EX-99.1 2 gravity_2024yeauditreportc.htm EX-99.1 Document






GRAVITY CO., LTD. and Subsidiaries

Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

(With Independent Auditor’s Report Thereon)

    







Contents



Page

Independent Auditor’s Report    1
Consolidated Financial Statements
Consolidated Statements of Financial Position    3
Consolidated Statements of Comprehensive Income    5
Consolidated Statements of Changes in Equity    6
Consolidated Statements of Cash Flows    7
Notes to the Consolidated Financial Statements    8















Independent Auditor’s Report
English Translation of a Report Originally Issued in Korean

To the Board of Directors and Shareholders of Gravity Co., Ltd.:

Opinion
We have audited the consolidated financial statement of Gravity Co., Ltd. and its subsidiaries (collectively referred to as the ”Group”), which comprise the consolidated statements of financial position as at December 31, 2024 and 2023, and the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2024 and 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).
Basis for Opinion
We conducted our audit in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the consolidated financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Matter
Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

1


As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Samil PricewaterhouseCoopers


Seoul, Korea
March 21, 2025
This report is effective as of March 21, 2025, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.



2

GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Financial Position

As of December 31, 2024 and 2023


(In thousands of won)
Notes

December 31, 2024


December 31, 2023


Assets

Current assets
Cash and cash equivalents5,6,23W228,898,026 184,081,815
Short-term financial instruments
6,23324,304,040277,215,000
Accounts receivable, net6,7,14,2381,152,45871,212,897
Other receivables, net6,7,231,572,1823,637,586
Prepaid expenses148,115,2922,993,884
Other current financial assets6,236,601,5194,438,717
Other current assets2,966,2723,319,107
653,609,789546,899,006
Non-current assets
Property and equipment, net8,229,957,08610,150,750
Intangible assets, net97,056,5486,369,958
Other non-current financial assets6,231,766,5881,824,076
Other non-current assets
10
8,451,4436,984,797
Deferred tax assets195,617,4885,952,134

32,849,15331,281,715
Total assets
W686,458,942578,180,721




See accompanying notes to the consolidated financial statements.
3


GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Financial Position, Continued

As of December 31, 2024 and 2023

(In thousands of won)
NotesDecember 31, 2024December 31, 2023

Liabilities
Current liabilities
Accounts payable
6,23W67,929,91161,777,889

Deferred revenue
1426,760,73218,092,463

Withholdings1,587,7593,072,036

Accrued expenses 6,232,651,4262,313,022

Income tax payable
19
6,507,22716,927,054

Other current liabilities6,22,233,211,7524,251,029

108,648,807106,433,493
Non-current liabilities
Long-term accounts payable6,23220,108677,520
Long-term deferred revenue142,571,8621,784,849
Other non-current liabilities6,22,235,361,0253,174,635
Deferred tax liabilities
19
1,293,6812,382,262
9,446,6768,019,266
Total liabilities
W118,095,483114,452,759

Equity
Equity attributable to owners of the Parent Company
Share capital
1,133,474,4503,474,450
Capital surplus
1326,979,36127,098,264
Other components of equity
1323,800,5514,016,535
Retained earnings
13513,417,859428,498,582
Non-controlling interest
691,238640,131
Total equity
568,363,459463,727,962
Total liabilities and equity
W686,458,942578,180,721




See accompanying notes to the consolidated financial statements.
4


GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Comprehensive Income

For the years ended December 31, 2024 and 2023
(In thousands of won, except per share amounts)Notes20242023
Revenues 14,24,25
  Online games
W
76,989,131 81,017,362
  Mobile games 405,675,976629,604,084
 Other revenue
18,180,01314,894,489
500,845,120725,515,935
Cost of revenues 15306,903,066484,958,333
Gross profit193,942,054240,557,602
Selling, general and administrative expenses
15,16107,753,36479,552,396
Operating profit 2486,188,690161,005,206
Non-operating income and expenses
Finance income
6,1730,888,98923,266,528
Finance costs
6,17(9,925,670)(14,934,727)
Other non-operating income
18788,898913,359
Other non-operating expenses
18(1,593,873)(1,551,757)
Profit before income tax expense106,347,034168,698,609
Income tax expense 1921,444,82636,716,548
Profit for the yearW84,902,208 131,982,061
Profit (loss) attributable to:
Owners of the Parent CompanyW84,919,277132,019,054
Non-controlling interests(17,069)(36,993)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss


19,825,6841,558,944
Foreign currency translation adjustments
19,768,017
1,536,445
Non-controlling interest in foreign currency translation adjustment
57,66722,499
Items that will not be reclassified to profit or loss
23,9547,136
Remeasurement of defined benefit liabilities
15,9994,415
Non-controlling interest in remeasurement of defined benefit liabilities
7,9552,721
Total comprehensive income for the year
W
104,751,846133,548,141
Total comprehensive income (loss) attributable to:
Owners of the Parent Company
W104,703,293133,559,914
Non-controlling interests
48,553(11,773)
Earnings per share attributable to the equity holders of the Parent Company
Basic earnings per share (in won)
20W12,22118,999
Diluted earnings per share (in won)
20W12,22118,999



See accompanying notes to the consolidated financial statements.
5

GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Changes in Equity

For the years ended December 31, 2024 and 2023


(In thousands of won)
Equity attributable to owners of the Parent Company
Notes
Share
capital
Capital
surplus
Other components of equityRetained earningsSub totalNon-controlling interests
Total equity
Balance at January 1, 2023W3,474,45027,098,2642,475,675296,479,528329,527,917651,904330,179,821
Profit for the year
---132,019,054132,019,054(36,993)131,982,061
Remeasurements of defined benefit liabilities
--4,415-4,4152,7217,136
Foreign currency translation adjustments
--1,536,445-1,536,44522,4991,558,944
Balance at December 31, 2023W3,474,45027,098,2644,016,535428,498,582463,087,831640,131463,727,962
Balance at January 1, 2024W3,474,45027,098,2644,016,535428,498,582

463,087,831640,131463,727,962
Total comprehensive income:

Profit for the year
---84,919,277

84,919,277(17,069)84,902,208
Remeasurements of defined benefit liabilities
--15,999-15,9997,95523,954
Foreign currency translation adjustments

--19,768,017-19,768,01757,66719,825,684
Transactions with Owners:

Capital contribution from non-controlling interests

-(13,001)--(13,001)(3,008)(16,009)
Transactions with non-controlling interests

-(105,902)--(105,902)5,562(100,340)
Balance at December 31, 2024W3,474,45026,979,36123,800,551513,417,859567,672,221691,238568,363,459



See accompanying notes to the consolidated financial statements.
6

GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Cash Flow

For the years ended December 31, 2024 and 2023
(In thousands of won)Notes20242023
Cash flows from operating activities







Profit for the year


W
84,902,208


131,982,061
Adjustments
21


14,492,995


36,164,732
Changes in operating assets and liabilities
21


(3,821,168)


(17,915,061)
Interest received



15,053,915


10,434,574
Interest paid



(130,027)


(156,631)
Income taxes paid



(31,942,749)


(28,079,938)
Net cash provided by operating activities



78,555,174


132,429,737








Cash flows from investing activities







Decrease in other current financial asset



6,667


3,079
Proceeds from disposal of property and equipment
8


6,673


21,024
Decrease in other non-current financial assets



8,496 


- 
Increase in short-term financial instruments



(42,264,550)


(110,179,175)
Purchase of property and equipment
8


(613,947)


(2,461,226)
Purchase of intangible assets
9


(4,147,357)


(3,337,218)
  Increase in other non-current financial assets



(30,374)


(626,184)
Net cash used in investing activities



(47,034,392)


(116,579,700)








Cash flows from financing activities







Repayment of lease liabilities
22


(4,525,288)(4,083,272)
Cost of issuing shares of subsidiaries



(16,009)-
Acquisition of non-controlling interests



(100,339)-
Net cash used in financing activities



(4,641,636)


(4,083,272)








Effects of exchange rate changes on cash and cash equivalents


17,937,065


2,437,709
Net increase (decrease) in cash and cash equivalents



44,816,211


14,204,474
Cash and cash equivalents at beginning of the year



184,081,815


169,877,341
Cash and cash equivalents at end of the year


W
228,898,026


184,081,815


See accompanying notes to the consolidated financial statements.

    
7

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
1. General Information
(1) The Parent Company
GRAVITY CO., LTD. (“the Parent Company”) was incorporated on April 4, 2000, to engage in developing and publishing online and mobile games, and other related business. The Parent Company’s headquarter is located at 15F, 396 World Cup buk-ro, Mapo-gu, Seoul, Korea. The Parent Company’s principal game product, “Ragnarok”, a massive multi-player online role-playing game, was commercially launched in August 2002, and currently operated internationally in 91 markets. The Parent Company also operates many other games.
On February 8, 2005, the Parent Company listed its shares on the Nasdaq Stock Market in the United States, and issued 1,400,000 shares of common stocks in the form of American Depositary shares (“ADSs”) under the symbol “GRVY”.
As of December 31, 2024, the Parent Company’s total paid-in capital amounts to W3,474,450 thousand. The Parent Company’s major shareholders and their respective percentage of ownership as of December 31, 2024 are as follows:

Number of shares

Ownership (%)
GungHo Online Entertainment, Inc.

4,121,737
59.31
Others

2,827,163
40.69

6,948,900
100.00
(2) Consolidated subsidiaries
Details of the consolidated subsidiaries as of December 31, 2024 and 2023 are as follows:




Percentage of ownership (%)
Subsidiaries
Location
Main business
Fiscal
year end
December 31, 2024

December 31, 2023
Gravity Interactive, Inc.
USA

Online and mobile game services
December

100100
Gravity NeoCyon, Inc. (*)
Korea

Mobile Game Development and Service

December

10099.53
Gravity Communications Co., Ltd.
Taiwan

Online and mobile game services
December

100100
PT. Gravity Game Link
Indonesia

Online and mobile game services

December

7070
Gravity Game Tech Co., Ltd.
Thailand

Online and mobile game services

December

100100
Gravity Game Arise Co., Ltd.
Japan

Online and mobile game services

December

100100
Gravity Game Hub PTE., Ltd.
Singapore

Online and mobile game services

December

100100
Gravity Game Vision Limited
Hong Kong

Online and mobile game services

December

100100

(*) Gravity NeoCyon, Inc. was acquired an additional 0.47% during the year ended December 31, 2024 with 100% ownership interest held by the Parent Company.



8

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
1. General Information, Continued
(3) Condensed financial information of subsidiaries as of and for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)

2024
Subsidiaries
Total
assets(*)

Total
liabilities(*)

Revenues(*)


Profit (loss)
for the period(*)
Gravity Interactive, Inc.
W28,078,172

16,855,468

39,938,248


73,691
Gravity NeoCyon, Inc.

15,000,011


4,281,053


20,315,748


1,771,492
Gravity Communications Co., Ltd.

27,121,263


6,687,225


35,188,837


1,754,375
PT. Gravity Game Link

2,693,086


366,844


1,475,922


(50,963)
Gravity Game Tech Co., Ltd.

72,122,833


23,779,945


48,771,433


6,860,364
Gravity Game Arise Co., Ltd.

7,712,161


1,192,327


5,574,326


(6,237,282)
Gravity Game Hub PTE., Ltd.

68,727,648


13,683,947


89,256,880


13,815,260
Gravity Game Vision Limited

72,467,900


26,755,643


160,067,411


21,945,899

(*) Amounts before eliminating intercompany transactions.

(In thousands of won)

2023
Subsidiaries
Total
assets(*)

Total
liabilities(*)

Revenues(*)


Profit (loss)
for the period(*)
Gravity Interactive, Inc.
W23,445,002

13,670,750

49,817,549


1,113,103
Gravity NeoCyon, Inc.

11,747,448


5,783,968


19,408,225


(1,270,425)
Gravity Communications Co., Ltd.

35,754,253


9,227,145


33,122,388


10,115,876
PT. Gravity Game Link

2,461,089


302,622


2,234,131


(103,406)
Gravity Game Tech Co., Ltd.

50,672,065


8,080,609


30,603,821


11,308,220
Gravity Game Arise Co., Ltd.

7,058,412


1,683,204


3,806,986


(5,392,804)
Gravity Game Hub PTE., Ltd.

74,229,285


37,718,412


287,949,942


34,159,815
Gravity Game Vision Limited

51,811,357


10,752,847


145,653,444


23,547,185

(*) Amounts before eliminating intercompany transactions.















9

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
2. Basis of Presentation
The consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”), as prescribed in the Act on External Audits of Stock Companies, Etc. in the Republic of Korea. The accompanying consolidated financial statements have been restructured and translated into English from the Korean language financial statements.
Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Gravity Co., Ltd. and its subsidiaries (the "Group") financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.
These consolidated financial statements were authorized for issuance by the Board of Directors on March 7, 2025, and are expected to be submitted for approval at the shareholders’ meeting to be held on March 31, 2025.

(1) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis.
(2) Use of judgments and estimates
The preparation of the consolidated financial statements in conformity with K-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.
The estimates and assumptions that have significant risk of affecting the carrying amounts of assets and liabilities for the reporting period are as follows: 
(a) Deferred revenue
The Group sells virtual currency and items that can be used in mobile games to game users. For each game in each country, the Group estimates and applies the game user's life cycle in order to recognize revenue generated by micro-transactions. The game user's life cycle is estimated based on the average period from the game user's first payment date to the last access date for active paying game users. The Group considers a game user as an active user if the period between the time of the user’s most recent access of the game and the end of reporting period equals or is shorter than the estimated game users’ life cycle. For remaining amounts of virtual currency and items that active users own at period-end, the related revenue is deferred considering the items’ attributes. The Group estimates the user’s life cycle by analyzing game users’ activity patterns such as payment and access and it periodically reviews if there is any change of these estimates.

10

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
3. New Standards and Interpretations Adopted During the Year and Resulting Changes in Accounting Policies
The Group has applied the following standards and amendments for the first time for the annual reporting period commencing on January 1, 2024.
(1)Amendments to K-IFRS No. 1001 ‘Presentation of Financial Statements’ – Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants
The amendments to Korean IFRS 1001 clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. Covenants with which the Group must comply after the reporting date do not affect a liability’s classification at that date. The amendment requires the Group to disclose the information about the risk that the liabilities could become repayable within 12 months after the reporting date if a liability is classified as a non-current liability that the Group must comply with covenants within 12 months after the reporting period. The amendments do not have a significant impact on the financial statements
(2)Amendments to K-IFRS No. 1001 ‘Presentation of Financial Statement’ – Disclosure of Cryptographic Assets
The amendments require additional disclosure for cryptographic assets held by the Group, cryptographic assets entrusted by customers to the Group, and the issuance and transfer of cryptographic assets. The amendment requires the Group to disclose general information about cryptographic assets, including the accounting policies, the acquisition cost for each type of cryptographic asset, and the fair value of the assets if the Group holds cryptographic assets. In addition, if the Group issues cryptographic assets, the amendment requires the Group to disclose its obligations related to the issued cryptographic assets and the status of its compliance with those obligations, the timing and amount of revenue recognition for disposed cryptographic assets, the quantity of cryptographic assets held after issuance, and any significant contractual terms. The amendments do not have a significant impact on the financial statements.
(3)Amendments to K-IFRS No. 1007 ‘Statement of Cash Flows’ and K-IFRS No. 1107 ‘Financial Instruments: Disclosures’ – Supplier finance arrangements
The amendments require entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk when applying supplier finance arrangements. The amendments do not have a significant impact on the financial statements.
11

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
3. New Standards and Interpretations Adopted During the Year and Resulting Changes in Accounting Policies, Continued

(4) Amendments to K-IFRS No. 1116 ‘Lease’ – Lease Liability in a Sale and Leaseback


The amendments require a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee when subsequently measuring lease liabilities arising from a sale and leaseback. The amendments do not have a significant impact on the financial statements.
4. Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements in accordance with the K-IFRS are set out below. These policies have been consistently applied to all years presented, except if mentioned otherwise in Note 3.
(1) Consolidation
The Group has prepared the consolidated financial statements in accordance with K-IFRS No. 1110 Consolidated Financial Statements.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group 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 to direct the activities of the entity. Subsidiaries are consolidated from the date on which control is obtained by the Group. They are deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred is measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred.
The excess of consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in the profit as a bargain purchase.
Intercompany transactions, balances and unrealized gains on transactions between consolidated companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
12

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(2) Segment reporting
Information of each operating segment is reported in a manner consistent with the internal business segment reporting provided to the chief operating decision-maker (Note 24). The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.
(3) Cash and Cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, and other short-term investments with original maturities of three months or less that are readily convertible to known amounts of cash.
(4) Financial Assets
(a) Classification
At initial recognition, the Group classifies its financial assets in the following measurement categories:
measured at fair value through profit or loss;
measured at fair value through other comprehensive income; and
measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Group reclassifies debt investments when, and only when its business model for managing those assets changes.
For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of equity instruments not elected as equity investment at fair value through other comprehensive income will be recognized in profit or loss.
(b) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, for financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
13

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued

(4) Financial Assets, Continued
(b) Measurement, Continued
(i) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group classifies its debt instruments into one of the following three measurement categories:
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method.
Fair value through other comprehensive income: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method. Foreign exchange gains and losses are presented in ‘finance income or costs’ and impairment losses are presented in ‘other non-operating expenses’.
Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit or loss within ‘finance income or costs’ in the year in which it arises.


14

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(b) Measurement, Continued
(ii) Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments, which are held for long-term investment or strategic purpose, in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘other non-operating income or expenses’ in the statement of profit or loss as applicable. Impairment loss (reversal of impairment loss) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.
(c) Impairment
The Group recognizes loss allowances for expected credit losses(“ECLs”) on:
financial assets measured at amortized cost;
debt investments measured at fair value through other comprehensive income; and
contract assets under K-IFRS No. 1115.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:
debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for accounts and other receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, that includes forward-looking information.

15

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(c) Impairment, Continued
The Group considers a financial asset to be in default when:
the debtor is unlikely to pay its obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is held); or
the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at fair value through other comprehensive income are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at fair value through other comprehensive income, the loss allowance is charged to profit or loss.

16

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(d) Recognition and Derecognition
Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
If a transfer does not result in derecognition because the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.
(e) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated statements of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.
(5) Accounts receivable
Account receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components in which case they are recognized at fair value. Account receivables are subsequently measured at amortized cost using the effective interest method, less loss allowance.
(6) Property and Equipment
Property and equipment are initially measured at cost. The cost of property 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 the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

17

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(6) Property and Equipment, Continued
Property and equipment, subsequently, are carried at cost less accumulated depreciation and accumulated impairment losses.
Subsequent costs are recognized in the carrying amount of property and equipment at cost or, if appropriate, as a separate item if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured.
Depreciation of all property and equipment, except for land, is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives as follows:
Estimated Useful Lives
Computer and other equipment4 years
Furniture and fixture4 years
Vehicles4 years
Leasehold improvements(*)
Right-of-use assets(*)

(*) The Group depreciates Right-of-use asset and the Leasehold improvements from the commencement date and the available date to the earlier date between the end of the lease term and the expiration date of Right-of-use asset’s useful life using the straight-line method.
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.
(7) Intangible Assets
Intangible assets, except for goodwill, are initially recognized at its historical cost, and carried at cost less accumulated amortization and accumulated impairment losses.
The Group amortizes intangible assets with a limited useful life using the straight-line method over the following periods:
Estimated Useful Lives
Software1~3 years
Industrial property rights10 years
Other intangible assets3 years
Expenditure on research activities is recognized in profit or loss as incurred. Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditure is recognized in profit or loss as incurred.
18

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(7) Intangible Assets, Continued
The Group entered into a game licensing agreement with a number of third parties to gain exclusive rights to the games developed by those companies. The license fee payments are recognized as other intangible assets and amortized over the term of the contract using the straight-line method.
(8) Impairment of Non-financial Assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than contract assets, incremental costs of obtaining a contract, costs to fulfil a contract, employee benefit related assets and deferred tax assets) 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 amounts to their carrying amounts.
The recoverable amount of an asset or cash generating unit (“CGU”) is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using an adjusted discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized in profit or loss if the carrying amount of an asset or CGU exceeds its recoverable amount.
(9) Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in K-IFRS No. 1116.

(a) As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component by class of underlying asset.
The Group determines the lease term as the non-cancellable period of a lease, together with both (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and (b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. When the lessee and the lessor each has the right to terminate the lease without permission from the other party, the Group should consider a termination penalty in determining the period for which the contract is enforceable.
19

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued

(9) Leases, Continued
(a) As a lessee, Continued
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rates.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
20

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued

(9) Leases, Continued
(a) As a lessee, Continued
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘Property and equipment’ and lease liabilities in ‘Other current liabilities’ and ‘Other non-current liabilities’ in the consolidated statement of financial position.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(b) As a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, then the Group applies K-IFRS No. 1115 to allocate the consideration in the contract.
The Group applies the de-recognition and impairment requirements in K-IFRS No. 1109 to the net investment in the lease. The Group further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.
The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘non-operating income’.
21

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023

4. Significant Accounting Policies, Continued

(10) Financial Liabilities
(a) Classification and measurement
The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not a designated as hedging instruments and an embedded derivative that is separated are also classified as held for trading.
The Group classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for de-recognition, as financial liabilities carried at amortized cost and present as ‘accounts payable’, ‘other current liabilities’ and ‘other non-current liabilities’ in the consolidated statement of financial position.
(b) De-recognition
Financial liabilities are removed from the consolidated statement of financial position when it is extinguished; for example, when the obligation specified in the contract is discharged or cancelled or expired or when the terms of an existing financial liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
(11) Provisions and Contingent Liabilities
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
In addition, when there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability, a disclosure regarding the contingent liabilities is made in the notes to the financial statements.
22

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(12) Foreign Currency Translation
(a) Functional and presentation currency
Items included in the consolidated financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rate at the reporting date are generally recognized in profit or loss. They are recognized in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of net investment hedges in a foreign operation.
Exchange differences arising on non-monetary financial assets and liabilities such as equity instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive income are recognized in profit or loss and other comprehensive income, respectively, as part of the fair value gain or loss.
(13) Statement of cash flows
The Group has elected to present cash flows from operating activities using the indirect method. Cash flows denominated in a foreign currency are reported using average exchange rate.
(14) Revenues from contracts with customers
The Group engages in game licensing, IP licensing and game publishing businesses.
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or rendering of services arising from the normal course of the business. Amounts recognized as revenue are net of value added taxes, returns, rebates and discounts.

23

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(14) Revenues from contracts with customers, Continued
(a) Revenue from micro-transaction and subscription
The Group recognizes micro-transaction revenue of online and mobile games when the Group satisfies its performance obligations.
Whether the performance obligations are satisfied depends on the natures of virtual currency and in-game virtual items. Items are categorized into consumable, periodic, and permanent in-game virtual items.
Consumable in-game virtual items are items that are consumed by the specific action of a game user, and periodic in-game virtual items are items that can be used repeatedly during a specified effective period. Permanent in-game virtual items are items that can be used by game users repeatedly without an effective period.
The accounting policy on revenue recognition is described below in relation to micro-transaction revenue from the sales of virtual currency and items.
(i) Online Games
The specific method of recognizing and deferring revenue for virtual currency and consumable, periodic, and permanent items purchased with virtual currency is as follows.
At the end of the reporting period, the Group defers the total amount of remaining virtual currency.
For consumable in-game virtual items, the related revenue is recognized when the in-game virtual item is consumed. The Group defers the revenue for remaining amounts of virtual items owned by active paying users within the estimated user life cycle at the end of the reporting period.
For periodic in-game virtual items, the related revenue is recognized ratably over the effective period. The Group defers the revenue for remaining effective period.
For permanent in-game virtual items, revenue is recognized ratably over the estimated user life cycle. The Group defers the revenue for remaining period of estimated user life cycle at the end of the reporting period.
(ii) Mobile Games
The specific method of recognizing and deferring revenue for virtual currency and consumable, periodic, and permanent items purchased with virtual currency is as follows.
Mobile game users purchase virtual currency that can be used to purchase in-game items. The Group has no refund obligation after the game users purchase virtual currency.
At the end of the reporting period, the Group defers the revenue for the remaining virtual currency possessed by active paying users.

24

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(14) Revenues from contracts with customers, Continued
(a) Revenue from micro-transaction and subscription, Continued
(ii) Mobile Games, Continued
For consumable in-game virtual items, revenue is recognized when the in-game virtual item is consumed. The Group defers the revenue for remaining virtual items possessed by active users within the estimated user life cycle at the end of the reporting period.
For periodic in-game virtual items with effective period, revenue is recognized ratably over the effective period. The Group defers the revenue for remaining effective period.
For permanent in-game virtual items, revenue is recognized ratably over the estimated user life cycle. The Group defers the revenue for remaining period of estimated user life cycle at the end of the reporting period.
(b) Royalties and License Fees
In connection with the Group’s online and mobile games, the Group enters into license agreement in connection with the right to access the intellectual property, such as game character images and stories. The Group believes that the agreement is a promise to provide a right to the customer to access the related IP because the Group will undertake activities that significantly affect the intellectual property to which the customer has rights, the rights granted by the license directly expose the customer to any positive or negative effects of the Group’s activities, and those activities do not result in the transfer of a good or a service to the customer as those activities occur. Therefore, the Group’s performance obligations in connection with these agreements are satisfied over time.
Since the nature of the license promise is to provide customers with access to the intellectual property of the Group during the license period, the Group's performance obligation corresponds to the performance obligation satisfied over time, and revenue is recognized over the license period. The Group recognizes revenue for the license fee through the straight-line method during the contract period, and for the running royalty revenue, the revenue is recognized on an accrual basis at the time the revenue distribution is established in accordance with the terms of the contract. When the running royalty revenue based on the contractual royalty rate and the actual revenue of the licensee exceeds the ratably recognized minimum guarantee, the excess amount is then recognized as revenue and accounts receivable.
(c) Other revenue
Other revenue consists of revenue from sales of console games, game character merchandise, animation and other services, including website development and operation services for third parties. Revenues from development and operation services for third parties are recognized over time by measuring progress towards complete satisfaction of a performance obligation.

25

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(14) Revenues from contracts with customers, Continued
(d) Incremental costs of obtaining contract
The Group pays platform processing fees to operate mobile games on third party platforms. These fees are charged based on the game users’ purchases in cash and considered as incremental cost of obtaining contracts with customer and therefore capitalized. The Group presents these costs as prepaid expense and amortizes them to costs of revenue at the same time when the related revenue of the services provided to the game users are recognized.
(15) Current and Deferred Tax
The tax expense for the period consists of current and deferred tax. Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. The tax expense is measured at the amount expected to be paid to the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and tax credit.
The Group recognizes a deferred tax liability all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint arrangements, except to the extent that the Group 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. In addition, the Group recognizes a deferred tax asset for all deductible temporary differences arising from such investments to the extent that it is probable the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis.

26

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(16) Employee Benefits
(a) Short-term employee benefits
Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Group during an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.
(b) Post-employment benefits
The Group’s retirement pension plans are divided into defined contribution plans and defined benefit plans.
The Group has a defined contribution pension plan with the related contribution to the pension plan recorded as severance benefit expenses for the employees with service period over a year. The Group recognizes provision for severance benefits for the employees with service period less than a year.
A defined benefit plan is a pension plan that is not a defined contribution plan. Generally, post-employment benefits are payable after the completion of employment, and the benefit amount depended on the employee’s age, periods of service or salary levels. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service costs.

27

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
4. Significant Accounting Policies, Continued
(17) Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after January 1, 2024 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.
The following new and amended standards and interpretations are not expected to have a significant impact on the Group’s consolidated financial statements.
Lack of Exchangeability (Amendment to K-IFRS 1021 ‘The Effects of Changes in Foreign Exchange Rates’)
Classification and Measurement of Financial Instruments (Amendment to K-IFRS 1109 ‘Financial Instruments’ and K-IFRS 1107 ‘Financial Instruments: Disclosures’)
Annual Improvements to IFRS Accounting Standards
-K-IFRS 1101 ‘First-time adoption of International Financial Reporting Standards’;
-K-IFRS 1107 ‘Financial instruments: Disclosures’;
-K-IFRS 1109 ‘Financial instruments’;
-K-IFRS 1110 ‘Consolidated financial instruments’; and
-K-IFRS 1007 ‘Statement of cash flows’


5. Cash and cash equivalents
(1) Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:
(In thousands of won) December 31, 2024December 31, 2023
Demand deposits, etc.W228,898,026184,081,815
(2) The Group does not have any restricted cash and cash equivalents as of December 31, 2024 and 2023.



28

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
6. Financial Instruments by Category
(1) Carrying amounts of financial instruments by category as of December 31, 2024 and 2023 are as follows:
(In thousands of won)


December 31, 2024
December 31, 2023
Financial assets at amortized cost
Cash and cash equivalents

W
228,898,026
 

184,081,815
Short-term financial instruments


324,304,040
 

277,215,000
Accounts receivable, net


81,152,458
 

71,212,897
Other receivables, net


15,557
 

7,499
Other current financial assets(*1)


6,601,519
 

4,438,717
Other non-current financial assets(*2)


1,766,588
 

1,824,076


W
642,738,188
 

538,780,004
(*1) Other current financial assets consist of accrued income and deposits.
(*2) Other non-current financial assets consist of deposits.


(In thousands of won)


December 31, 2024
December 31, 2023
Financial liabilities at amortized cost
Accounts payable(*)

W
63,327,918
 
57,614,579
Long-term accounts payable


220,108

677,520
Accrued expenses(*)


312,563

395,264
Other current liabilities


3,179,423
 
4,225,209
Other non-current liabilities


3,942,100

2,337,189


W
70,982,112
 
65,249,761

(*) Annual leave allowance, bonus accruals, etc. that should be paid to employees are excluded.


29

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
6. Financial Instruments by Category, Continued

(2) Net income(expenses) from financial instruments for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)20242023
Financial assets at amortized cost

 
Interest income
W
17,058,776 11,486,840
Differences in foreign currency
5,813,143 (1,653,930)

Financial assets at fair value through profit or loss
Interest income
-5,539
W
       22,871,919  9,838,449

(In thousands of won)20242023
Financial liabilities at amortized cost

 Interest expense
W
(135,377) (161,809)
 Differences in foreign currency
(1,773,223)(1,344,837)
W
(1,908,600) (1,506,646)

(3) Fair value hierarchy
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: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: all inputs other than quoted prices included in level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the assets or liabilities;
Level 3: unobservable inputs for the assets or liabilities.
The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets. These products are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of company-specific information. At this time, if all the significant input variables required to measure the fair value of a good are observable, the good is included in Level 2.
If more than one significant input variable is not based on observable market information, the item is included in Level 3.

30

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
6. Financial Instruments by Category, Continued
(3) Fair value hierarchy, Continued
The valuation techniques used to measure the fair value of a financial instrument include:
- Market price or dealer price of a similar financial instrument
- The fair value of derivative instruments is determined by discounting the amount to present value using the leading exchange rate as of the end of the reporting period
For the other financial instruments, the Group applied other valuation techniques such as discounted cash flow, etc.
7. Accounts and Other Receivables

(1) Accounts and other receivables as of December 31, 2024 and 2023 are as follows:
(In thousands of won)

December 31, 2024

December 31, 2023


Accounts
receivables

Other receivables

Accounts
receivables

Other receivables
Non-related party

W
78,368,0671,577,28369,867,2003,642,678
Related party


3,334,062-1,971,637-
Less: Loss allowance

(549,671)(5,101) (625,940)(5,092)
Accounts and other receivables, net

W
81,152,4581,572,182 71,212,8973,637,586
(2) Changes in the loss allowance of accounts and other receivables during the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)

2024

2023



Accounts
receivables

Other receivables

Accounts
receivables

Other receivables
Beginning balance

W
625,9405,092319,5354,809
Bad debt expenses


588,80991,401,565283
Write-off

(665,078)- (1,095,160)-
Ending balance

W
549,6715,101 625,9405,092
(3) Expected credit losses (ECLs) and credit risk exposures for accounts receivable as of December 31, 2024 and 2023 are as follows, Continued:


31

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
7. Accounts and Other Receivables, Continued

(a) Accounts receivable
(In thousands of won)

December 31, 2024

Expected loss rate(%)

Carrying
amount

Loss
allowance
Not due or overdue for less than 90 days

0.43 
W
81,335,050
350,478
More than 90 days ~ Less than 180 days
22.5 
214,517
48,305
More than 180 days ~ Less than 270 days
87.0 
12,85111,177
More than 270 days ~ Less than 1 year
100.0 
4,4304,430
More than 1 year
100.0 
135,281135,281
W
81,702,129
549,671
(In thousands of won)

December 31, 2023

Expected loss rate(%)

Carrying
amount

Loss
allowance
Not due or overdue for less than 90 days

 0.6
W
71,333,503437,524
More than 90 days ~ Less than 180 days
3.2314,96610,216
More than 180 days ~ Less than 270 days57.427,01015,507
More than 270 days ~ Less than 1 year87.35,2404,575
More than 1 year99.4158,118158,118
W71,838,837625,940


32

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
7. Accounts and Other Receivables, Continued
(b) Other receivables
(In thousands of won)

December 31, 2024

Expected loss rate(%)

Carrying
amount

Bad debt
allowance
Not due or overdue for less than 90 days

0.0W1,566,1009
More than 90 days ~ Less than 180 days
0.06,091-
More than 180 days ~ Less than 270 days0.0--
More than 270 days ~ Less than 1 year0.0--
More than 1 year1005,0925,092
W1,577,2835,101
(In thousands of won)

December 31, 2023

Expected loss rate(%)

Carrying
amount

Bad debt
allowance
Not due or overdue for less than 90 days

0.0W 3,637,586-
More than 90 days ~ Less than 180 days
0.0--
More than 180 days ~ Less than 270 days0.0--
More than 270 days ~ Less than 1 year0.0--
More than 1 year1005,0925,092
W 3,642,6785,092

In assessing the recoverability of accounts and other receivables, the Group considers changes in the credit rating of accounts and other receivables from the commencement of the credit to the end of the reporting period.

The Group applies simplified approach for accounts and other receivables to measure the loss allowance at an amount equal to lifetime expected credit losses. To measure the expected credit losses, accounts and other receivables are grouped based on credit risk characteristics and the duration of past due balances. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. The Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes the Group’s historical experience and informed credit assessment, that includes forward-looking information.

33

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
8. Property and Equipment
(1) Details of property and equipment as of December 31, 2024 and 2023 are as follows:
(In thousands of won)
December 31, 2024
December 31, 2023

Acquisition
cost

Accumulated depreciation

Carrying
amount
Acquisition cost
Accumulated depreciation

Carrying
amount
Computer and other equipment
W7,359,682(5,965,593)1,394,0897,185,694(5,649,592)1,536,102
Furniture and fixture

1,844,600(1,624,216)220,3841,887,411(1,620,887)266,524
Construction in- progress

---1,209,024-1,209,024
Vehicles

9,101(9,101)-9,101(7,773)1,328
Leasehold improvements

3,527,843(2,348,905)1,178,9382,172,021(1,655,049)516,972
Right-of-use assets

13,087,225(5,923,550)7,163,67515,513,706(8,892,906)6,620,800
W25,828,451(15,871,365)9,957,08627,976,957(17,826,207)10,150,750
(2) Changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows:

(In thousands of won)
 
2024
 
 

Computer and other equipment
Furniture
and fixture

Constru-ction in progress

Vehicles

Leasehold
Improve-ments

Right-of-use assets
Total
Beginning balance W1,536,102266,5241,209,0241,328516,9726,620,80010,150,750
Rent Adjustment
-----131,131

131,131
Acquisitions/Capital expenditure
  474,620130,505--11,0594,781,3835,397,567
Depreciation  (649,645)(180,149)-(1,328)(638,774)(4,552,951)(6,022,847)
Disposition/Disposals/
Removals
  -(69)----(69)
Substitution--(1,290,528)-1,290,528--
Foreign exchange differences
  33,0123,57381,504-(847)183,312300,554
Ending balance W1,394,089220,384--1,178,9387,163,6759,957,086




34

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
8. Property and Equipment, Continued
(In thousands of won)
 
2023
 
 

Computer and other equipment
Furniture
and fixture

Constru-ction in progress

Vehicles

Leasehold
Improve-ments

Right-of-use assets
Total
Beginning balance W1,113,069338,061-3,603726,9885,958,4088,140,129
Rent Adjustment
----260,698

260,698
Acquisitions/Capital expenditure
  1,065,137104,8511,209,024-82,2154,443,0476,904,274
Depreciation  (656,408)(177,186)-(2,275)(299,836)(4,116,479)(5,252,184)
Disposition/Disposals/
Removals
  (43)(729)----(772)
Substitution(875)875-----
Foreign exchange differences
  15,222652--7,60575,12698,605
Ending balance W1,536,102266,5241,209,0241,328516,9726,620,80010,150,750
(3) Classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)
2024

2023
Cost of revenuesW1,749,8671,853,122
Selling, general and administrative expenses(*)

4,272,9803,399,062
W6,022,8475,252,184
(*) The deprecation expenses recognized as the research and development included in selling, general and administrative expenses was W33,388 thousand and W 30,500 thousand, respectively, for the years ended December 31, 2024 and 2023.
(4) As of December 31, 2024 and 2023, there are no property and equipment that are pledged as collateral for the Group’s debts.

9. Intangible Assets
(1) Details of intangible assets as of December 31, 2024 and 2023 are as follows:
(In thousands of won)
December 31, 2024
December 31, 2023

Acquisition cost
Accumulated amortization(*)

Carrying
amount

Acquisition
cost

Accumulated amortization(*)
Carrying
amount
SoftwareW16,535,808(14,751,681)1,784,12717,567,637(14,786,707)

2,780,930
Patents1,745,310(863,134)882,1761,375,923(751,056)624,867
Other intangible assets
10,196,274(5,806,029)4,390,2459,877,474(6,913,312)2,964,162
W
28,477,392(21,420,844)7,056,54828,821,034(22,451,075)6,369,959

(*) Accumulated amortization includes the amount of accumulated impairment loss.

35

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
9. Intangible Assets, Continued
(2) Changes in intangible assets for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)
2024
SoftwarePatentsOther intangible assetsTotal
Beginning balance

W
2,780,930

624,867

2,964,162

6,369,959
Acquisitions/Capital expenditure


378,818

369,387

3,758,303

4,506,508
Amortization


(1,381,774)

(112,078)

(1,717,116)

(3,210,968)
Disposals


-

-

(2,839)

(2,839)
Impairment(*)


-

-

(614,741)

(614,741)
Foreign exchange differences


6,153

-

2,476

8,629
Ending balance

W
1,784,127

882,176

4,390,245

7,056,548

(*) The Group recognized W614,741 thousand of impairment loss as carrying amount of the other intangible assets exceeded recoverable amount as of December 31, 2024.
(In thousands of won)
2023
SoftwarePatentsOther intangible assetsTotal
Beginning balance
W1,939,050544,2721,386,1563,869,478
Acquisitions/Capital expenditure
2,136,072170,1034,149,1536,455,328
Amortization
(1,296,047)(83,326)(1,026,289)(2,405,662)
Disposals
-(6,182)(11,745)(17,927)
Impairment(*)
--(1,531,081)(1,531,081)
Foreign exchange differences
1,855-(2,032)(177)
Ending balance
W2,780,930624,8672,964,1626,369,959

(*) The Group recognized W1,531,081 thousand of impairment loss as carrying amount of the other intangible assets exceeded recoverable amount as of December 31, 2023.
(3) Classification of amortization in the statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023
Cost of revenues
W
935,620708,379
Selling, general and administrative expenses(*)2,275,3481,697,283
W
3,210,9682,405,662
(*) The amortization recognized as the research and development included in selling, general and administrative expenses was W528,382 thousand and W356,841 thousand, respectively, for the years ended December 31, 2024 and 2023.

36

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
10. Other non-current assets
(In thousands of won)December 31, 2024

December 31, 2023
Prepaid Expenses(*) 
W
         8,131,937 6,308,818
Others            319,506 675,979
W
         8,451,443 6,984,797
(*) Prepaid Expenses consist of the minimum guaranteed royalty paid to third parties.

11. Employee Benefit
The expenses recognized in relation to defined contribution plan for the years ended December 31, 2024 and 2023 are W2,654,583 thousand and W2,413,403 thousand, respectively. In addition, expenses related to defined benefit plans amounting to W74,121 thousand are included in other non-current liabilities as of December 31, 2024.

12. Commitments

(1) The Group has entered into license agreements with various third-party game developers to secure exclusive right to publish the games developed by the third-party developers. Upfront license fees paid are capitalized and recognized as other intangible assets and minimum guaranteed royalties are capitalized and recognized as other non-current assets. Purchase obligations for future acquisition related to above agreements which were not recognized as liabilities as of December 31, 2024 and 2023 are W 4,835,726 thousand and W4,941,782 thousand, respectively.
(2) As of December 31, 2024, the Group benefited from payment guarantee of USD 244,500 from KB Kookmin Bank regarding overseas IP contracts.
(3) As of December 31, 2024, the Group benefited from payment guarantee of W518,243 thousand from Seoul Guarantee Insurance Co., Ltd.




37

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
13. Share Capital and Capital Surplus
(1) Details of common shares as of December 31, 2024 and 2023 are as follows:
(In won and in number of shares)December 31, 2024

December 31, 2023

Number of authorized shares 40,000,00040,000,000
Value per shareW500500
Number of shares issued 6,948,9006,948,900
Common shares
W
3,474,450,000 3,474,450,000

(2) Details of capital surplus as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023

Additional paid-in capital
W
25,292,211
25,292,211
Other capital surplus 1,687,1501,806,053
W
26,979,361 
27,098,264
(3) Details of other components of equity as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023

Foreign currency translation adjustments
W23,784,6314,016,614
Re-measurements of defined benefit liability
15,920
(79)
W23,800,5514,016,535

(4) Details of retained earnings as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023

Unappropriated retained earningsW513,417,859428,498,582

(5) According to the Parent Company's Articles of Incorporation, the Parent Company may issue 2,000,000 shares of preferred stock without voting rights, and there are no preferred shares issued as of December 31, 2024.

38

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
14. Revenue from Contracts with Customers
(1) Details of revenue from contracts with customers based on the service contract type and the timing of satisfaction of performance obligations are as follows:
(In thousands of won)2024
2023

Service contract

 Micro-transaction and subscription revenueW409,950,571

639,231,190
  - Online Game61,425,023

70,566,135
  - Mobile Game348,525,548

568,665,055
 Royalties and license fees72,714,536

71,390,256
  - Online Game15,564,108

10,451,227
  - Mobile Game57,150,428

60,939,029
 Others revenue18,180,013

14,894,489
W500,845,120

725,515,935
Timing of satisfaction of performance obligations

 At a point in time111,219

119,329
Over time
500,733,901

725,396,606
W
500,845,120
 
725,515,935
(2) Accounts receivables, incremental costs of obtaining a contract and contract liabilities related to contracts with customers as of December 31, 2024 and December 31, 2023 are as follows:
(In thousands of won)
December 31, 2024December 31, 2023

Accounts receivable
W
81,152,458

71,212,897
Incremental costs of obtaining a contract (Prepaid expenses)2,385,905

1,556,590
Contact liabilities (Deferred revenue)

29,332,594

19,874,620
Micro-transaction and subscription revenue
25,290,276

17,158,516
Royalties and license fees
4,037,318

2,426,104
Others revenue
5,000

290,000

(3) The amount of revenue recognized from previous period’s contract liabilities satisfied during the year ended December 31, 2024 and 2023 are Won 17,158,516 thousand and Won 16,787,724 thousand in Micro-transaction revenue; Won 641,255 thousand and Won 70,596 thousand in Royalties and license fees and Won 290,000 thousand and Won 1,684,717 thousand in Website and application development, respectively.

39

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
14. Revenue from Contracts with Customers, Continued
(4) Transaction price allocated to unsatisfied performance obligations as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023
Micro transaction and subscription revenue
W
25,290,276
17,158,516
  - Online Game
10,822,217
10,216,116
  - Mobile Game
14,468,059
6,942,400
Royalties and license fees
4,037,318
2,426,104
  - Online Game
448,348
163,836
  - Mobile Game
3,588,970
2,262,268
Others revenue
5,000
 290,000
W
29,332,594
19,874,620

The Group’s management expects to recognize 91.2% (W26,760,732 thousand) of the transaction price allocated to contracts that have not been performed as of December 31, 2024 as revenue within 12 months. The remaining 8.8% (W2,571,862 thousand) is expected to be recognized as revenue thereafter. The amounts disclosed above do not include variable consideration which is constrained.
(5) Details of incremental costs of obtaining a contract recognized as assets as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023
Incremental costs of obtaining a contract recognized as at the reporting period-end
W2,385,9051,556,590
Incremental costs of obtaining a contract recognized as cost of revenues

1,556,5901,722,257


40

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
15. Classification of expenses by nature
Details of classification of expenses by nature for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Fees and commissionsW293,302,275472,324,331
Bad debt expenses588,818
1,401,847
Advertising expenses38,731,09413,661,333
Salaries50,091,76444,338,978
Outsourcing expenses9,214,74013,052,904
Rent1,379,9871,291,900
Employee benefits4,538,2134,256,315
Post-employment benefits3,021,6592,504,956
Depreciation6,022,8475,252,184
Amortization3,210,9682,405,662
Others4,554,0654,020,319
W
414,656,430 564,510,729

Total expenses consist of cost of sales, selling, general and administrative expenses.

16. Selling, General and Administrative Expenses
Details of the selling, general and administrative expenses for the years ended December 31, 2024 and 2023 are as follows:

(In thousands of won)2024

2023
Fees and commissionsW14,613,15616,662,242
Bad debt expenses588,8181,401,847
Advertising expenses38,731,09413,661,333
Salaries22,990,99520,687,935
Outsourcing expenses1,952,6202,085,094
Rent773,168712,342
Employee benefits2,384,5072,256,402
Post-employment benefits1,180,912991,422
Depreciation4,239,5923,368,562
Amortization1,746,9661,340,442
Research and development15,262,00013,486,401
Others3,289,5362,898,374
W
107,753,364 79,552,396


41

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
17. Finance Income and Costs
(1) Details of finance income for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Finance income
Interest income
W17,058,77611,492,379
Unrealized foreign currency gain
3,579,3141,416,446
Gain on foreign currency transactions
10,250,89910,357,703

W
30,888,989 23,266,528

(2) Details of finance costs for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Finance costs
Interest expense
W135,377161,809
Unrealized foreign currency loss
2,025,9021,594,709
Loss on foreign currency transactions
7,764,39113,178,209

W
9,925,670 14,934,727

18. Other Non-Operating Income and Expenses
(1) Details of other non-operating income for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Gain on disposal of property and equipmentW
8,085
20,302
Miscellaneous gain780,813893,057
W
788,898 913,359
(2) Details of other non-operating expenses for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Loss on disposal of property and equipmentW6,11243
Loss on disposal of intangible assets-6,182
Impairment loss on intangible assets614,7411,531,081
Impairment loss on other non-current assets
962,025-
Miscellaneous loss10,995
14,451
W1,593,873 1,551,757


42

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
19. Income tax expense
(1) Details of income tax expense for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Current tax expense
Current year
W22,198,76137,458,597
Deferred tax expense
Changes in net deferred tax assets(753,935)(742,049)
Income tax expense
W
21,444,826 36,716,548
(2) The differences between the tax expense on the Group’s profit before tax and the amount that would arise using the statutory tax rates applicable to profits of the entities are as follows:
(In thousands of won)2024

2023

Profit before income tax expenseW106,347,034168,698,609
Income tax using the statutory tax rate of each country19,749,419
31,300,275
Adjustments:
Expenses not deductible for tax purposes
481,3708,693
Non taxable income
(349,774)(130,680)
Foreign tax payment
6,321,9178,615,012
Utilization of previously unrecognized tax losses
(298,451)(713,801)
Tax credit
(1,413,463)(1,174,258)
Corporate tax on unappropriated earnings
94,943(133,923)
Changes in deferred tax liabilities related to investment in subsidiaries
(1,058,223)(421,511)
Others
(2,082,912)(633,259)
Total Adjustment
1,695,407
5,416,273
Income tax expenseW21,444,826 36,716,548
Effective tax rate20%22%


43

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
19. Income tax expense, Continued
(3) Details of the changes in deferred tax assets (liabilities) for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)
20242023

Beginning
balance
Increase
(Decrease)

Ending
balance

Beginning
balance
Increase
(Decrease)

Ending
balance
Property and equipment
W
51,166

126,158

177,324

38,494

12,672

51,166
Intangible assets

665,063

(582,489)

82,574

441,669

223,394

665,063
Other non-current assets

24,999

(10,903)

14,096

201,984

(176,985)

24,999
Accounts Payable

1,518,055

251,730

1,769,785

1,700,733

(182,678)

1,518,055
Accrued expenses

282,091

29,494

311,585

232,938

49,153

282,091
Deferred revenue

355,434

(272,861)

82,573

93,580

261,854

355,434
Allowance for doubtful account
1,178,980

(1,121,944)

57,036

299,028

879,952

1,178,980
Other non-current liabilities
81,970

(4,157)

77,813

80,768

1,202

81,970
Lease

(38,046)

21,973

(16,073)

(29,886)

(8,160)

(38,046)
Investment in subsidiaries

(2,368,565)

1,170,180

(1,198,385)

(2,791,379)

422,814

(2,368,565)
Others

881,670

(1,142,955)

(261,285)

(277,902)

1,159,572

881,670
Subtotal

2,632,817

(1,535,774)

1,097,043

(9,973)

2,642,790

2,632,817
Deferred tax due to carry-forward losses

701,138

447,921

1,149,059

758,972

(57,834)

701,138
Deferred tax due to tax credit carry-forward

235,916

1,841,789

2,077,705

2,078,824

(1,842,908)

235,916
Deferred tax assets(*)
W
5,952,133

(334,645)

5,617,488

5,659,521

292,612

5,952,133
Deferred tax liabilities

(2,382,262)

1,088,581

(1,293,681)

(2,831,698)

449,436

(2,382,262)

(*) The future realizability of deferred tax assets is assessed by taking into consideration various factors such as each subsidiaries’ performance, the overall economic environment and industry outlook, expected future earnings, and deductible period of tax credit carry-forward and carry-forward losses. The Group periodically reviews these matters, and has recognized deferred tax assets related to temporary differences, carry-forward losses, based on the likelihood of each subsidiary’s future taxable income as at December 31, 2024. This amount may change if the estimate for future taxable income changes.

(4) Details of unused tax loss carryforwards and unused tax credit carry-forwards that are not recognized as deferred income tax assets as of December 31, 2024 are as follows:
(In thousands of won)



Year of expirationUnused loss carryforwards

Unused tax credit carryforwards

2025W
1,421,329
147,837
2026
2,002,452
175,371
2027
352,039
162,959
2028
2,134,171
520,368
2029
347,955
402,380
After 2029
9,571,043
986,497
TotalW
15,828,989
2,395,412


44

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
19. Income tax expense, Continued
(5)As of December 31, 2024 and 2023, the Group did not recognize deferred income tax assets relating to investments in subsidiaries for the temporary difference of W22,504,425 thousand and W23,086,691 thousand as it is not probable such temporary differences can be utilized in the foreseeable future.

(6)The gross balances of deferred tax assets and liabilities for the years ended December 31, 2024 and 2023, is as follows:

(In thousands of won)


2024

2023
Deferred tax assets





  - Deferred tax assets to be recovered after more than 12 months

W
2,783,985

1,601,321
- Deferred tax assets to be recovered within 12 months


5,725,147

5,800,980
Sub-total


8,509,132

7,402,301
Deferred tax liabilities


 

 
  - Deferred tax liabilities to be recovered after more than 12 months


(1,018,806)

(14,851)
- Deferred tax liabilities to be recovered within 12 months


(3,166,519)

(3,817,579)
Sub-total


(4,185,325)

(3,832,430)
Deferred tax assets (liabilities), net

W
4,323,807

3,569,871
(7) The impact of the global minimum tax
The Group is required to pay an additional tax amount on the difference between the GloBE effective tax rate of each subsidiary's jurisdiction and the minimum tax rate of 15%, in accordance with the Pillar 2 legislation. All entities within the Group have an effective tax rate that exceeds 15%, except for Gravity Game Vision Limited that operates in Hong Kong. As a result, the Pillar 2 income tax expense recognized during the year ended December 31, 2024 is Won 457,431 thousand, and exceptions have been applied regarding the recognition and disclosure of related deferred tax assets and liabilities.


45

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
20. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average number of common shares outstanding each year.
(1) Basic earnings per share
(In thousands won and in number of shares)2024

2023

Profit attributable to owners of the ParentW84,919,277132,019,054
Weighted average outstanding shares of common shares6,948,9006,948,900
Basic earnings per share(in won)
W
12,221 18,999
(2) Diluted earnings per share
As of and for the years ended December 31, 2024 and 2023, the Parent Company does not have outstanding dilutive potential ordinary shares. Accordingly, the diluted earnings per share for the years ended December 31, 2024 and 2023 are the same as the basic earnings per share.

21. Cash flow information
(1) Adjustments for calculating cash generated from operations for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Adjustments for: 
Depreciation
W6,022,8475,252,184
Amortization
3,210,9682,405,662
Bad debt expense
588,8181,401,847
Unrealized foreign currency loss
2,025,9021,594,709
Interest expense
135,377161,809
Loss on disposal of property and equipment
6,11243
Loss on disposal of intangible assets
- 6,182
Impairment loss on intangible asset
614,7411,531,081
Impairment loss on other non-current assets
962,025-
Retirement benefit expenses
127,55423,794
Income tax expense
21,444,82636,716,548
Unrealized foreign currency gain
(3,579,314)(1,416,446)
Gain on disposal of property and equipment
(8,085)(20,302)
Interest income
(17,058,776)(11,492,379)
W14,492,995 36,164,732


46

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
21. Cash flow information, Continued
(2) Changes in assets and liabilities arising from operating activities for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)20242023
Accounts receivableW(1,886,253)2,364,501
Other receivables2,747,905 (3,769,670)
Prepaid expenses(4,492,818)397,165
Other current assets(123,527)(602,462)
Other non-current assets(2,318,065)(3,485,716)
Accounts payable(2,879,054)(13,837,113)
Deferred revenue5,983,805 (1,292,227)
Withholding(1,546,052)(97,425)
Accrued expenses225,700 254,830
Accrued income-(93,841)
Long-term deferred revenue467,191 2,246,897
W(3,821,168)(17,915,061)

(3) Significant non-cash transactions for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023
Reclassification of prepayment to intangible assetsW212,220101,846
Increase in accounts payable relating to the acquisition of software
292,4802,032,560
Increase in accounts payable relating to the acquisition of other intangible assets2,556,9791,147,427
Reclassification of other non-current financial assets to other non-current assets
-1,030,000
Acquisition of right-of-use assets4,912,5144,703,745



47

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
21. Cash flow information, Continued
(4) Changes in liabilities arising from financing activities for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)

2024

2023

Beginning of the yearW6,562,398 5,963,185
Cash flows used in financial activities – payment of lease liabilities(4,525,288)(4,083,272)
Cash flows used in operating activities – Interest paid(130,027)(156,631)
Non-cash transactions: 
Acquisitions – leases
4,912,514 4,357,828
Interest expense
130,027 156,631
Others
(17,059)260,300
Translation difference188,95864,357
Ending of the year 
W
7,121,523 6,562,398

22. Leases
The Group leases offices, vehicles and others. The leases typically run for a period of 1~ 5 years with an option to renew or terminate the lease after that date. There are no restrictions or covenants imposed to leases, but the lease assets are not provided as collateral for borrowings.
(1) Details of right-of-use assets and lease liabilities recognized in the consolidated statements of financial position as of December 31, 2024 and 2023 are as follows:
(In thousands of won)

December 31, 2024

December 31, 2023

Right-of-use assets(*1) 
OfficesW            6,250,151 4,720,419
Vehicles              121,449 367,030
Others              792,075 1,533,351
W            7,163,675 6,620,800
Lease liabilities(*2)
Current
            3,179,423
4,225,209
Non-current
            3,942,100
2,337,189
 W
            7,121,523
6,562,398

(*1) Right-of-use assets are included in the 'Property and equipment' in the consolidated statement of financial position.
(*2) Lease liabilities are included in the 'Other current liabilities' and 'Other non-current liabilities' in the consolidated statement of financial position.

48

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
22. Leases, Continued
(2) Changes in right-of-use assets for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)
2024


Offices

Vehicles


Others

Total
Balance as of January 1, 2024

W
4,720,419


367,030


1,533,351


6,620,800
Depreciation


(3,209,666)


(245,581)


(1,097,704)


(4,552,951)
Reassessment


7,470


-


123,661


131,131
Acquisitions


4,574,637


-


206,746


4,781,383
Translation difference


157,291


-


26,021


183,312
Balance as of December 31, 2024

W
6,250,151


121,449


792,075


7,163,675

(In thousands of won)
2023


Offices

Vehicles


Others

Total
Balance as of January 1, 2023

W
5,066,896


64,692


826,820


5,958,408
Depreciation


(2,793,560)


(239,457)


(1,083,462)


(4,116,479)
Reassessment


210,139


51,886


(1,327)


260,698
Acquisitions


2,177,909


489,821


1,775,317


4,443,047
Translation difference


59,035


88


16,003


75,126
Balance as of December 31, 2023

W
4,720,419


367,030


1,533,351


6,620,800

(3) Details of amounts recognized in the consolidated statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Interest expense relating to lease liabilities (included in finance cost)W130,027156,631
Expense relating to short-term leases50,46030,015
Expense relating to leases of low-value assets excluding short-term leases47,08222,258
(4) Details of amounts recognized in the consolidated statement of cash flows for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)

2024

2023

Total cash outflows of leasesW4,752,8574,292,176



49

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
23. Financial Risk Management
The Group’s operating activities expose itself to a variety of financial risks: market risk, credit risk and liquidity risk from which the Group’s risk management program focuses on minimizing any adverse effects on its financial performance. The Group operates financial risk management policies and programs that closely monitor and respond to each risk factor.
(1) Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so the Group can continue to provide returns and benefits for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group monitors capital on the basis of the debt ratio. This ratio is calculated as total debt divided by total capital. The debt ratios as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023

Total Liabilities
W
118,095,483114,452,759
Total Equity568,363,459463,727,962
Debt ratio21%25%
(2) Market Risk
(a) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from royalty revenues and commission payment primarily with respect to the US dollar and etc. The Group’s financial assets and liabilities are exposed to foreign currency risk as of December 31, 2024 and 2023 are as follows:
(In thousands of won, in foreign currencies)

December 31, 2024


Assets in foreign
currency

Liabilities in foreign currency


Assets in
Korean Won

Liabilities in Korean Won
USD


70,136,599


29,286,354


103,021,478


43,009,052
JPY


496,929,791


56,100,772


4,653,649


525,373
EUR


27,925


32,910


42,689


50,310
IDR


9,851,056


522,083,448


897


47,558
THB


21,131


-


909


-
VND


6,026,400


-


348


-
HKD


141,271


-


26,727


-


W
107,746,697


43,632,293


50

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
23. Financial Risk Management, Continued
(2) Market Risk, Continued
(a) Foreign exchange risk, Continued
(In thousands of won, in foreign currencies)

December 31, 2023


Assets in foreign
currency

Liabilities in foreign currency


Assets in
Korean Won

Liabilities in Korean Won
USD


86,681,440


28,203,218


111,615,501


36,344,262
JPY


343,984,702


160,779,008


3,139,411


1,467,366
EUR


36,780


30,472


52,470


43,471
IDR


12,955,000


3,103,944


1,083


259
THB


28,510


7,379


1,073


278
VND


9,270,000


3,243,600


493


173
HKD


144,997


-


23,916


-


W
114,833,947


37,855,809

The Group measures foreign exchange risk at the exchange rate of 10% for each foreign currency, and the rate of change reflects the management's assessment of the risk of exchange rate fluctuation that can be reasonably experienced. The effects of changes in foreign currency exchange rate on profit before income tax for the years ended of December 31, 2024 and 2023 are as follows:
(In thousands of won)

2024

2023


Increased by 10%

Decreased by 10%

Increased by 10%

Decreased by 10%
USD

W
6,001,243


(6,001,243)

7,527,124


(7,527,124)
JPY


412,828


(412,828)

167,205


(167,205)
Others


(2,630)


2,630

3,485


(3,485)


W
6,411,441


(6,411,441)

7,697,814


(7,697,814)

The sensitivity analysis is based on monetary assets and liabilities denominated in foreign currencies other than the functional currency at the end of the reporting period.
(b) Interest rate risk
There are no borrowings under variable interest rate conditions as of December 31, 2024 and 2023.
(c) Price risk
There are no assets and liabilities exposed to price risk as of December 31, 2024 and 2023.

51

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
23. Financial Risk Management, Continued
(3) Credit Risk
Credit risk arises from normal trading and investing activities and occurs when a customer or a counterparty fails to comply with the terms of the contract. In order to manage these credit risks, the Group regularly evaluates the creditworthiness of customers based on their financial condition, past experiences and other factors.
The carrying amounts of financial assets represent their maximum exposure to credit risk. The maximum exposure to credit risk of the Group as of December 31, 2024 and 2023 are as follows:
(In thousands of won)December 31, 2024

December 31, 2023

Cash and cash equivalents
W
228,898,026 184,081,815
Short-term financial instruments324,304,040 277,215,000
Accounts receivable, net81,152,458 71,212,897
Other receivables, net15,557 7,499
Other current financial assets6,601,519 4,438,717
Oher non-current financial assets1,766,588 1,824,076
W
642,738,188 538,780,004

Cash and cash equivalents and short-term financial instruments are deposited in financial institutions with strong credit ratings. Accounts receivable is mainly due from payment processing companies and platform service providers, which the Group believes have low levels of credit risk.
(4) Liquidity Risk
Liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funds from appropriately committed credit lines, and the ability to settle market positions. The cash flows included in the maturity classification, based on the remaining period to the contractual maturity date, are undiscounted expected cash outflows. The amount due within 12 months is the same as the carrying amount since the effect of the discount is not material. The following table summarizes the financial liabilities of the Group by maturity according to the remaining period from the end of the reporting period to the contractual maturity date.
(In thousands of won)December 31, 2024
Carrying
value

Less than
3 months


3 months to 1 year


1 to 2 years


2 to 4 years


Total
Accounts payable
W
63,548,026


63,152,918


175,000


220,108


-


63,548,026
Accrued expense

312,563


312,563


-


-


-


312,563
Other liabilities (*)

7,121,523


1,045,979


2,303,030


1,849,686


2,249,389


7,448,084
W
70,982,112


64,511,460


2,478,030


2,069,794


2,249,389


71,308,673

(*) Other liabilities as of December 31, 2024 consist of lease liabilities.

52

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
23. Financial Risk Management, Continued
(4) Liquidity Risk, Continued

(In thousands of won)December 31, 2023
Carrying
value

Less than
3 months


3 months to 1 year


1 to 2 years


2 to 4 years


Total
Accounts payable
W
58,292,099


57,429,579


185,000


677,520


-


58,292,099
Accrued expense

395,264


395,264


-


-


-


395,264
Other liabilities (*)

6,562,398


1,081,291


3,258,890


1,902,024


475,402


6,717,607
W
65,249,761


58,906,134


3,443,890


2,579,544


475,402


65,404,970

(*) Other liabilities as of December 31, 2023 consist of lease liabilities.

24. Segment information
(1) Operating segments
The Group determines its operating segments by establishing strategic decisions. Chief operating decision maker (“CODM”) reviews operating profit by each segment in order to make decisions regarding the resources to be allocated to the segment and to evaluate the performance of the segment.
The reportable segments of the Group are in line with the organizational structure and the review of operations by the CEO, who is the Chief operating decision maker, and they include mobile, online, and others.
The Group assesses the performance of its operating segments based on its operating profit or loss, which does not differ from operating profit reported on the consolidated statement of comprehensive income except for inter-segment transactions. The segment information for the years ended December 31, 2024 and 2023 are as follows.
(In thousands of won)2024
Online

Mobile


Others


Total

Inter-segment
eliminations(*)
Total
Revenue
W
90,831,926465,026,162
23,962,894
579,820,982
-


Intersegment Revenue

13,842,795
59,350,186
5,782,881
78,975,862
(78,975,862)

-
External Revenue

76,989,131
405,675,976
18,180,013
500,845,120
-

500,845,120
Depreciation/
amortization

1,725,3852,699,388
4,809,042
9,233,815
-

9,233,815
Operating profit

34,413,873
52,466,708
(633,436)
86,247,145
(58,455)

86,188,690

(*) The Group reflects inter-segment eliminations as adjustments.

53

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
24. Segment information, Continued
(1) Operating segments, Continued
Other profit or loss items that do not constitute operating profit (loss) are not separately disclosed as they are not reviewed by the chief operating decision maker by operating segment.
(In thousands of won)2023
Online

Mobile


Others


Total

Inter-segment
eliminations(*)
Total
Revenue
W
96,487,574697,735,65421,148,756815,371,984

Intersegment Revenue

15,470,21268,131,5706,254,26789,856,049
(89,856,049)

-
External Revenue

81,017,362629,604,08414,894,489725,515,935-

725,515,935
Depreciation/
amortization

1,436,0682,157,7224,064,0567,657,846-

7,657,846
Operating profit

42,727,438120,233,338(1,941,734)161,019,042(13,836)

161,005,206

(*) The Group reflects inter-segment eliminations as adjustments.
Other profit or loss items that do not constitute operating profit (loss) are not separately disclosed as they are not reviewed by the chief operating decision maker by operating segment.

(2) Revenue from external customers by country for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)
2024(*)

2023(*)

KoreaW53,142,360 86,058,286
Taiwan114,409,543 176,070,633
Japan18,856,828 18,999,243
United States of America34,652,880 22,701,897
Thailand61,781,458 136,874,077
Philippines58,926,548 102,594,825
Indonesia32,373,482 58,762,576
Hong Kong
17,255,442 22,655,848
Malaysia26,360,680 58,552,957
Brazil26,433,674 5,264,204
Other56,652,225 36,981,389
W500,845,120  725,515,935

(*) Revenue was attributed to the country based on the customer’s location.


54

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
24. Segment information, Continued
(3) Non-current assets by geographical regions as of December 31, 2024 and 2023 are as follows:
(In thousands of won)
December 31, 2024(*)

December 31, 2023(*)

KoreaW18,990,332 15,487,818
Overseas6,474,745 8,017,686
TotalW25,465,077  23,505,504

(*) The amounts are exclusive of financial assets and deferred tax assets.
(4) There was no customer who represents more than 10% revenue in mobile segment for the year ended December 31, 2023 and December 31, 2024

25. Related Party Transactions
(1) Related parties of the Group include entities and individuals capable of exercising control or significant influence over the Group. Related parties include Gung Ho Online Entertainment, Inc. (the controlling shareholder with 59.31% common shares), its subsidiaries, management and their immediate families.
(2) Account balances with related party
Balances of receivables and payables with related party as of December 31, 2024 and 2023 are as follows:
(In thousands of won)

December 31, 2024

December 31, 2023
Related party

Name of entity

Receivables

Payables

Receivables

Payables
Parent Company
GungHo Online Entertainment, Inc.

W
3,333,489


2,755

1,971,637


2,685
Other
Gungho Online Entertainment America


573


97,210

-


1,380

Total

W
3,334,062


99,965

1,971,637


4,065


55

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
25. Related Party Transactions, Continued
(3) Transactions with related parties
The details of transactions with related party for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)


2024





Revenues


Related party

Name of entity


Royalty



Commission

Other


Parent company

GungHo Online Entertainment, Inc.

W
16,550,535



682,115

-


Other

GungHo Online Entertainment America


559



-

-



W
16,551,094



682,115

-
 


(In thousands of won)


2024





Purchases
Related party

Name of entity


Royalty



Commission

Other
Parent company

GungHo Online Entertainment, Inc.

W
-
-

-
-

15,946
Other

GungHo Online Entertainment America


92,326



-

92,332

W
92,326



-

108,278

(In thousands of won)


2023





Revenues


Related party

Name of entity


Royalty



Commission

Other


Parent company

GungHo Online Entertainment, Inc.

W
17,681,836



735,281

-


Other

GungHo Online Entertainment America


-



-

-



W
17,681,836



735,281

-
 


(In thousands of won)


2023





Purchases
Related party

Name of entity


Royalty



Commission

Other
Parent company

GungHo Online Entertainment, Inc.

W
-



-

15,379
Other

GungHo Online Entertainment America


54,884



-

-

W
54,884



-

15,379


56

GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2024 and 2023
25. Related Party Transactions, Continued
(4) Other transactions with related parties
No financing transactions were made with related parties for the years ended December 31, 2024 and 2023.
(5) Key management personnel compensation
The compensation given to key management personnel (registered directors) for the years ended December 31, 2024 and 2023 are as follows:
(In thousands of won)2024

2023

Salaries
W
2,264,1131,734,463

26. Subsequent Event
Gravity Game Unite SDN. BHD, a 100%-owned subsidiary was established in Malaysia on March 12, 2025.
57