Bucketplace, which operates the lifestyle application "Ohouse," recorded its first profit in its 10-year history last year. Revenue for 2024 is projected at 287.9 billion won, with an operating profit of 570 million won. Compared to the previous year, revenue increased by 22.3%, and the operating profit turned around from a deficit of 1.99 billion won.
However, industry analysts noted that the performance should not be accepted at face value. In the past few years, regarding Bucketplace's performance structure, there are concerns that this profit might be an example of "numerical illusion" created by changes in accounting standards.
According to related industries on the 29th, Bucketplace started applying the domestic general accounting standards (GAAP) instead of International Financial Reporting Standards (IFRS) last year. The main reason for this is due to the accounting treatment of redeemable convertible preference shares (RCPS). Although they are called "preference shares," RCPS can be redeemed at any time under certain conditions and can also be converted into common shares. Bucketplace raised most of its investment through RCPS.
What is noteworthy is that the classification of RCPS as either "liability" or "equity" depends on the accounting standards. Under IFRS, RCPS is classified as a liability, and the conversion rights contained within it (which allow conversion into more shares if the stock price falls below a certain level) are also calculated as derivative liabilities, reflecting annual losses. In contrast, GAAP considers the entire RCPS as equity and does not calculate derivative evaluation losses at all. This structure makes it look safe like a "bond" from the investors' perspective while appearing as "equity" from the company's perspective.
With the change in accounting standards, Bucketplace's accounting liabilities decreased by approximately 1 trillion won compared to 2023, while equity increased by nearly 1 trillion won. Although the net profit under IFRS was a deficit of 57.8 billion won, it turned into a profit of 2.3 billion won under GAAP. In other words, a difference of over 60 billion won occurred solely due to the change in accounting standards. The change in accounting standards shifted its image from a "liability corporation" to a "strong equity corporation."
Experts in accounting explain that it is challenging to view this process as having any significant change in actual cash flow or business operations. When looking at the actual cash flow statement, the difference in operating cash flow between the two standards is less than 5 billion won. The assessment that "Ohouse"'s profit transition is closer to a result of changing accounting treatment rather than an actual improvement in revenue is prevalent.
Certainly, there are growth drivers for the platform itself. The interior construction service's transaction volume nearly doubled within a year of its introduction, surpassing a cumulative 1 trillion won, and the number of monthly active users (MAU) is estimated to be around 10 million across app and web platforms. The strategies for the future are also concrete, including the launch of the in-house furniture brand "Layer," expansion of advertisers, and the growth of commerce in Japan. However, RCPS is an investment with repayment claims and revenue guarantee conditions attached, remaining a financial burden until an initial public offering (IPO).
Kwon Soon-hwan, a deputy representative at Milestone Accounting Corporation, said, "Considering the current situation where most startups are attracting investments in the form of redeemable convertible preference shares (RCPS), it is highly likely that cases similar to 'Ohouse' will continue to emerge in the future," adding, "Startups need to recognize these risks in advance and develop effective responses."