Chapter I General Principles |
| Article 1 | These Regulations are prescribed in accordance with paragraph 2 of Article 14 of the Securities and Exchange Act.
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| Article 2 | The financial reports of a public bank (hereinafter, "Bank") shall be prepared in accordance with these Regulations. Matters not provided for herein shall be handled in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and generally accepted accounting principles promulgated by the Financial Accounting Standards Committee of the Accounting Research and Development Foundation of the Republic of China. A Bank shall handle its accounting affairs, upon which the preparation of its financial reports is based, in accordance with the Business Accounting Act and other applicable acts and regulations.
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| Article 3 | A Bank shall establish its accounting system based on the nature of its accounting affairs, the actual status and development of its business, and its management needs in preparation for possible audit. The content of the accounting system referred to in the preceding paragraph shall, according to the nature of the business operations, include a general description, account titles, accounting documents, account books, accounting statements, guidelines and procedures for handling accounting affairs, internal accounting controls, administration of accounting affairs, and handling of computerized accounting affairs, etc.
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| Article 4 | "Financial report" shall mean financial statements, list of major account titles, and other disclosures or explanations under these Regulations to help the users make decisions. A financial statement shall include a balance sheet, income statement, statement of changes in shareholders' equity, cash flow statement, and the footnotes thereto. A Bank, unless newly established, shall prepare the major statements and footnotes thereto referred to in the preceding paragraph by comparing two consecutive periods, and the responsible person, manager, and handling accountant shall sign or seal each page of the statements.
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| Article 5 | The content of a financial report shall fairly present the financial position, operating results, and cash flows of a Bank without misleading any interested party in making judgments and decisions. If a financial report is in violation of these Regulations or any other relevant provisions, upon being notified by the competent authority after auditing to make adjustments, the Bank shall make adjustments and corrections. If the adjusted amount reaches a level set by the competent authority, a corrected financial report shall be re-announced, and at the time of re-announcement shall specify the reasons, items, and amount of the adjustment as notified by the competent authority.
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| Article 6 | In order to thoroughly disclose the information on the financial condition, operating results, and cash flows, the financial reports shall provide notes and explanations on the matters specified below:
- Historical changes and development of the Bank and its business scope;
- A declaration that the financial statements were prepared in conformance with these Regulations and other applicable acts and regulations (the titles of the acts or regulations shall be expressly stated) and generally accepted accounting principles;
- Summary of significant accounting policies and the basis on which they are judged;
- Where for some special reason the accounting treatment changes, affecting the comparison of the financial information between the two successive periods, the reason for the change and its effect on the financial statements shall be explained;
- If there is a need to note the estimation and valuation basis of any amount in the financial report, it shall be noted.
- If any account title contained in the financial report is restricted by any act or regulation, contract, or otherwise, the circumstances, time limit and relevant matters shall be stated;
- Significant commitments and contingent liabilities (including off-balance sheet items);
- Information relevant to financial products (including derivatives);
- Management policies and practices in relation to various risks such as credit, market, liquidity, and operational and legal risks, and exposure to major risks. The following information shall be disclosed under its respective risk category:
- Loan asset quality (Form A), lending risk concentration (Form B), losses on loans and advances and policies on reserves and provisions for losses on loans (credit risk);
- Information on significant concentration of risks in relation to assets, liabilities and off-balance sheet items (credit risk);
- Averages of interest assets and interest liabilities and average interest rate during the current period (market risk);
- Interest rate sensitivity information (market risk) (Form C);
- Net positions in major foreign currencies (market risk);
- Profitability and maturity analysis of assets and liabilities (liquidity risk) (Forms D and E);
- Special matters (operational and legal risks) (Form F);
- Capital adequacy (Form G);
- Information on asset securitization;
- Trust business activities carried out under the Trust Enterprise Act and the dollar amount;
- Policies on reserves and provisions for losses;
- Issuance of financial bonds;
- Change in capital structure;
- Assets provided as collateral;
- Addition, expansion, construction, lease, obsolescence, lying idle, sale, transfer or long-term rent of major assets;
- Major investments in other enterprises;
- Information on transactions with interested parties as a borrower, guarantor or collateral provider (Form H) as well as significant transactions with other related parties;
- Loss caused by major disasters;
- Progression or conclusion of material litigation;
- Signing, completion, cancellation, or voidance of material contracts;
- Information related to employee pension funds;
- Major organizational adjustments and significant reforms to management system;
- Material effects of changes in government acts and regulations;
- Segment financial information;
- Material effect of suspension of business;
- Transfer of the major part of business and assets/liabilities from or to another financial institution;
- Where the Bank is a subsidiary of a financial holding company, allocation of the revenue, cost, expense, and gain/loss incurred between it and the financial holding company or any other subsidiary in their business interchanges or transactions, joint business promotion, information sharing, and common use of business facilities or premises.
- Other disclosures necessary to avoid misleading users or to facilitate the fair presentation of the financial report.
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| Article 7 | Notes shall be provided with respect to any of the following subsequent events occurring from the balance sheet date to the financial report submission date:
- Change in capital structure;
- Long-term and short-term borrowings in substantial amounts (exclusive of short-term interbank borrowings and deposits from general customers);
- Addition, expansion, construction, lease, obsolescence, lying idle, sale, pledge, or transfer of major assets;
- Major investments in other enterprises;
- Loss caused by major disasters;
- Significant asset deterioration and loan write-offs;
- Progression or conclusion of material litigations;
- Signing, completion, cancellation, or voidance of material contracts;
- Major organizational adjustments and significant reformation of management system;
- Material effects of changes in government acts and regulations;
- Other significant events or measures capable of affecting the financial condition, operating results, or cash flows.
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