SEC provided auditors and public corporations with guidelines on recognition, expression and public announcement of revenue by presenting SAB 101 (Revenue Recognition in Financial Statements) in December 1999. FASB subscribed to such recognition of SEC as well, introducing EITF 99-17 (Accounting for Advertising Barter Transactions) and EITF 99-19 (Reporting Revenue Gross as a Principal versus Net as an Agent). EITF 99-17 and 99-19 dealt with revenue related issues from a perspective of the Internet companies, but the details mentioned by EIFT were prepared to provide all the companies with guidelines. Korea established the Item 4 of Corporation Accounting Standards that allowed department stores and general trading firms with a means of sales under the category of proxy relationship to appropriate commissions as the sales since December 31, 2002. Applying the Item 4 does not create any difference in the profit and loss while resulting in a significant decrease in published amount of sales. Department stores have administered the total amount of purchase at the time of purchasing goods from their suppliers and the total amount of sales at the time of selling the goods to the customers. In the standpoint of accounting standard establishing organization, regulations of consignment sales must be applied to the department stores since the supplier must continue to assume the risk bearing of inventory without reverting it to the department stores. Whether the department stores recognize specified purchase and sales as gross change or net change falling under revenue, there is no difference in net income. The department store industry in Korea, however, claimed that such regulations would create a significant gap from Japan. While adopting the specified purchase and sales method as Korea, Japan appropriates the total amount of sales. If the sales were to be recognized by net change, it would be difficult to show the financial status and operating outcome to the foreigners lacking of understanding of the unique characteristics of Korean department store industry according to them. Upon a series of exhausting discussions, the accounting standard establishing organization opened the door for department stores to recognize revenue with gross change if the industry and suppliers change their general practice of business transactions. This research focuses on firms, including department stores and general trading firms that are subject to the net method. First, we examine those firms that changed their revenue recognition standards from the gross method to the net method, and we consider how such a change has influenced the financial statements of those firms. Second, we investigate if there is any difference in reaction to sales revenue of firms in the capital market along with the changes in revenue recognition standards from the gross method to net method. As a result of positive analysis, sales revenue, according to the gross method prior to 2002 and before applying the net method, exhibited a positively (+) comparable relationship with the value of firms. However, since the application of the net method in 2003, such sales revenue has not displayed any relevant relationship with such value. Sales revenue based on the net methods in the fiscal year of 2003, the first year for which the net method was applied, showed a positively (+) comparable relationship with the value of firms, although the change in sales revenue exhibited an inversely proportional relationship to the value of firms. However,the sales revenue based on the net method and the change in sales revenue in the fiscal year of 2002 did not show any significant relationship with the value of firms. According to such results and upon verification,the market does not exhibit adhering phenomena on simple sales revenue information, but react to real information. The market, nevertheless, does not react to the sales revenue by dividing it into the net change sales revenue and simple total change sales revenue on its own before information on the net changes sales revenue is released in the market.