Chapter I General Provisions
|
| Article 1 | These Criteria are prescribed in accordance with Paragraph 2 of Article 14 of the Securities and Exchange Law and apply to company type stock exchanges. |
| Article 2 | The financial reports of a company type stock exchange shall be prepared in accordance with these Criteria and relevant laws and regulations. Matters not provided therein shall be handled in accordance with the generally accepted accounting principles promulgated by the Financial Accounting Standards Committee of the Accounting Research and Development Foundation of the Republic of China. |
| Article 3 | A company type stock exchange shall establish its accounting system based on the nature of its accounting affairs, actual status of business, and development and management needs and report the same to the Securities and Exchange Commission of the Ministry of Finance (the "SEC") for recordation.
The content of the accounting system referred to in the preceding paragraph shall, based on the nature of business operation, include a general description, chart of accounts, account titles and accounting documents, account books, accounting reports, procedures for handling accounting affairs, finance and payment/receipt operations, regulations for purchase management, etc.
Any revision of the content of the accounting system shall be reported to the SEC for recordation at the time when the annual financial report is filed.
If the accounts are handled by computer, a photocopy of approval letter from the tax collection agency and operation manual for handling accounting by computer shall be submitted to the SEC for recordation. |
| Article 4 | The appointment and discharge of the in-charge accountant of a company type stock exchange shall be approved by a majority of directors and reported to the SEC for recordation within five (5) days after appointment or discharge. |
| Article 5 | The fiscal year shall be calendar year. Closing for the first half of the year shall be made on June 30 and closing for the year shall be made on December 31.
The accounting basis shall be accrual system.
The bookkeeping unit shall be New Taiwan "Dollar". |
| Article 6 | The financial reports shall mean financial statements, list of significant account titles, and other disclosures and explanations under these Criteria which help the users make decision.
A financial statement shall include balance sheet, income statement, statement of changes in stockholders' equity, statement of cash flows, and footnotes or schedules.
The principal financial statements and their notes referred to in the preceding paragraph shall be prepared by comparing two consecutive periods, and the responsible person, in-charge and handling accountants shall sign or seal each page of such statements. |
| Article 7 | The content of a financial report shall fairly present the financial position, results of operation, and cash flows of the company without misleading an interested party in making judgment and decision.
If a financial report violates these Criteria or any other relevant regulations, upon the SEC's notice of adjustment after examination, adjustment and correction shall be made. If the adjusted amount attains the standard set by the SEC, a corrected financial report shall be prepared and submitted to the SEC, and a public announcement shall be made therefor. |
| Article 8 | In order that a financial report may thoroughly disclose the information of financial position, results of operations, and cash flows, notes to the following matters shall be provided:
1.Summary of significant accounting policies;
2.Where due to special reasons the accounting treatment changes thus affecting the comparison of the financial information of the prior or subsequent periods, the reason of change and the impact on the financial statements shall be explained.
3.If it is necessary to provide the valuation basis of any amount in the financial report, a note shall be made.
4.If any account contained in a financial report is restricted by laws and regulations, contract, or other limitations, the condition, time limit and relevant matters shall be stated.
5.Significant commitments and contingent liabilities;
6.Change of capital structure;
7.Long-term and short-term borrowings;
8.Addition, expansion, construction, lease, obsolescence, lying idle, sale, pledge, or transfer of major assets;
9.Major investment in other enterprises;
10. Significant transactions with related parties;
11. Loss caused by major disasters;
12. Processing or conclusion of material actions;
13. Signing, completion, cancellation, or voidance of material contracts;
14. Adjustment of important organization and significant reformation of management system;
15. Employees retirement plan and allocation and payment of pension;
16. Material impact of change of government laws and regulations;
17. Material impact of suspension of business;
18. Other necessary disclosures to ensure the financial statements are not misleading or to facilitate the fair presentation of the financial statements. |
| Article 9 | Notes shall be provided in the case of occurrence of the following matters during the period between closing date to the date on which the financial report is submitted:
1.Change of capital structure;
2.Long-term and short-term borrowings in substantial amounts;
3. Addition, expansion, construction, lease, obsolescence, lying idle, sale, pledge, or transfer of major assets;
4.Loss caused by major disasters;
5.Processing or conclusion of material actions;
6.Signing, completion, cancellation, or voidance of material contract;
7.Adjustment of important organization and significant reformation of management system;
8.Material impact of change of governmental laws and regulations;
9.Other significant events or measures which may affect the financial position, results of operations, or cash flows. |
Chapter II Financial Report
|
Section 1: Balance Sheet
|
| Article 10 | The asset account/classification in the balance sheet, content thereof, and matters to be noted are as follows:
1.Current assets: Cash, bank deposits, short-term investments, and other assets that is expected to be converted into cash, sold or consumed within one year;
(1)Cash: Cash in treasury, petty cash, and revolving fund. Those which have been earmarked or whose use is restricted shall not be classified as cash.
(2)Bank deposits: Time deposits, current deposits, etc. The non-current bank deposits shall be separately classified. If the maturity date is longer than one year, a note shall be made.
(3)Short-term investment: This includes the securities traded on the open market, convertible into cash at any time, and not aimed at controlling or maintaining business relation.
For the stock dividends acquired for holding securities or the stocks distributed due to capitalization of capital reserve, the increased number of shares shall be recorded by the type of securities, and the average unit cost of each share shall be calculated by weighted average method.
If the securities are pledged as collateral for a debt, and if the secured debt is a long-term liability, such securities shall be classified as long-term investment; if the secured debt is a current liability, such securities shall be classified as short-term investment, but a note shall be provided to explain the fact of security. Where the securities are provided as guarantee deposit-out, they shall be classified as other assets.
Allowance for loss of short-term investment due to price decline shall be recorded as a deduction of short-term investment.
(4)Notes receivable: All the short-term notes receivable incurred by the primary business fall within this category.
Discounted or transferred notes receivable shall be deducted and a note shall be provided.
Notes receivable resulting from operating activities shall be separately recorded from notes receivable resulting from non-operating activities.
Notes receivables from related parties shall be properly disclosed.
Notes provided for security shall be so indicated in the notes.
If the collection of a note receivable becomes impossible, it shall be written off.
Where an action has been instituted, the notes receivable concerned shall be reclassified as other assets rather than current assets, and proper allowance for uncollectible account shall be provided. An explanation of the status of the action shall be provided in the notes.
Allowance for uncollectible account - notes receivable: A deduction of notes receivable.
(5)Accounts receivable: The claims incurred due to primary business falls within this category.
Accounts receivable from related parties shall be properly disclosed.
If the collection of an account receivable becomes impossible, it shall be written off.
Where an action has been instituted, the accounts receivable concerned shall be reclassified as other assets rather than current assets, and proper allowance for uncollectible account shall be provided. An explanation of the status of the action shall be provided in the note.
Allowance for uncollectible account - accounts receivable: A deduction of accounts receivable.
(6)Prepayments: All the prepaid amounts and expenses; prepayments for purchase of fixed assets in accordance with contract and payment for uncompleted construction shall be recorded as fixed assets and shall not be classified as prepayments.
(7)Other receivables: Other receivables not falling within notes receivable and accounts receivable.
If the collection of any receivables becomes impossible, it shall be written off. Where an action has been instituted, the receivables concerned shall be reclassified as other assets rather than current assets, and proper allowance for uncollectible account shall be provided. An explanation of the status of the action shall be provided in the note.
Allowance for uncollectible account - other receivables: A deduction of other receivables.
(8)Other current assets: All the current assets not falling within the above categories.
2.Funds and long-term investments: The funds specifically allocated and deposited for specified use in future and the investments in a specific enterprise approved by the SEC fall in this category.
(1)Funds: The asset allocated/deposited for special purpose such as compensation reserve, funds for improvement and expansion of assets, and various kinds of reserves.
The resolutions and rules based on which a fund is allocated/deposited shall be recorded.
The welfare fund set aside in accordance with the Statute on Employee Welfare Fund shall be classified as expense.
(2)Long-term investments: The long-term equity investments or other property interest in specified enterprises approved by the SEC to achieve the business purpose.
The method used to account for long-term investments shall be provided. Long-term investments shall be separately classified based on their nature.
Long-term equity investments shall be valued based on the following principles:
1)The cost method shall be used if the total number of votes in common stocks or preferred voting stocks held by the company type stock exchange is less than 20% of the total number of votes of the investee company and without significant influence over the investee company, except that the lower-of-cost-or-market method shall be used if the stocks of the investee company have been listed on the stock exchange or traded on the over-the-counter market. However, if it can be proved that the investee company is significantly influenced, the equity method may be used.
2)The equity method shall be used if the total number of votes in common stocks or preferred voting stocks held by the company type stock exchange is 20% or more of the total number of votes of the investee company, unless it can be proved that the investee company is not significantly influenced. Where more than 50% of the votes is held by the company type stock exchange, the investor is deemed to have a controlling power, and consolidated financial statements of the parent and subsidiary companies shall be prepared. If less than 50% of the votes is held by the company type stock exchange, but the total of such votes together with the votes held by another company over which the company type stock exchange has a controlling power is more than 50%, consolidated financial statements shall also be prepared.
For long-term equity investments, the financial statements shall disclose the following matters:
1)Valuation method for the long-term equity investments;
2)Valuation method for sale or transfer;
3)Where the lower-of-cost-or-market method is used, the cost, market price, unrealized losses from decline in stock price, and allowance of losses from decline in stock price;
4)If equity method is used:
(i)Cost, market price, and the amortization period for the difference between the cost and the underlying equity in net assets and the calculation method;
(ii)The limitations for the investee company to distribute earnings;
(iii)Material additional capital reserve from long-term investments;
(iv)The subsequent events of the investee company which have significant influence on the investor company;
Valuation of unamortized premium or discount of long-term investments in bonds shall be adjusted based on acquisition costs. The premium or discount shall be amortized on a reasonable and systematic basis.
If long-term investments are pledged as collateral or subject to restrictions, such shall be indicated in the notes.
3.Fixed assets: The tangible assets required for operation, with an economic life of one year or more, and not for the purpose of sale;
Within the fixed asset classification, land, depreciable assets and assets subject to depletion shall be presented separately.
The fixed assets shall be recorded at acquisition costs or construction costs. Fixed assets that will no longer be used in operations shall be reclassified as other assets at a value equal to the lower of the net realizable value or book value. When there is no net realizable value, the cost and accumulated depreciation shall be offset against each other, and the difference thereof shall be recorded as a loss.
If a leased asset falls under capital lease, such asset shall be capitalized, recorded as a fixed asset, and depreciated on yearly basis. The related lease liability shall be calculated at the present value of all the payable rent (less the lessor's costs under the contract) plus bargain purchase price or the guaranteed residual value and classified as a current liability or long-term liability depending on the expiration date. If the present value is larger than the fair market price of the leased asset, the fair market price shall be used. As to the periodic rental payment, part of it shall be used to pay for liabilities, and interest expense (and service charge) shall be recognized.
If a leased asset falls within operating lease, the improvement made to the leased property is called leasehold improvement and shall be recorded as a fixed asset. The valuation basis for a fixed asset shall be indicated. If the fixed assets have been revalued, the date of revaluation and increased or decreased amount shall be recorded, and the acquisition costs and the appraisal increment shall be separately presented in the balance sheet. The land value increment tax reserve allocated due to land appraisal increment shall be classified as long-term liability.
Except for land, the fixed assets shall be periodically depreciated on a reasonable and systematic basis within the estimated useful life.
The leasehold improvement shall be reasonably and systematically depreciated based on the lower of the estimated useful life and the lease term, and re-classified as expenses of relevant period according to its nature without interruption or reduction.
If a fixed asset is provided as collateral for security, mortgage, or creation of Dien, such shall be indicated. Major accounts of fixed assets are as follows:
(1)Land: all the land of the company used in operations;
(2)Buildings: all the buildings of the company used in operations;
Accumulated depreciation-buildings: a deduction of buildings;
(3)Equipment: all the income-generating equipment acquired for operation purpose;
Information equipment, transportation equipment, and other equipment fall in this category;
Accumulated depreciation-equipment: a deduction of equipment;
(4)Prepayments for building/land: all the prepayments for purchase of land and buildings;
(5)Prepayments for equipment: all the prepayments for purchase of equipment;
(6)Leasehold improvement: the improvement made to the property of operating lease;
Accumulated depreciation-leasehold improvement: a deduction of leasehold improvement;
(7)Other fixed assets;
Accumulated depreciation-other fixed assets: a deduction of other fixed assets.
4.Other assets: all the assets not falling within the above categories and with a collection or realization period of one year or more. When the amount of other assets exceed 5% of the total amount of assets, the names of the accounts shall be separately recorded.
(1)Operation bond: the operation bond set aside in accordance with the Securities and Exchange Law and the Rules for Administration of the Stock Exchange;
(2)Guarantee deposit-out: other guarantees deposited-out;
(3)Deferred debits: long-term prepaid expenses which will bring future economic benefits and shall be periodically amortized subsequently;
(4)Other assets: the assets not falling within the above categories.
5.Settlement/clearance debit item is an item to be offset by the company type stock exchange in handling securities settlement/clearance. When the statement is prepared, the balance after offsetting debit items against credit items shall be recorded. However, the nature, content, use method, and status of pledge/mortgage shall be explained in the footnotes of the financial report, and the details shall be disclosed in the list of accounts.
(1)Settlement/clearance fund: The settlement/clearance fund paid/deposited by securities firms in accordance with the Securities and Exchange Law and the Regulations Governing the Securities Firms and the interest income and relevant expenses derived therefrom shall be recorded under this classification.
(2)Settlement price: the settlement amount receivable from securities firms. This account shall be settled on a daily basis. |
| Article 11 | The liability account/classification in the balance sheet, content thereof, and matters to be noted are as follows:
1.Current liabilities: payables, loans, and other obligations to be liquidated with current assets or the creation of other current liabilities within one year during the ordinary course of business.
(1)Short-term loans: including bank loans, bank overdrafts, and other short-term borrowings.
For short-term loans, the name of lending bank, interest rate, and guarantee status shall be indicated. If collateral is provided for security, the description and book value of such collateral shall be recorded.
Borrowings from shareholders, employees, and affiliates shall be separately recorded.
(2)Notes payable: the unmatured notes payable resulting from major operating activities.
Notes payable resulting from operating activities and notes payable resulting from non-operating activities shall be reported separately. Notes payable to banks and related parties shall be properly disclosed. If collateral is provided as security for notes payable, the description of such collateral and the book value shall be recorded. The notes for guarantee deposit-out which shall be returned for cancellation upon expiration of the guarantee responsibility may be recorded as non- current assets. However, the nature and amount of guarantee shall be indicated in the footnotes of the financial statements.
(3)Accounts payable: the amounts payable resulting from major operating activities.
Accounts payable resulting from operating activities shall be reported separately from accounts payable resulting non-operating activities.
Amounts payable to related parties shall be properly disclosed.
(4)Amounts received in advance: the amounts collected in advance.
Amounts receivable shall be separately recorded based on principal classification, and relevant agreed matters shall be indicated.
(5)Other amounts payable: other amounts payables not falling within notes payable and accounts payable, such as tax payable, salary payable, dividend payable, etc.
The distribution method and estimated date of payment of payable dividend/bonus passed by the shareholders meeting shall be indicated. When loss and profit are calculated at the end of the period, the estimated income tax payable calculated on the basis of the taxable income shall be recorded as current liability.
(6)Other current liabilities: the current liabilities not falling within the above categories, such as that part of corporate bonds and long-term borrowings which will mature within one year.
2.Long-term liabilities: liabilities which will mature after one year, including corporate bonds, long-term borrowings, and long-term payables.
The long-term liability which will mature within one year and be liquidated by the use of current assets or the creation of other current liabilities shall be re-classified as current liability.
For long-term liabilities, the content thereof, date of maturity, interest rate, name of collateral, book value, and other important restrictions shall be disclosed.
Long-term loans to be repaid in foreign currency or in an amount translated on the basis of a foreign exchange rate shall indicate the name of foreign currency, amount, and the accounting method to be used in case of fluctuation of foreign exchange rate shall be indicated.
3.Other liabilities: the liabilities not falling within the above categories, such as guarantee deposit-in, other miscellaneous liabilities, etc. When the amount of other liabilities exceeds 5% of the total amount of liabilities, the name of accounts shall be separately reported.
(1)Compensation reserve: This account is a contra account of "compensation reserve fund" in asset account.
(2)Guarantee deposit-in: all the bonds deposited in, such as computer link-up bond, bond for using securities information, etc.
(3)Guaranteed amount of securities firms: the bonds paid/deposited by securities firms on each business day for rectification of the bond provided for security.
(4)Other liabilities: all the liabilities not falling within the above categories.
4.Settlement/clearance credit item: an item for offset by the stock exchange in handling securities settlement/clearance. When the statement is prepared, the balance after offsetting debit items against credit items shall be recorded. However, the nature, content, use and status of pledge/mortgage shall be explained in the footnotes of the financial report, and the details shall be disclosed in the list of accounts.
(1)Settlement/clearance fund deposit-in: a contra account of "settlement/clearance fund" in asset account.
(2)Settlement price: the settlement amount payable to securities firms. This account shall be settled on a daily basis. |
| Article 12 | The stockholders equity account/classification in balance sheets, content thereof, and matters to be noted shall be as follows:
1.Capital stock: the capital invested by shareholders.
The type of capital stock, par value per share, number of shares authorized, number of shares issued, and special terms shall be indicated.
The number of shares of treasury stock, if any, shall be recorded. The cost thereof shall be stated as a deduction of stockholders equity and shall not be classified as investment.
2.Capital reserve: except for capital stock, the equity not resulting from operating activities.
Premiums on stock, gains on the disposal of fixed assets, donated capital, appreciation from assets revaluation, capital reserve from long-term equity investment by using equity method, and capital reserve from transaction of treasury stocks shall be separately reported.
3.Unrealized losses of long-term investments due to price decline: the unrealized losses of price decline recognized for long-term equity investments by using the lower-of-cost-or market method.
4.Retained earnings (or accumulated deficit): the equity resulting from operating activities, including legal reserve, special reserve, and unappropriated earnings (or accumulated deficit), etc.
(1)Legal reserve: the legal reserve allocated in accordance with the Company Law.
(2)Special reserve: the reserve allocated from earnings in accordance with relevant laws and regulations, articles of incorporation, or resolutions of shareholders meetings.
(3)Unappropriated earnings (or accumulated deficit): the undistributed or unappropriated earnings (an accumulated deficit is the loss not yet recouped).
If the ratio of distribution of earnings at the end of each accounting period is provided in the articles of incorporation, such provision may be followed by either preparing financial statements on an after-distribution basis or disclosing such in the footnotes. In the absence of such provision, distribution of earnings or offsetting of losses shall not be recognized until approved by the shareholders meeting. However, when an earnings distribution has been proposed, such shall be disclosed in the footnotes of the current financial statements.
5.Accumulated translation adjustments: the translation adjustments resulting from foreign exchange transaction or translation of foreign financial statements. |
Section 2: Income Statement
|
| Article 13 | The account structure of income statement and the contents thereof and matters to be noted are as follows:
1.Revenue accounts:
(1)Handling fee revenue: the revenue of handling fee paid on a monthly basis to company type stock exchange at an approved rate by securities brokers based on the volume of trading ordered by customers or by securities dealers based on the volume of trading conducted for their own accounts.
(2)Securities listing fee revenue: the revenue of listing fee paid to company type stock exchange by listed companies based on their paid-in capital in accordance with the "securities listing contracts".
(3)Revenue from fees for use of computer equipment: the revenue of agreed fees paid by securities firms for using the computer equipment of company type stock exchange on the centralized stock market.
(4)Other operating revenue: other operating revenue not falling within the above categories, such as revenue from use of information and from service charge, etc.
(5)Non-operating revenue: all the revenue resulting from non-operating activities in the current period, including interest revenue, investment revenue, and revenue from disposal of fixed assets and investments, etc.
2.Expenditure accounts:
(1)Operating expenses: all the operating expenses required by the company. The operating expenses, such as salary, meal expense, stationery, postage/telegram expense, public relation expense, water/electricity expense, insurance premium, taxes, depreciation, amortization, rental, repair expense, advertisement expense, commission, computer information expense, donation, group membership fee, bad debt, compensation expense, employees' welfare, travel expense, transportation expense, overtime pay, acquisition of miscellaneous items, retirement pension, training expense, service expense, books/newspapers/ magazines expense, settlement/clearance service charge, miscellaneous expenses, etc., shall be recorded in detail based on actual need.
(2)Non-operating expenses: All the financial expenses incurred by non-operating activities, such as losses from disposal of fixed assets, losses from disposal of short-term investments, and losses of short-term investments due to price decline, etc., fall in this category.
3.Operating losses/gains: The net amount of the preceding two Items shall be indicated as pre-tax loss/gain, income tax expense (the amount of income tax saved), and after-tax loss/gain.
4.Extraordinary losses/gains which are distinguished by their unusual nature and the infrequency of their occurrence, such as material loss from major disasters, shall be separately recorded below operating losses/gains, and shall not be amortized on yearly basis.
5.The amount of cumulative effect resulting from the change of accounting principles: This shall be separately recorded below extraordinary losses/gains.
6.Net income (or net loss) of current period: The earnings (or losses) of the current accounting period shall be separately recorded as pre-tax net income, estimated income tax payable, and after-tax net income, and the basis for the estimate of the income tax shall be explained in the footnote.
7.Item 3, Item 4, and Item 5 shall use the intraperiod tax allocation method, indicating the income tax to be allocated (or saved), and record the net amount.
8.At the bottom of the income statement, earnings per share of common stock shall be indicated and separately calculated based on operating income, extraordinary gain, amount of cumulative effect resulting from change of accounting principles, and after-tax net income of current period.
Earnings per share shall be calculated based on weighted-average number of common shares outstanding. If dividend of preferred stock is available, such dividend shall be deducted from the after-tax net income of the current period, and the earnings per share of the after-tax net income of the current period shall be calculated based thereon.
9.If there is any difference between the income tax calculated based on accounting income and the income tax payable calculated based on taxable income, and if such difference results from the difference in timing of recognition of loss/profit, then interperiod tax allocation shall be made. |
Section 3: Statement of Changes in Stockholders' Equity
|
| Article 14 | A statement of changes in stockholders' equity is a report to indicate the changes in the items representing stockholders' equity. The statement shall record the beginning balance, increased or decreased items and amount in the current period, and ending balance of capital stock, capital reserve and retained earnings (or accumulated deficit), unrealized losses of long-term investments due to price decline, accumulated translation adjustments, and treasury stock, etc.
The contents of retained earnings are as follows:
1.Beginning balance;
2.Prior period adjustments of loss and profit: Correction of errors in the calculation, recording, and recognition of loss and profit items in the prior period and in the use of accounting principles and method.
Prior period adjustments of loss and profit shall use intraperiod tax allocation method, indicating the income to be allocated (or saved), and record the net amount.
3.Net profit or net loss of current period.
4.Allocation of legal reserve, special reserve, and distribution of dividends, etc.
5.Net amount of gains on the disposal of fixed assets to be transferred to capital reserve;
6.Ending balance. |
Section 4: Statement of Cash Flows
|
| Article 15 | A statement of cash flows is a summarized report to provide relevant information about the cash receipts and cash payments of the company type stock exchange during a specific period. A statement of cash flows shall be prepared as follows:
1.A statement of cash flows shall be prepared on the basis of cash and cash equivalents (hereinafter referred to as "cash").
2.A statement of cash flows shall report the cash inflows and outflows related to the operation, investment, and financing activities of the company type stock exchange during a specific period. The statement shall classify cash receipts and cash payments as resulting from (1) operating activities; (2) investing activities; and (3) financing activities, and report separately the net effect of such cash flows.
3.Information about investing and financing activities of a company type stock exchange that affects financial position but does not directly affect cash flows shall be supplementally disclosed in the statement of cash flows. Where both investing and financing activities affect cash and non-cash items, the portion affecting cash shall be reported in the statement of cash flows, and the overall picture of the transactions shall be supplementally diclosed.
4.Cash flows from operating activities may be reported by using either direct method or indirect method.
When direct method is used to report cash flows from operating activities, at least the following cash receipts and cash payments shall be separately provided:
(1)handling fee received;
(2)interest and dividend received;
(3)other operating cash receipt;
(4)salary paid;
(5)interest expenses paid;
(6)income tax expense paid;
(7)other operating cash payments.
A company type stock exchange may provide further breakdowns of the above operating cash receipts and payments based on actual need.
Where indirect method is used to report cash flows from operating activities, the cash amount of interest expense and income tax expense paid shall be supplementally disclosed in the statement of cash flows.
5.In reporting cash flows from operating activities, a reconciliation of the net income to net cash flows from operating activities shall be provided to adjust for the effects of non-cash revenue and expense items in the current period, the effects of changes in the amounts of current assets and current liabilities, and the effects of gains or losses on disposal of assets and on payment of debts.
If the direct method is used, the reconciliation shall be provided in a separate schedule. If the indirect method is used, the reconciliation may be either reported within the statement of cash flows or provided in a separate schedule.
The direct method shows directly the operating cash inflows and outflows of the current period, by directly adjusting each item related to operating activities in the income statement from an accruals basis to a cash basis; the indirect method adjusts the net income for revenue and expense items that are non-cash transactions in the current period, for changes in the amounts of current assets and liabilities, and for gains or losses on disposal of assets and on payment of debts, to arrive at cash flows generated from operating activities. |
Section 5: Names and Format of Financial Statements
|
| Article 16 | Names of financial statements and lists of significant account titles are as follows:
1.Balance Sheet (Form 1);
2.Lists of Assets, Liabilities, and Stockholders Equity
Accounts.
(1)List of Cash and Cash Equivalents (Form 2-1);
(2)List of Short-term Investments (Form 2-2);
(3)List of Notes Receivable (Form 2-3);
(4)List of Accounts Receivable (Form 2-4);
(5)List of Prepayments (Form 2-5);
(6)List of Other Receivables (Form 2-6);
(7)List of Other Current Assets (Form 2-7);
(8)List of Changes in Funds (Form 2-8);
(9)List of Changes in Long-term Equity Investments
(Form 2-9);
(10) List of Changes in Long-term Bond Investments
(Form 2-10);
(11) List of Changes in Other Long-term Investments
(Form 2-11);
(12) List of Changes in Fixed Assets (Form 2-12);
(13) List of Changes in Accumulated Depreciation of Fixed Assets (Form 2-13);
(14) List of Other Assets (Form 2-14);
(15) List of Short-term Loans (Form 2-15);
(16) List of Notes Payable (Form 2-16);
(17) List of Accounts Payable (Form 2-17);
(18) List of Receivables (Form 2-18);
(19) List of Other Payables (Form 2-19);
(20) List of Other Current Liabilities (Form 2-20);
(21) List of Long-term Loans (Form 2-21);
(22) List of Capital Stock (Form 2-22);
(23) List of Changes in Capital Reserve (Form 2-23).
3.Income Statement (Form 3);
4.Lists of Revenue and Expense Accounts.
(1)List of Handling Fee Revenue;
(2)List of Securities Listing Fee Revenue;
(3)List of Revenue from Fee for Use of Computer Equipment (Form 4-3);
(4)List of Operating Expenses (Form 4-4);
(5)List of Non-operating Revenue and Expenditure (Form 4-5);
5.Statement of Changes in Stockholders' Equity (Form 5);
6.Statement of Cash Flows (Form 6);
7.List of Settlement/Clearance Fund (Form 7);
8.List of Settlement/Clearance Fund and Credit Lines of Banks(Form 8);
9.List of Receipt, Payment, and Use of Settlement/ClearanceFund (Form 9). |
Section 6: Interim Report
|
| Article 17 | A company type stock exchange may prepare semi-annual financial reports in accordance with Chapter 1 and Chapter 2, and waive the consolidated statements requirement. |
Chapter III Supplemental Provisions |
| Article 18 | These Criteria shall become effective on the date of promulgation. |