The introduction of International Financial Reporting Standards in 2011 will make Korean exporters' profits and financial conditions look worse, a report says.

The report, released Sunday by the LG Economic Research Institute, says the adoption of IFRS would cut exporters' operating margin by 0.9 percentage point and raise their debt-to-equity ratio by 72.5 percentage points because the template is apt to reveal companies' hidden weaknesses. 

IFRS is a global accounting standard used in 100 nations and designed to show corporate earnings based on consolidated financial statements. Korea is adopting it for all listed companies from fiscal year 2011, and Samsung Electronics recently announced it will introduce IFRS from next year.

"The adoption of IFRS could reveal a company's hidden weaknesses, and investors could be confused by the difference in the information they were given and what they find out," said Park Sang-soo, a researcher at the LG institute.