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Article 4
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The basis of preparing each accounting item of the Pro Forma Financial Statements of a transferee company of a demerger is as follows:
- Assets and liabilities items shall be incorporated if they are related to the transferee department's business and can be directly classified or individually identified.
- Pro forma capital of each year prior to the date fixed for the spin-off shall be retrospectively adjusted according to the capital on the record date for the spin-off, subject to the spin-off company's allotment of shares through capital increase of each year prior to the-spinoff.
- Other capital reserve and exchange differences resulting from translating the financial statements of a foreign operation shall be limited to those generated from the spin-off and transfer.
- Items of operating profit or loss shall only list transactions resulted from the transferee department's operating business and exclude items irrelevant to the operating business.
- Items of non-operating revenues and expenditures shall be individually identified based upon the transaction content; only items relating to the operating business of the transferee department shall be listed.
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