	690
Purchase of material	278,915	148,528	111,243
POSCO Asia Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	1,949,354	1,758,080	1,822,932
Other sales	1,454	1,373	960
Purchase of material	365,025	403,174	269,086
Purchase of fixed assets	337	247
Outsourced processing cost	1,625	939	513
Other purchases	4,982	3,602	2,273
Qingdao Pohang Stainless Steel Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	161,803	135,405	118,845
Other purchases	176	525	220
POSCO JAPAN Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	1,436,159	1,112,489	1,051,910
Other sales	20	128	9,383
Purchase of material	26,256	23,217	25,957
Purchase of fixed assets	621	3,744	2,278
Outsourced processing cost		345	201
Other purchases	44,829	3,841	2,754
POSCO-VIETNAM Co., Ltd. [Member]
Disclosure of transactions between related parties [line items]
Sales	212,883	226,063
Other sales		445
Other purchases	7
POSCO MEXICO S.A. DE C.V. [member]
Disclosure of transactions between related parties [line items]
Sales	276,387	274,210	270,184
Other sales		462	80
Other purchases	1,749		11
POSCO Maharashtra Steel Private Limited [member]
Disclosure of transactions between related parties [line items]
Sales	467,206	355,829	421,244
Other sales		2,613	752
Other purchases	65	93	31
POSCO(Suzhou) Automotive Processing Center Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	192,467	149,911
Others [member]
Disclosure of transactions between related parties [line items]
Sales	932,048	766,263	867,334
Other sales	10,073	22,717	14,474
Purchase of material	262,828	207,601	223,393
Purchase of fixed assets	25,270	62,202	113,769
Outsourced processing cost	240,687	212,344	212,539
Other purchases	118,665	145,562	129,506
Subsidiaries [member]
Disclosure of transactions between related parties [line items]
Sales	12,667,107	11,160,350	11,680,733
Other sales	100,463	125,892	268,980
Purchase of material	2,417,985	2,214,877	2,180,042
Purchase of fixed assets	529,689	496,841	895,892
Outsourced processing cost	629,452	592,579	608,109
Other purchases	409,170	380,144	399,389
POSCO TMC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales		219,489	263,242
Purchase of material		2
Outsourced processing cost		863	1,497
Other purchases		1,177	1,560
POSCO AST [Member]
Disclosure of transactions between related parties [line items]
Sales		152,098	362,658
Other sales		1	15
Purchase of material			4,115
Outsourced processing cost		19,695	39,175
Other purchases		922	1,611
POSHIMETAL Co., Ltd. [Member]
Disclosure of transactions between related parties [line items]
Sales			10,777
Other sales			151
Purchase of material			145,165
Other purchases			46
SeAH Changwon Integrated Special Steel [member]
Disclosure of transactions between related parties [line items]
Sales			2,811
Other sales			176,904
Purchase of material			8,239
Outsourced processing cost			515
Other purchases			75
POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales			4,280
Other sales			33
Purchase of material			2,544
Purchase of fixed assets			125,192
Outsourced processing cost			15,135
Other purchases			13,649
PT. KRAKATAU POSCO [member]
Disclosure of transactions between related parties [line items]
Purchase of material			118,888
POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	2,947	2,245	147
Other sales	112	48	14
Purchase of material	5,487	3,533	1,017
Purchase of fixed assets	300,041	244,898	82,338
Outsourced processing cost	20,718	16,812	3,513
Other purchases	19,763	8,146	4,676
SNNC [member]
Disclosure of transactions between related parties [line items]
Sales	6,734	6,004	4,673
Other sales	712	1,042	594
Purchase of material	554,151	487,395	422,420
Other purchases	4	2
POSCO-SAMSUNG-Slovakia Processing Center [member]
Disclosure of transactions between related parties [line items]
Sales	52,779	44,686	26,379
Roy Hill Holdings Pty Ltd. [member]
Disclosure of transactions between related parties [line items]
Purchase of material	697,096
CSP - Compania Siderurgica do Pecem [Member]
Disclosure of transactions between related parties [line items]
Sales	7,384
Purchase of material	159,501
Other associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Sales	14,943	26,625	28,841
Other sales	52,583	13,122	40,600
Purchase of material	79,103	175,246	51,855
Other purchases	3
Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Sales	84,787	79,588	66,082
Other sales	53,407	43,509	41,208
Purchase of material	1,495,338	667,269	479,094
Purchase of fixed assets	300,041	244,898	82,338
Outsourced processing cost	20,718	17,439	3,932
Other purchases	₩ 19,770	8,148	4,676
SeAH Changwon Integrated Special Steel [member]
Disclosure of transactions between related parties [line items]
Sales		28	6,042
Purchase of material		1,095	3,802
Outsourced processing cost		627	₩ 419
KOBRASCO [member]
Disclosure of transactions between related parties [line items]
Other sales		₩ 29,297

XML

Related Party Transactions - Significant Transactions Between the Controlling Company and Related Parties (Parenthetical) (Detail) $ in Thousands, ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩)	Dec. 31, 2016 KRW (₩)	Dec. 31, 2015 KRW (₩)	Dec. 31, 2015 USD ($)
Disclosure of transactions between related parties [line items]
Loans to related parties during the year | ₩	₩ 1,055,895	₩ 603,332	₩ 295,689
Collected loans from related parties during the year | ₩	₩ 667,045	₩ 557,064	₩ 308,906
Posco [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of transactions between related parties [line items]
Loans to related parties during the year				$ 60,000
Posco [member] | LLP POSUK Titanium [Member]
Disclosure of transactions between related parties [line items]
Collected loans from related parties during the year				3,850
Posco [member] | POSCO-Uruguay S.A. [Member]
Disclosure of transactions between related parties [line items]
Borrowings from related parties during the year				$ 17,420

XML

Related Party Transactions - Related Account Balances of Significant Transactions Between the Controlling Company and Related Parties (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	₩ 155,922
Accounts payable	224,238
Other payables	84,112
Total payables	464,272
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Accounts payable	21,965
Other payables	674
Total payables	22,639
POSCO COATED & COLOR STEEL Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Accounts payable	5
Other payables	504
Total payables	509
POSCO ICT [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	1,458
Accounts payable	72,586
Other payables	27,009
Total payables	101,053
eNtoB Corporation [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	12,252
Accounts payable	31,899
Other payables	20
Total payables	44,171
POSCO CHEMTECH [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	51,774
Accounts payable	20,313
Other payables	17,568
Total payables	89,655
POSCO ENERGY CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Other payables	1,425
Total payables	1,425
POSCO DAEWOO Corporation [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	10,213
Accounts payable	2,145
Other payables	5,794
Total payables	18,152
POSCO Thainox Public Company Limited [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	1,204
Total payables	1,204
POSCO Asia Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	9,811
Accounts payable	24
Total payables	9,835
Others [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	15,038
Accounts payable	59,575
Other payables	31,118
Total payables	105,731
Subsidiaries [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	101,750
Accounts payable	208,512
Other payables	84,112
Total payables	394,374
POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	3,842
Accounts payable	15,723
Total payables	19,565
SNNC [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	49,506
Accounts payable	3
Total payables	49,509
Other associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	824
Total payables	824
Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	54,172
Accounts payable	15,726
Total payables	69,898
Posco [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	1,980,600	₩ 1,615,355
Other receivables	78,631	97,028
Total receivables	2,059,231	1,712,383
Trade accounts and notes payable		153,049
Accounts payable		249,958
Other payables		61,118
Total payables		464,125
Posco [member] | POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	2	3
Other receivables	2,908	3,359
Total receivables	2,910	3,362
Accounts payable		9,825
Other payables		515
Total payables		10,340
Posco [member] | POSCO COATED & COLOR STEEL Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	58,184	48,716
Other receivables	324	324
Total receivables	58,508	49,040
Accounts payable		5
Other payables		1,600
Total payables		1,605
Posco [member] | POSCO ICT [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	55
Other receivables	217	128
Total receivables	272	128
Trade accounts and notes payable		1,062
Accounts payable		89,382
Other payables		6,074
Total payables		96,518
Posco [member] | eNtoB Corporation [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable		9,948
Accounts payable		29,310
Other payables		15
Total payables		39,273
Posco [member] | POSCO CHEMTECH [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	61,810	27,253
Other receivables	3,589	3,868
Total receivables	65,399	31,121
Trade accounts and notes payable		54,702
Accounts payable		11,870
Other payables		19,282
Total payables		85,854
Posco [member] | POSCO ENERGY CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	33,239	18,701
Other receivables	1,673	2,012
Total receivables	34,912	20,713
Other payables		1,425
Total payables		1,425
Posco [member] | POSCO DAEWOO Corporation [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	483,915	182,700
Other receivables	12,739	11,184
Total receivables	496,654	193,884
Trade accounts and notes payable		460
Accounts payable		183
Other payables		49
Total payables		692
Posco [member] | POSCO Thainox Public Company Limited [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	57,826	62,034
Other receivables		8
Total receivables	57,826	62,042
Accounts payable		224
Total payables		224
Posco [member] | POSCO America Corporation [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	5,365	10,008
Total receivables	5,365	10,008
Posco [member] | POSCO Asia Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	404,857	375,823
Other receivables	541	458
Total receivables	405,398	376,281
Trade accounts and notes payable		25,101
Total payables		25,101
Posco [member] | Qingdao Pohang Stainless Steel Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	31,693	25,386
Total receivables	31,693	25,386
Accounts payable		5
Total payables		5
Posco [member] | POSCO MEXICO S.A. DE C.V. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	55,695	114,166
Other receivables	530	1,024
Total receivables	56,225	115,190
Posco [member] | POSCO Maharashtra Steel Private Limited [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	392,630	208,737
Other receivables	5,733	9,923
Total receivables	398,363	218,660
Posco [member] | Others [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	384,385	333,031
Other receivables	49,403	64,526
Total receivables	433,788	397,557
Trade accounts and notes payable		17,374
Accounts payable		46,455
Other payables		26,974
Total payables		90,803
Posco [member] | Subsidiaries [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	1,969,656	1,614,302
Other receivables	77,657	96,992
Total receivables	2,047,313	1,711,294
Trade accounts and notes payable		109,732
Accounts payable		192,626
Other payables		61,118
Total payables		363,476
Posco [member] | POSCO Processing & Service [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable		207,744
Other receivables		178
Total receivables		207,922
Trade accounts and notes payable		1,085
Accounts payable		5,367
Other payables		5,184
Total payables		11,636
Posco [member] | POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	1,946	30
Other receivables	9	9
Total receivables	1,955	39
Trade accounts and notes payable		2,125
Accounts payable		39,647
Total payables		41,772
Posco [member] | SNNC [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	648	223
Other receivables	61	26
Total receivables	709	249
Trade accounts and notes payable		40,201
Total payables		40,201
Posco [member] | Other associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	8,350	800
Other receivables	904	1
Total receivables	9,254	801
Trade accounts and notes payable		991
Accounts payable		17,685
Total payables		18,676
Posco [member] | Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	10,944	1,053
Other receivables	974	36
Total receivables	₩ 11,918	1,089
Trade accounts and notes payable		43,317
Accounts payable		57,332
Total payables		₩ 100,649

XML

Related Party Transactions - Significant Transactions Between the Company, Excluding the Controlling Company, and Related Companies (Detail) - Company, excluding the controlling company [member] - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	₩ 19,513	₩ 21,659	₩ 10,543
Other sales		5
Purchase of material	98	3,335	5,953
Other purchases	8,113	5,912	6,386
New Songdo International City Development, LLC [member]
Disclosure of transactions between related parties [line items]
Sales	223,567	226,042	420,094
Other sales	13,207
Other purchases	49	14	667
SNNC [member]
Disclosure of transactions between related parties [line items]
Sales	26,288	29,330	32,160
Other sales			44
Purchase of material	3,578	21,479	6,518
Other purchases	17,985	9,494	53,260
Chuncheon Energy Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	42,147	288,307
Noeul Green Energy [member]
Disclosure of transactions between related parties [line items]
Sales	11,863	107,268
Other purchases	2,178
VSC POSCO Steel Corporation [member]
Disclosure of transactions between related parties [line items]
Sales	19,404	43,650	37,416
Other sales		47
Purchase of material	188	479	2,395
Other purchases			3
USS-POSCO Industries [member]
Disclosure of transactions between related parties [line items]
Sales	26,899	287,072	353,626
Other sales	107
Purchase of material	2,222	1,195	1,109
CSP - Compania Siderurgica do Pecem [member]
Disclosure of transactions between related parties [line items]
Sales	241,299	157,814	845,979
Purchase of material	101,018
Other purchases	21,154
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of transactions between related parties [line items]
Sales	38,484	61,844	68,300
Other sales			111
Purchase of material	47,241	57,179	70,236
LLP POSUK Titanium [Member]
Disclosure of transactions between related parties [line items]
Purchase of material	3,972	14,575
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	4		3
Purchase of material	20,145	24,365	23,320
POS-SEAHSTEELWIRE(TIANJIN)CO., Ltd [member]
Disclosure of transactions between related parties [line items]
Sales	20,004	15,759	9,668
PT. batutua tembaga raya [member]
Disclosure of transactions between related parties [line items]
Purchase of material	21,024	13,079
POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales	34,088	31,711	30,310
Purchase of material	192	65	4
Zhangjiagang Pohang Refractories Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales		250	970
Other sales		14	1,248
Purchase of material	87	364	17,484
Other purchases	1,632	2,472	2,023
Sebang Steel [member]
Disclosure of transactions between related parties [line items]
Sales	441
Purchase of material	23,778	26,276	29,007
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN'L TRADING CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Sales	43,764	157,886	214,521
Purchase of material		3,535	3,960
Other purchases			3,190
DMSA/AMSA [member]
Disclosure of transactions between related parties [line items]
Sales			800
Other sales	99		9,322
Purchase of material	47,092	72,582	241,074
South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of transactions between related parties [line items]
Other sales	62,423	87,973	47,556
Other associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Sales	272,107	195,139	415,217
Other sales	43,126	11,184	17,793
Purchase of material	19,520	16,664	18,518
Other purchases	19,483	1,801	2,683
Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Sales	1,019,872	1,746,453	2,478,687
Other sales	118,962	99,223	76,074
Purchase of material	290,155	277,201	469,440
Other purchases	₩ 70,594	35,912	95,386
SeAH Changwon Integrated Special Steel [member]
Disclosure of transactions between related parties [line items]
Sales		16,294	32,802
Purchase of material		22,029	49,862
Other purchases			1,977
Posco e&c Songdo International Building [member]
Disclosure of transactions between related parties [line items]
Sales		4,245	6,278
Other purchases		16,219	₩ 25,197
Incheon-Gimpo Expressway Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Sales		₩ 102,183

XML

Related Party Transactions - Related Account Balances of Significant Transactions Between the Company, Excluding the Controlling Company, and Related Parties (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	₩ 155,922
Other payables	84,112
Total payables	464,272
POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	3,842
Total payables	19,565
Other associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	824
Total payables	824
Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes payable	54,172
Total payables	69,898
Company, excluding the controlling company [member] | POSCO PLANTEC Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	2,287	₩ 4,709
Other receivables	5	6
Total receivables	2,292	4,715
Trade accounts and notes payable	3,442	2,718
Other payables	5,595	8,521
Total payables	9,037	11,239
Company, excluding the controlling company [member] | New Songdo International City Development, LLC [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	484,038	255,822
Loan	282,775
Other receivables	1,696	5,725
Total receivables	768,509	261,547
Other payables	7,146
Total payables	7,146
Company, excluding the controlling company [member] | Chuncheon Energy Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable		12,142
Other receivables	21
Total receivables	21	12,142
Other payables	9,617	3,171
Total payables	9,617	3,171
Company, excluding the controlling company [member] | VSC POSCO Steel Corporation [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	16	5,265
Total receivables	16	5,265
Trade accounts and notes payable	17
Total payables	17
Company, excluding the controlling company [member] | USS-POSCO Industries [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable		583
Other receivables	4
Total receivables	4	583
Trade accounts and notes payable		75
Total payables		75
Company, excluding the controlling company [member] | Nickel mining company SAS [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable		133
Loan	59,668	60,425	₩ 17,580
Other receivables	118	116
Total receivables	59,786	60,674
Company, excluding the controlling company [member] | CSP - Compania Siderurgica do Pecem [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	380,180	224,760
Other receivables	13,443	149,700
Total receivables	393,623	374,460
Other payables	29,700	109,272
Total payables	29,700	109,272
Company, excluding the controlling company [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	2,108
Loan	5,357	6,647	10,782
Other receivables	6
Total receivables	7,471
Trade accounts and notes payable	2,449
Total payables	2,449
Company, excluding the controlling company [member] | PT. batutua tembaga raya [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	24
Loan	29,048	38,120	36,830
Total receivables	29,072	38,120
Trade accounts and notes payable		2,293
Total payables		2,293
Company, excluding the controlling company [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	8,067	9,292
Loan	5,357	8,460	11,720
Other receivables	32	43
Total receivables	13,456	17,795
Trade accounts and notes payable	107	40
Total payables	107	40
Company, excluding the controlling company [member] | SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN'L TRADING CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	715	100,367
Total receivables	715	100,367
Other payables	526
Total payables	526
Company, excluding the controlling company [member] | DMSA/AMSA [member]
Disclosure of transactions between related parties [line items]
Loan	69,713	90,638	99,854
Other receivables	4,443
Total receivables	74,156	90,638
Company, excluding the controlling company [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of transactions between related parties [line items]
Loan	229,880	276,605	283,954
Other receivables		48
Total receivables	229,880	276,653
Company, excluding the controlling company [member] | Other associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	134,397	184,402
Loan	134,506	142,812
Other receivables	6,885	6,593
Total receivables	275,788	333,807
Trade accounts and notes payable	1,856	4,615
Other payables	2,005	750
Total payables	3,861	5,365
Company, excluding the controlling company [member] | Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable	1,011,832	863,568
Loan	816,304	684,132	656,522
Other receivables	26,653	163,880
Total receivables	1,854,789	1,711,580
Trade accounts and notes payable	7,871	11,106
Other payables	54,589	122,589
Total payables	₩ 62,460	133,695
Company, excluding the controlling company [member] | AN KHANH NEW CITY DEVELOPMENT J.V. CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable		62,814
Loan		60,425	₩ 58,600
Other receivables		1,643
Total receivables		124,882
Other payables		875
Total payables		875
Company, excluding the controlling company [member] | Tinplate Industrial Company Limited [Member]
Disclosure of transactions between related parties [line items]
Trade accounts and notes receivable		3,279
Loan		6,647
Other receivables		6
Total receivables		9,932
Trade accounts and notes payable		1,365
Total payables		₩ 1,365

XML

Related Party Transactions - Related Account Balances of Significant Transactions Between the Company, Excluding the Controlling Company, and Related Parties (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	Dec. 31, 2017	Dec. 31, 2016
Company, excluding the controlling company [member]
Disclosure of transactions between related parties [line items]
Bad-debt allowance for receivables	₩ 4,217	₩ 48,891

XML

Related Party Transactions - Significant Financial Transactions Between the Company, Excluding the Controlling Company, and Related Parties (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of transactions between related parties [line items]
Lend	₩ (1,055,895)	₩ (603,332)	₩ (295,689)
Collect	(667,045)	(557,064)	(308,906)
Company, excluding the controlling company [member] | METAPOLIS Co.,Ltd [member]
Disclosure of transactions between related parties [line items]
Beginning	13,270	26,000
Collect		(12,730)
Others	(13,270)
Ending		13,270	26,000
Company, excluding the controlling company [member] | New Songdo International City Development, LLC [member]
Disclosure of transactions between related parties [line items]
Lend	484,644
Collect	(201,869)
Ending	282,775
Company, excluding the controlling company [member] | DMSA/AMSA [member]
Disclosure of transactions between related parties [line items]
Beginning	90,638	99,854
Lend	2,956	11,774
Others	(23,881)	(20,990)
Ending	69,713	90,638	99,854
Company, excluding the controlling company [member] | South-East Asia Gas Pipeline Company Ltd. [member]
Disclosure of transactions between related parties [line items]
Beginning	276,605	283,954
Lend	28,967	27,087
Collect	(46,252)	(43,080)
Others	(29,440)	8,644
Ending	229,880	276,605	283,954
Company, excluding the controlling company [member] | PT. batutua tembaga raya [member]
Disclosure of transactions between related parties [line items]
Beginning	38,120	36,830
Others	(9,072)	1,290
Ending	29,048	38,120	36,830
Company, excluding the controlling company [member] | PT. Tanggamus Electric Power [member]
Disclosure of transactions between related parties [line items]
Beginning	3,606	2,359
Lend		1,174
Others	(409)	73
Ending	3,197	3,606	2,359
Company, excluding the controlling company [member] | PT. wampu electric power [member]
Disclosure of transactions between related parties [line items]
Beginning	5,761	4,454
Lend		1,169
Others	(654)	138
Ending	5,107	5,761	4,454
Company, excluding the controlling company [member] | PT. POSMI Steel Indonesia [member]
Disclosure of transactions between related parties [line items]
Beginning	4,834	4,688
Others	(548)	146
Ending	4,286	4,834	4,688
Company, excluding the controlling company [member] | Nickel mining company SAS [member]
Disclosure of transactions between related parties [line items]
Beginning	60,425	17,580
Lend		40,594
Others	(757)	2,251
Ending	59,668	60,425	17,580
Company, excluding the controlling company [member] | AN KHANH NEW CITY DEVELOPMENT J.V. CO., LTD. [member]
Disclosure of transactions between related parties [line items]
Beginning	60,425	58,600
Others	(60,425)	1,825
Ending		60,425	58,600
Company, excluding the controlling company [member] | Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd [member]
Disclosure of transactions between related parties [line items]
Beginning	6,647	10,782
Collect	(577)	(4,471)
Others	(713)	336
Ending	5,357	6,647	10,782
Company, excluding the controlling company [member] | KRAKATAU POS-CHEM DONG-SUH CHEMICAL [member]
Disclosure of transactions between related parties [line items]
Beginning	7,251
Lend		6,959
Others	(823)	292
Ending	6,428	7,251
Company, excluding the controlling company [member] | Hamparan Mulya [member]
Disclosure of transactions between related parties [line items]
Beginning	3,626	3,516
Collect	(3,626)
Others		110
Ending		3,626	3,516
Company, excluding the controlling company [member] | POS-SEAHSTEELWIRE(TIANJIN)CO., Ltd [member]
Disclosure of transactions between related parties [line items]
Beginning	5,438	5,274
Collect	(5,438)
Others		164
Ending		5,438	5,274
Company, excluding the controlling company [member] | POSCO SeAH Steel Wire(Nantong) Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Beginning	8,460	11,720
Collect	(2,262)	(3,480)
Others	(841)	220
Ending	5,357	8,460	11,720
Company, excluding the controlling company [member] | POS-SeAH Steel Wire (Thailand) Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Beginning	7,251
Lend		6,959
Collect	(1,142)
Others	319	292
Ending	6,428	7,251
Company, excluding the controlling company [member] | AMCI (WA) PTY LTD [member]
Disclosure of transactions between related parties [line items]
Beginning	91,775	85,168
Lend	4,327	4,665
Others	(4,041)	1,942
Ending	92,061	91,775	85,168
Company, excluding the controlling company [member] | POSCO(Yantai)Automotive Processing Center Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Others	5,357
Ending	5,357
Company, excluding the controlling company [member] | POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD [member]
Disclosure of transactions between related parties [line items]
Others	8,571
Ending	8,571
Company, excluding the controlling company [member] | SAMHWAN VINA CO., LTD [member]
Disclosure of transactions between related parties [line items]
Others	1,071
Ending	1,071
Company, excluding the controlling company [member] | Associates and joint ventures [member]
Disclosure of transactions between related parties [line items]
Beginning	684,132	656,522
Lend	522,894	404,929
Collect	(261,166)	(75,127)
Others	(129,556)	(302,192)
Ending	816,304	684,132	656,522
Company, excluding the controlling company [member] | Posco e&c Songdo International Building [member]
Disclosure of transactions between related parties [line items]
Lend		298,865
Others		(298,865)
Company, excluding the controlling company [member] | POSK(Pinghu) Steel Processing Center Co., Ltd. [member]
Disclosure of transactions between related parties [line items]
Beginning		5,743
Lend		5,683
Collect		(11,366)
Others		₩ (60)
Ending			₩ 5,743
Company, excluding the controlling company [member] | Gale International Korea, LLC [Member]
Disclosure of transactions between related parties [line items]
Lend	2,000
Ending	₩ 2,000

XML

Related Party Transactions - Significant Financial Transactions Between the Company, Excluding the Controlling Company, and Related Parties (Parenthetical) (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Company, excluding the controlling company [member] | DMSA/AMSA [member]
Disclosure of transactions between related parties [line items]
Loans converted to shares of DMSA/AMSA	₩ 13,712	₩ 24,624

XML

Related Party Transactions - Details of Compensation to Key Management Officers (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Related party transactions [abstract]
Short-term benefits	₩ 112,688	₩ 90,916	₩ 111,278
Long-term benefits	8,632	17,905	19,513
Retirement benefits	20,422	17,870	21,850
Compensation to key management	₩ 141,742	₩ 126,691	₩ 152,641

XML

Commitments and Contingencies - Contingent Liabilities on Outstanding Guarantees (Detail) - Dec. 31, 2017 - Contingent liabilities on outstanding guarantees [member] ₩ in Millions	KRW (₩)	BRL (R$)	EUR (€)	AUD ($)	IDR (Rp)	INR (₨)	THB (฿)	CNY (¥)	USD ($)
USD [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	₩ 4,108,186								$ 3,834,409,355
KRW [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	2,358,270
CNY [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	112,011							¥ 684,450,000
India, Rupees
Disclosure of contingent liabilities [line items]
Guarantee amount	34,063					₨ 2,037,278,075
Indonesia, Rupiahs
Disclosure of contingent liabilities [line items]
Guarantee amount	6,241				Rp 79,000,000,000
THB [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	180,268						฿ 5,501,000,000
EUR [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	47,332		€ 37,000,000
AUD [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	21,097			$ 25,260,721
BRL [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	150,100	R$ 464,060,000
Top of range [member] | USD [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	5,018,081								4,683,667,474
Top of range [member] | KRW [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	2,985,528
Top of range [member] | CNY [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	124,456							760,500,000
Top of range [member] | India, Rupees
Disclosure of contingent liabilities [line items]
Guarantee amount	122,892					7,350,000,000
Top of range [member] | Indonesia, Rupiahs
Disclosure of contingent liabilities [line items]
Guarantee amount	6,241				79,000,000,000
Top of range [member] | THB [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	180,268						5,501,000,000
Top of range [member] | EUR [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	58,846		46,000,000
Top of range [member] | AUD [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	21,097			25,260,721
Top of range [member] | BRL [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	150,100	464,060,000
Posco [member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	53,570								50,000,000
Posco [member] | POSCO ASSAN TST STEEL INDUSTRY [member] | SMBC and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	141,291								131,874,750
Posco [member] | POSCO COATED STEEL (THAILAND) CO., LTD. [Member] | The Great&CO Co., Ltd(SPC) [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	180,268						5,501,000,000
Posco [member] | POSCO Maharashtra Steel Private Limited [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	347,045								323,918,500
Posco [member] | POSCO MEXICO S.A. DE C.V. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	171,424								160,000,000
Posco [member] | POSCO SS-VINA Co., Ltd [Member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	337,062								314,599,225
Posco [member] | POSCO VST Co., Ltd. [member] | ANZ and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	8,706								8,125,000
Posco [member] | POSCO-VIETNAM Co., Ltd. [Member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	209,994								196,000,000
Posco [member] | PT. KRAKATAU POSCO [member] | Korean Development Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,272,174								1,187,394,785
Posco [member] | Zhangjiagang Pohang Stainless Steel Co., Ltd. [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	112,011							684,450,000
Posco [member] | CSP - Compania Siderurgica do Pecem [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	449,990								420,000,000
Posco [member] | CSP - Compania Siderurgica do Pecem [member] | BNDES [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	150,100	464,060,000
Posco [member] | LLP POSUK Titanium [Member] | SMBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	16,071								15,000,000
Posco [member] | Nickel mining company SAS [member] | SMBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	47,332
Posco [member] | Top of range [member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	53,570								50,000,000
Posco [member] | Top of range [member] | POSCO ASSAN TST STEEL INDUSTRY [member] | SMBC and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	156,990								146,527,500
Posco [member] | Top of range [member] | POSCO COATED STEEL (THAILAND) CO., LTD. [Member] | The Great&CO Co., Ltd(SPC) [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	180,268						฿ 5,501,000,000
Posco [member] | Top of range [member] | POSCO Maharashtra Steel Private Limited [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	696,252								649,853,000
Posco [member] | Top of range [member] | POSCO MEXICO S.A. DE C.V. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	171,424								160,000,000
Posco [member] | Top of range [member] | POSCO SS-VINA Co., Ltd [Member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	379,652								354,351,050
Posco [member] | Top of range [member] | POSCO VST Co., Ltd. [member] | ANZ and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	69,641								65,000,000
Posco [member] | Top of range [member] | POSCO-VIETNAM Co., Ltd. [Member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	209,994								196,000,000
Posco [member] | Top of range [member] | PT. KRAKATAU POSCO [member] | Korean Development Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,446,711								1,350,300,000
Posco [member] | Top of range [member] | Zhangjiagang Pohang Stainless Steel Co., Ltd. [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	124,456							¥ 760,500,000
Posco [member] | Top of range [member] | CSP - Compania Siderurgica do Pecem [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	449,990								420,000,000
Posco [member] | Top of range [member] | CSP - Compania Siderurgica do Pecem [member] | BNDES [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	150,100	R$ 464,060,000
Posco [member] | Top of range [member] | LLP POSUK Titanium [Member] | SMBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	16,071								15,000,000
Posco [member] | Top of range [member] | Nickel mining company SAS [member] | SMBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	58,846		46,000,000
POSCO DAEWOO Corporation [member] | POSCO ASSAN TST STEEL INDUSTRY [member] | ING and others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	15,699								14,652,750
POSCO DAEWOO Corporation [member] | Daewoo Global Development. Pte., Ltd [member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	23,178								21,633,300
POSCO DAEWOO Corporation [member] | Daewoo Global Development. Pte., Ltd [member] | MIRAE ASSET DAEWOO CO.,LTD. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	10,703
POSCO DAEWOO Corporation [member] | DAEWOO POWER PNG Ltd. [Member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	58,284								54,400,000
POSCO DAEWOO Corporation [member] | Daewoo Textile LLC [Member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	4,286								4,000,000
POSCO DAEWOO Corporation [member] | POSCO DAEWOO INDIA PVT., LTD. [Member] | Shinhan Bank and others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	54,896								51,237,684
POSCO DAEWOO Corporation [member] | POSCO DAEWOO INDIA PVT., LTD. [Member] | SC bank and other [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	34,063					2,037,278,075
POSCO DAEWOO Corporation [member] | PT. Bio Inti Agrindo [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	129,505								120,875,000
POSCO DAEWOO Corporation [member] | Songdo Posco Family housing [member] | SAMSUNG SECURITIES CO.,LTD and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	49,500
POSCO DAEWOO Corporation [member] | GLOBAL KOMSCO Daewoo LLC [Member] | Industrial & Commercial Bank of China [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	8,812		€ 37,000,000						8,225,000
POSCO DAEWOO Corporation [member] | Ambatovy Project Investments Limited and others [member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	30,348								28,325,258
POSCO DAEWOO Corporation [member] | Top of range [member] | POSCO ASSAN TST STEEL INDUSTRY [member] | ING and others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	15,699								14,652,750
POSCO DAEWOO Corporation [member] | Top of range [member] | Daewoo Global Development. Pte., Ltd [member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	23,178								21,633,300
POSCO DAEWOO Corporation [member] | Top of range [member] | Daewoo Global Development. Pte., Ltd [member] | MIRAE ASSET DAEWOO CO.,LTD. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	29,137
POSCO DAEWOO Corporation [member] | Top of range [member] | DAEWOO POWER PNG Ltd. [Member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	58,284								54,400,000
POSCO DAEWOO Corporation [member] | Top of range [member] | Daewoo Textile LLC [Member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	4,286								4,000,000
POSCO DAEWOO Corporation [member] | Top of range [member] | POSCO DAEWOO INDIA PVT., LTD. [Member] | Shinhan Bank and others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	173,995								162,400,000
POSCO DAEWOO Corporation [member] | Top of range [member] | POSCO DAEWOO INDIA PVT., LTD. [Member] | SC bank and other [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	122,892					7,350,000,000
POSCO DAEWOO Corporation [member] | Top of range [member] | PT. Bio Inti Agrindo [member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	129,505								120,875,000
POSCO DAEWOO Corporation [member] | Top of range [member] | Songdo Posco Family housing [member] | SAMSUNG SECURITIES CO.,LTD and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	70,000					₨ 70,000
POSCO DAEWOO Corporation [member] | Top of range [member] | GLOBAL KOMSCO Daewoo LLC [Member] | Industrial & Commercial Bank of China [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	8,812								8,225,000
POSCO DAEWOO Corporation [member] | Top of range [member] | Ambatovy Project Investments Limited and others [member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	93,504								87,272,727
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Daewoo Global Development. Pte., Ltd [member] | POSCO Asia Co., Ltd. And others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	63,307								59,088,100
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Songdo Posco Family housing [member] | SAMSUNG SECURITIES CO.,LTD and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	49,500
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | POSCO E&C Vietnam Co., Ltd. [member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	32,142								30,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd [Member] | Woori Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	147,853								138,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA. [member] | HSBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	107,140								100,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | POSCO ENGINEERING (THAILAND) CO., LTD. [member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	42,268								39,451,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | POSCO Engineering and Construction India Private Limited [member] | Woori Bank [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	2,250								2,100,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | PT PEN INDONESIA [Member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	5,357								5,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | PT. POSCO E&C INDONESIA [member] | BNP Indonesia [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	6,241				79,000,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | New Songdo International City Development, LLC [member] | Others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	317,900
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | UITrans LRT Co., Ltd. [member] | Kookmin Bank and Other [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	20,740
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Chuncheon Energy Co., Ltd. [member] | Kookmin Bank and Other [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	10,993
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Ecocity Company Limited and Others [Member] | Others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	446,098
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | AN KHANH NEW CITY DEVELOPMENT J.V. CO., LTD. [member] | POSCO Asia Co., Ltd. And others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	160,710								150,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | Daewoo Global Development. Pte., Ltd [member] | POSCO Asia Co., Ltd. And others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	73,626								68,719,200
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | Songdo Posco Family housing [member] | SAMSUNG SECURITIES CO.,LTD and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	70,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | POSCO E&C Vietnam Co., Ltd. [member] | Export-Import Bank of Korea [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	32,142								30,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd [Member] | Woori Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	147,853								138,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA. [member] | HSBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	107,140								100,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | POSCO ENGINEERING (THAILAND) CO., LTD. [member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	42,268								39,451,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | POSCO Engineering and Construction India Private Limited [member] | Woori Bank [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	2,250								2,100,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | PT PEN INDONESIA [Member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	5,357								5,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | PT. POSCO E&C INDONESIA [member] | BNP Indonesia [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	6,241				Rp 79,000,000,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | New Songdo International City Development, LLC [member] | Others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	340,000
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | UITrans LRT Co., Ltd. [member] | Kookmin Bank and Other [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	20,740
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | Chuncheon Energy Co., Ltd. [member] | Kookmin Bank and Other [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	11,600
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | Ecocity Company Limited and Others [Member] | Others [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	960,011
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member] | AN KHANH NEW CITY DEVELOPMENT J.V. CO., LTD. [member] | POSCO Asia Co., Ltd. And others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	160,710								150,000,000
POSCO ICT [member] | PT.POSCO ICT INDONESIA [Member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,607								1,500,000
POSCO ICT [member] | Incheon-Gimpo Expressway Co., Ltd. [member] | Korean Development Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	100,000
POSCO ICT [member] | UITrans LRT Co., Ltd. [member] | Kookmin Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	76,000
POSCO ICT [member] | SMS Energy and others [member] | Hana Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	73,676
POSCO ICT [member] | Hyochun CO., LTD [member] | Daegu Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	39,575
POSCO ICT [member] | BLT Enterprise and others [Member] | Kyobo Life Insurance Co., Ltd and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,163,585
POSCO ICT [member] | Top of range [member] | PT.POSCO ICT INDONESIA [Member] | POSCO Asia Co., Ltd. [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,607								1,500,000
POSCO ICT [member] | Top of range [member] | Incheon-Gimpo Expressway Co., Ltd. [member] | Korean Development Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	100,000
POSCO ICT [member] | Top of range [member] | UITrans LRT Co., Ltd. [member] | Kookmin Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	76,000
POSCO ICT [member] | Top of range [member] | SMS Energy and others [member] | Hana Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	104,880
POSCO ICT [member] | Top of range [member] | Hyochun CO., LTD [member] | Daegu Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	39,575
POSCO ICT [member] | Top of range [member] | BLT Enterprise and others [Member] | Kyobo Life Insurance Co., Ltd and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,163,585
POSCO M-TECH [Member] | PT.Krakatau Posco Chemtech Calcination [Member] | Hana Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	22,184								20,705,882
POSCO M-TECH [Member] | KRAKATAU POS-CHEM DONG-SUH CHEMICAL [member] | Hana Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,221								1,140,000
POSCO M-TECH [Member] | POS INFRA AUTO [member] | Korean Development Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	836								780,000
POSCO M-TECH [Member] | Top of range [member] | PT.Krakatau Posco Chemtech Calcination [Member] | Hana Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	35,999								33,600,000
POSCO M-TECH [Member] | Top of range [member] | KRAKATAU POS-CHEM DONG-SUH CHEMICAL [member] | Hana Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	1,221								1,140,000
POSCO M-TECH [Member] | Top of range [member] | POS INFRA AUTO [member] | Korean Development Bank [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	836								780,000
POSCO COATED & COLOR STEEL Co., Ltd. [member] | Myanmar POSCO C&C Company, Limited [Member] | POSCO Asia Co., Ltd. And others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	14,985								13,986,947
POSCO COATED & COLOR STEEL Co., Ltd. [member] | Top of range [member] | Myanmar POSCO C&C Company, Limited [Member] | POSCO Asia Co., Ltd. And others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	14,985								13,986,947
POSCO ENERGY CO., LTD. [member] | POSCO ASSAN TST STEEL INDUSTRY [member] | SMBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	26,785								25,000,000
POSCO ENERGY CO., LTD. [member] | PT. Krakatau Posco Energy [Member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	147,206								137,396,174
POSCO ENERGY CO., LTD. [member] | Top of range [member] | POSCO ASSAN TST STEEL INDUSTRY [member] | SMBC [Member]
Disclosure of contingent liabilities [line items]
Guarantee amount	26,785								25,000,000
POSCO ENERGY CO., LTD. [member] | Top of range [member] | PT. Krakatau Posco Energy [Member] | Export-Import Bank of Korea and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	207,744								$ 193,900,000
POSCO AUSTRALIA PTY LTD [member] | Department of Trade and Investment (NSW Government) [member] | Woori Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	21,097			25,260,721
POSCO AUSTRALIA PTY LTD [member] | Top of range [member] | Department of Trade and Investment (NSW Government) [member] | Woori Bank and others [member]
Disclosure of contingent liabilities [line items]
Guarantee amount	₩ 21,097			$ 25,260,721

XML

Commitments and Contingencies - Additional Information (Detail) T in Thousands, ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩) T	Dec. 31, 2017 USD ($) T	Dec. 31, 2017 USD ($)	Dec. 31, 2016 KRW (₩)
Disclosure of contingent liabilities [line items]
Borrowings	₩ 21,063,657			₩ 22,704,998
Posco [member]
Disclosure of contingent liabilities [line items]
Remaining iron ore to be purchased | T	116,000	116,000
Remaining coal to be purchased | T	18,000	18,000
Liquefied natural gas to be purchased | T	550	550
Liquefied natural gas terms	20 years	20 years
Posco [member] | Korea National Oil Corporation [member]
Disclosure of contingent liabilities [line items]
Borrowings | $			$ 1,020,000
Posco [member] | Top of range [member] | Korea National Oil Corporation [member]
Disclosure of contingent liabilities [line items]
Borrowings | $			$ 6,490,000
Posco [member] | Bottom of range [member]
Disclosure of contingent liabilities [line items]
Iron ore and coal contracts terms	3 years	3 years
Nickel contracts terms	1 year	1 year
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member]
Disclosure of contingent liabilities [line items]
Completions guarantees provided	₩ 395,792
Construction guarantees received	269,455
POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Top of range [member]
Disclosure of contingent liabilities [line items]
Foreign currency guarantee | $		$ 2,311,000,000
POSCO ICT [member] | Korea Software Financial Cooperative [member]
Disclosure of contingent liabilities [line items]
Contingent liabilities guarantee amount	143,582
POSCO ICT [member] | Seoul Guarantee Insurance [member]
Disclosure of contingent liabilities [line items]
Contingent liabilities guarantee amount	22,432
Woori Bank and others [member]
Disclosure of contingent liabilities [line items]
Foreign currency guarantee | $		$ 1,306,000,000
Busan E&E Co. [member]
Disclosure of contingent liabilities [line items]
Supplementary fund	₩ 9,800

XML

Commitments and Contingencies - Litigations in Progress (Detail) - 12 months ended Dec. 31, 2017 ₺ in Thousands, € in Thousands, ₨ in Thousands, ₨ in Thousands, ฿ in Thousands, ¥ in Thousands, Rp in Thousands, R$ in Thousands, $ in Thousands, $ in Thousands, ₩ in Millions	KRW (₩) LegalMatter	BRL (R$)	EUR (€)	IDR (Rp)	INR (₨)	THB (฿)	CNY (¥)	USD ($)	CAD ($)	PKR (₨)	TRY (₺)
Lawsuits provision [member]
Disclosure of contingent liabilities [line items]
Estimated lawsuits	163
Provision for legal contingencies and claims | ₩	₩ 27,963
Litigations in progress [Member] | Posco [member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	15
Claim amount | ₩	₩ 23,037
Description	Lawsuit on claim for employee right and others(*1)
Litigations in progress [Member] | Posco [member] | US [Member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount	₩ 1,696							$ 1,583
Description	Arbitration on trading and others
Litigations in progress [Member] | POSCO DAEWOO Corporation [member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	10
Claim amount	₩ 9,903		€ 9,903
Description	Lawsuit on claim for payment and others
Litigations in progress [Member] | POSCO DAEWOO Corporation [member] | US [Member]
Disclosure of contingent liabilities [line items]
Legal actions	3
Claim amount	₩ 23,815							22,228
Description	Lawsuit on claim for damages and others(*1)
Litigations in progress [Member] | POSCO DAEWOO Corporation [member] | European Union [Member]
Disclosure of contingent liabilities [line items]
Legal actions	2
Claim amount	₩ 3,514		€ 2,747
Description	Lawsuit on claim for damages and others
Litigations in progress [Member] | POSCO DAEWOO Corporation [member] | India [Member]
Disclosure of contingent liabilities [line items]
Legal actions	3
Claim amount	₩ 75,553				₨ 4,518,694
Description	Lawsuit on claim for payment on guarantees and others(*1)
Litigations in progress [Member] | POSCO DAEWOO Corporation [member] | Pakistan [Member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount	₩ 1,208									₨ 124,775
Description	Lawsuit on claim for damages
Litigations in progress [Member] | POSCO DAEWOO Corporation [member] | Canada [Member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount	₩ 67,363								$ 79,000
Description	Lawsuit on claim for damages
Litigations in progress [Member] | POSCO ENGINEERING & CONSTRUCTION CO., LTD. [member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	104
Claim amount | ₩	₩ 461,134
Description	Arbitration on construction costs allocation and others
Litigations in progress [Member] | POSCO ICT [member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	13
Claim amount | ₩	₩ 9,894
Description	Lawsuit on claim for payment and others
Litigations in progress [Member] | POSCO A&C [Member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	3
Claim amount | ₩	₩ 3,985
Description	Lawsuit on claim for payment on construction
Litigations in progress [Member] | POSCO ENERGY CO., LTD. [member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	4
Claim amount | ₩	₩ 7,017
Description	Lawsuit on claim for damages and revocation of electricity supply contract and others
Litigations in progress [Member] | POSCO E&C CHINA Co., Ltd. [Member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount | ₩	₩ 3,305
Description	Lawsuit on claim for payment on construction
Litigations in progress [Member] | POSCO E&C CHINA Co., Ltd. [Member] | China [member]
Disclosure of contingent liabilities [line items]
Legal actions	11
Claim amount	₩ 2,239						¥ 13,679
Description	Lawsuit on claim for payment of reserve for construction warranty and others
Litigations in progress [Member] | Posco e&c Songdo International Building [member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	3
Claim amount | ₩	₩ 892
Description	Lawsuit on affirmation of the non-existence of general meeting of stockholders and others
Litigations in progress [Member] | Pospower Co Ltd [Member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount | ₩	₩ 1,000
Description	Lawsuit on claim for damages
Litigations in progress [Member] | POSCO ENGINEERING (THAILAND) CO., LTD. [member] | Thailand [Member]
Disclosure of contingent liabilities [line items]
Legal actions	7
Claim amount	₩ 23,739					฿ 724,400
Description	Lawsuit on claim for payment on construction
Litigations in progress [Member] | POSCO TNPC Otomotiv Celik San. Ve Tic. A.S [Member] | Turkey [Member]
Disclosure of contingent liabilities [line items]
Legal actions	6
Claim amount	₩ 9										₺ 31
Description	Lawsuit on claim for unfair dismissal and others
Litigations in progress [Member] | PT. KRAKATAU POSCO [member] | Indonesia [Member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount	₩ 25,664			Rp 324,858,033
Description	Lawsuit on claim for payment on construction
Litigations in progress [Member] | POSCO(Dalian) IT Center Development Co., Ltd. [Member] | China [member]
Disclosure of contingent liabilities [line items]
Legal actions	2
Claim amount	₩ 69						¥ 423
Description	Lawsuit over contract dispute dealing apartment
Litigations in progress [Member] | Brazil Sao Paulo Steel Processing Center [Member] | Brazil [Member]
Disclosure of contingent liabilities [line items]
Legal actions	3
Claim amount	₩ 3,935	R$ 12,167
Description	Lawsuit on claim for payment on construction and others
Litigations in progress [Member] | POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA. [member] | Brazil [Member]
Disclosure of contingent liabilities [line items]
Legal actions	184
Claim amount	₩ 39,156	R$ 121,058
Description	Lawsuit on claim for damages and others(*1)
Litigations in progress [Member] | HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd [Member] | Korea [member]
Disclosure of contingent liabilities [line items]
Legal actions	1
Claim amount | ₩	₩ 3,305
Description	Lawsuit on claim for payment on construction
Litigations in progress [Member] | POSCO India Chennai Steel Processing Center Pvt.Ltd. [member] | US [Member]
Disclosure of contingent liabilities [line items]
Legal actions	6
Claim amount	₩ 9,009							$ 8,409
Description	Lawsuit on custom duty and others

XML

Additional Information of Cash Flow Statements - Changes in Operating Assets and Liabilities (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from (used in) operating activities [abstract]
Trade accounts and notes receivable	₩ 63,075	₩ 273,419	₩ 1,586,113
Other receivables	113,740	191,591	259,741
Inventories	(1,435,170)	(889,998)	2,456,068
Other current assets	110,688	(287,377)	42,131
Other non-currentassets	12,455	33,584	72,826
Trade accounts and notes payable	(607,999)	769,337	(894,129)
Other payables	(26,922)	(179,174)	39,811
Other current liabilities	338,273	2,490	(457,947)
Provisions	(145,763)	(124,884)	(119,172)
Payments of severance benefits	(185,220)	(278,278)	(157,983)
Plan assets	3,815	(138,854)	(115,274)
Other non-currentliabilities	(82,605)	223,574	72,267
Changes in operating cash flows	₩ (1,841,633)	₩ (404,570)	₩ 2,784,452

XML

Additional Information of Cash Flow Statements - Changes in Liabilities Arising from Financial Activities (Detail) ₩ in Millions	12 Months Ended
	Dec. 31, 2017 KRW (₩)
Short-term borrowings [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Beginning	₩ 7,979,727
Changes from financing cash flows	558,083
Changes arising from obtaining or losing control of subsidiaries or other business	(12,469)
The effect of changes in foreign exchange rates	(350,523)
Other changes:	0
Ending	8,174,818
Long-term borrowings [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Beginning	14,725,271
Changes from financing cash flows	(1,410,033)
Changes arising from obtaining or losing control of subsidiaries or other business	3,299
The effect of changes in foreign exchange rates	(435,170)
Other changes:	0
Amortization of discount on debentures issued	5,472
Ending	12,888,839
Dividend payable [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Beginning	7,770
Changes from financing cash flows	(931,232)
Other changes:	0
Decrease in retained earnings	863,579
Decrease in non-controlling interests	67,096
Ending	7,213
Finance lease liabilities [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Beginning	114,409
Changes from financing cash flows	(10,536)
The effect of changes in foreign exchange rates	(10,855)
Other changes:	0
Ending	93,018
Derivatives that hedge long-term borrowings [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Beginning	(52,373)
Changes in fair values	171,693
Other changes:	0
Ending	₩ 119,320

XML

Operating Segments - Information about Reportable Segments (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of operating segments [line items]
Revenues	₩ 60,186,867	₩ 52,939,771	₩ 58,522,268
Interest income	212,451	182,475	210,193
Interest expenses	(653,115)	(658,726)	(788,772)
Depreciation and amortization	(3,297,420)	(3,213,847)	(3,218,246)
Impairment loss on property, plant and equipment and others	(302,967)	(368,939)	(454,667)
Impairment loss on available-for-sale financial assets	(123,214)	(248,404)	(142,781)
Share of profit or loss of investment in associates and JVs	10,540	(88,677)	(506,054)
Income tax expense	(1,185,740)	(379,544)	(266,560)
Profit (loss)	2,909,311	1,032,065	(116,215)
Assets	79,785,629	80,137,614
Investment in associates	1,520,441	1,595,441
Liabilities	32,458,904	34,372,345
Reportable segments [member]
Disclosure of operating segments [line items]
Revenues	95,059,704	81,885,203	87,471,744
Interest income	280,488	245,454	238,758
Interest expenses	(757,963)	(759,001)	(870,276)
Depreciation and amortization	(3,360,366)	(3,276,416)	(3,282,916)
Impairment loss on property, plant and equipment and others	(336,719)	(243,282)	(312,433)
Impairment loss on available-for-sale financial assets	(127,319)	(314,446)	(240,790)
Share of profit or loss of investment in associates and JVs	(1,721)	(554,872)	(822,509)
Income tax expense	(1,274,696)	(463,009)	(444,105)
Profit (loss)	3,160,761	135,026	(120,883)
Assets	101,542,757	101,525,764	103,223,655
Investment in associates	19,113,739	19,206,073	20,817,693
Acquisition of non-currentassets	2,670,224	2,801,687	3,029,261
Liabilities	39,809,138	41,917,003	42,221,498
Reportable segments [member] | External customers [member]
Disclosure of operating segments [line items]
Revenues	60,655,100	53,083,513	58,192,345
Reportable segments [member] | Internal customers [Member]
Disclosure of operating segments [line items]
Revenues	34,404,604	28,801,690	29,279,399
Reportable segments [member] | Intersegment [Member]
Disclosure of operating segments [line items]
Revenues	22,823,501	17,132,284	17,288,964
Reportable segments [member] | Steel [member]
Disclosure of operating segments [line items]
Revenues	47,611,378	42,906,170	44,836,775
Interest income	128,827	126,210	139,821
Interest expenses	(422,357)	(459,345)	(560,767)
Depreciation and amortization	(2,856,133)	(2,788,535)	(2,782,680)
Impairment loss on property, plant and equipment and others	(149,840)	(99,165)	(243,828)
Impairment loss on available-for-sale financial assets	(95,261)	(225,225)	(151,503)
Share of profit or loss of investment in associates and JVs	8,352	(211,084)	(562,133)
Income tax expense	(977,853)	(495,874)	(390,000)
Profit (loss)	2,790,855	1,511,383	181,495
Assets	70,017,816	69,914,939	70,102,972
Investment in associates	16,116,654	16,109,360	17,457,391
Acquisition of non-currentassets	2,033,184	2,334,842	2,102,674
Liabilities	19,057,249	20,292,764	21,078,613
Reportable segments [member] | Steel [member] | External customers [member]
Disclosure of operating segments [line items]
Revenues	30,230,368	26,844,154	28,292,824
Reportable segments [member] | Steel [member] | Internal customers [Member]
Disclosure of operating segments [line items]
Revenues	17,381,010	16,062,016	16,543,951
Reportable segments [member] | Steel [member] | Intersegment [Member]
Disclosure of operating segments [line items]
Revenues	12,004,614	8,992,783	9,146,808
Reportable segments [member] | Trading [member]
Disclosure of operating segments [line items]
Revenues	34,878,203	26,420,104	27,007,507
Interest income	32,799	40,424	55,630
Interest expenses	(121,967)	(70,841)	(76,672)
Depreciation and amortization	(206,490)	(165,863)	(166,814)
Impairment loss on property, plant and equipment and others	(140,839)	(45,995)	(17,281)
Impairment loss on available-for-sale financial assets		(28,988)	(1,410)
Share of profit or loss of investment in associates and JVs		(53,586)	(212,535)
Income tax expense	(109,710)	(18,629)	(4,772)
Profit (loss)	112,661	53,244	38,843
Assets	14,139,098	13,580,179	12,160,406
Investment in associates	1,134,798	1,100,973	1,097,971
Acquisition of non-currentassets	286,185	249,597	303,753
Liabilities	10,386,294	10,134,170	8,953,410
Reportable segments [member] | Trading [member] | External customers [member]
Disclosure of operating segments [line items]
Revenues	20,802,207	16,774,078	18,315,487
Reportable segments [member] | Trading [member] | Internal customers [Member]
Disclosure of operating segments [line items]
Revenues	14,075,996	9,646,026	8,692,020
Reportable segments [member] | Trading [member] | Intersegment [Member]
Disclosure of operating segments [line items]
Revenues	8,043,643	5,296,847	4,480,744
Reportable segments [member] | Construction [member]
Disclosure of operating segments [line items]
Revenues	7,285,530	7,482,051	9,867,847
Interest income	100,922	65,256	27,134
Interest expenses	(112,983)	(102,292)	(91,742)
Depreciation and amortization	(42,123)	(57,719)	(50,605)
Impairment loss on property, plant and equipment and others	(37,476)	(9,426)	(28,345)
Impairment loss on available-for-sale financial assets	(18,637)	(35,331)	(47,616)
Share of profit or loss of investment in associates and JVs	(8,555)	(283,833)	(25,223)
Income tax expense	(109,961)	107,520	(30,615)
Profit (loss)	24,545	(1,403,712)	(275,651)
Assets	8,609,753	9,501,046	9,997,683
Investment in associates	668,392	795,445	1,076,024
Acquisition of non-currentassets	99,190	25,533	276,863
Liabilities	5,744,693	6,780,380	5,716,550
Reportable segments [member] | Construction [member] | External customers [member]
Disclosure of operating segments [line items]
Revenues	6,886,606	6,768,348	8,515,780
Reportable segments [member] | Construction [member] | Internal customers [Member]
Disclosure of operating segments [line items]
Revenues	398,924	713,703	1,352,067
Reportable segments [member] | Construction [member] | Intersegment [Member]
Disclosure of operating segments [line items]
Revenues	329,215	557,526	1,090,193
Reportable segments [member] | Other reportable segment [member]
Disclosure of operating segments [line items]
Revenues	5,284,593	5,076,878	5,759,615
Interest income	17,940	13,564	16,173
Interest expenses	(100,656)	(126,523)	(141,095)
Depreciation and amortization	(255,620)	(264,299)	(282,817)
Impairment loss on property, plant and equipment and others	(8,564)	(88,696)	(22,979)
Impairment loss on available-for-sale financial assets	(13,421)	(24,902)	(40,261)
Share of profit or loss of investment in associates and JVs	(1,518)	(6,369)	(22,618)
Income tax expense	(77,172)	(56,026)	(18,718)
Profit (loss)	232,700	(25,889)	(65,570)
Assets	8,776,090	8,529,600	10,962,594
Investment in associates	1,193,895	1,200,295	1,186,307
Acquisition of non-currentassets	251,665	191,715	345,971
Liabilities	4,620,902	4,709,689	6,472,925
Reportable segments [member] | Other reportable segment [member] | External customers [member]
Disclosure of operating segments [line items]
Revenues	2,735,919	2,696,933	3,068,254
Reportable segments [member] | Other reportable segment [member] | Internal customers [Member]
Disclosure of operating segments [line items]
Revenues	2,548,674	2,379,945	2,691,361
Reportable segments [member] | Other reportable segment [member] | Intersegment [Member]
Disclosure of operating segments [line items]
Revenues	₩ 2,446,029	₩ 2,285,128	₩ 2,571,219

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Operating Segments - Reconciliation of Segment Revenues, Profit or Loss, Assets and Liabilities and Other Significant Items (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of operating segments [line items]
Revenue	₩ 60,186,867	₩ 52,939,771	₩ 58,522,268
Profit before income tax expense	4,095,051	1,411,609	150,345
Assets	79,785,629	80,137,614
Liabilities	32,458,904	34,372,345
Interest income	212,451	182,475	210,193
Interest expenses	(653,115)	(658,726)	(788,772)
Depreciation and amortization	(3,297,420)	(3,213,847)	(3,218,246)
Share of profit or loss of investment in associates	10,540	(88,677)	(506,054)
Share of profit or loss of investment in associates		(88,677)	(506,054)
Income tax expense	(1,185,740)	(379,544)	(266,560)
Impairment loss on property, plant and equipment and others	(302,967)	(368,939)	(454,667)
Impairment loss on available-for-sale financial assets	(123,214)	(248,404)	(142,781)
Other significant items	(5,339,465)	(4,775,662)	(5,166,887)
Reportable segments [member]
Disclosure of operating segments [line items]
Revenue	95,059,704	81,885,203	87,471,744
Profit before income tax expense	3,160,761	135,026	(120,883)
Assets	101,542,757	101,525,764	103,223,655
Liabilities	39,809,138	41,917,003	42,221,498
Interest income	280,488	245,454	238,758
Interest expenses	(757,963)	(759,001)	(870,276)
Depreciation and amortization	(3,360,366)	(3,276,416)	(3,282,916)
Share of profit or loss of investment in associates	(1,721)	(554,872)	(822,509)
Share of profit or loss of investment in associates		(554,872)	(822,509)
Income tax expense	(1,274,696)	(463,009)	(444,105)
Impairment loss on property, plant and equipment and others	(336,719)	(243,282)	(312,433)
Impairment loss on available-for-sale financial assets	(127,319)	(314,446)	(240,790)
Other significant items	(5,578,296)	(5,365,572)	(5,734,271)
Investments in subsidiaries, associates and joint ventures [Member]
Disclosure of operating segments [line items]
Assets	(15,555,972)	(15,322,271)
Goodwill and corporate FV adjustments [member]
Disclosure of operating segments [line items]
Profit before income tax expense	(84,370)	(123,110)	(95,150)
Assets	3,368,333	3,750,915
Liabilities	483,693	442,178
Interest expenses	1,304	(807)	1,282
Depreciation and amortization	(106,195)	(104,949)	(117,595)
Share of profit or loss of investment in associates		(38,732)
Income tax expense	21,270	21,945	24,294
Impairment loss on property, plant and equipment and others	(867)
Other significant items	(84,488)	(122,543)	(92,019)
Elimination of inter-segment amounts [member]
Disclosure of operating segments [line items]
Revenue	(34,404,604)	(28,801,690)	(29,279,399)
Profit before income tax expense	(102,922)	1,036,253	119,852
Assets	(10,330,159)	(10,191,413)
Liabilities	(8,731,880)	(8,434,580)
Interest income	(68,037)	(62,979)	(28,565)
Interest expenses	103,544	101,082	80,222
Depreciation and amortization	169,141	167,518	182,265
Share of profit or loss of investment in associates	12,261
Share of profit or loss of investment in associates		504,927	316,455
Income tax expense	47,203	56,379	142,872
Impairment loss on property, plant and equipment and others	34,619	(125,657)	(142,234)
Impairment loss on available-for-sale financial assets	4,105	66,042	98,009
Other significant items	302,836	707,312	649,024
Income tax expense [Member]
Disclosure of operating segments [line items]
Profit before income tax expense	1,206,223	384,685	276,939
Basis difference [Member]
Disclosure of operating segments [line items]
Revenue	(468,233)	(143,742)	329,923
Profit before income tax expense	(84,641)	(21,245)	(30,413)
Assets	760,670	374,619
Liabilities	897,953	447,744
Income tax expense	20,483	5,141	10,379
Other significant items	₩ 20,483	₩ 5,141	₩ 10,379

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Operating Segments - Revenue and Non-current Assets by Geographic Area (Detail) - KRW (₩) ₩ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of geographical areas [line items]
Revenue	₩ 60,186,867	₩ 52,939,771	₩ 58,522,268
Non-current assets	38,900,718	40,976,788
Domestic [member]
Disclosure of geographical areas [line items]
Non-current assets	30,790,462	31,772,641
Japan [member]
Disclosure of geographical areas [line items]
Non-current assets	162,328	187,266
China [member]
Disclosure of geographical areas [line items]
Non-current assets	1,284,561	1,451,405
Asia-other [member]
Disclosure of geographical areas [line items]
Non-current assets	5,266,799	6,163,388
North America [member]
Disclosure of geographical areas [line items]
Non-current assets	277,249	168,800
Other countries [member]
Disclosure of geographical areas [line items]
Non-current assets	1,119,319	1,233,288
Basis difference [Member]
Disclosure of geographical areas [line items]
Revenue	(468,233)	(143,742)	329,923
Reportable segments [member]
Disclosure of geographical areas [line items]
Revenue	95,059,704	81,885,203	87,471,744
Reportable segments [member] | External customers [member]
Disclosure of geographical areas [line items]
Revenue	60,655,100	53,083,513	58,192,345
Reportable segments [member] | External customers [member] | Domestic [member]
Disclosure of geographical areas [line items]
Revenue	38,882,220	34,883,941	39,268,907
Reportable segments [member] | External customers [member] | Japan [member]
Disclosure of geographical areas [line items]
Revenue	2,200,405	1,892,022	1,934,808
Reportable segments [member] | External customers [member] | China [member]
Disclosure of geographical areas [line items]
Revenue	6,731,214	5,908,046	5,756,867
Reportable segments [member] | External customers [member] | Asia-other [member]
Disclosure of geographical areas [line items]
Revenue	7,750,553	5,649,843	5,888,045
Reportable segments [member] | External customers [member] | North America [member]
Disclosure of geographical areas [line items]
Revenue	1,725,120	1,899,291	1,921,039
Reportable segments [member] | External customers [member] | Other countries [member]
Disclosure of geographical areas [line items]
Revenue	₩ 3,365,588	₩ 2,850,370	₩ 3,422,679