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Article 11
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Assets shall be properly classified. Current and non-current assets shall be distinguished, except when a presentation of all assets in order of liquidity provides information that is reliable and more relevant.
For each asset line item, the total amount expected to be recovered within 12 months after the balance sheet date and the total amount expected to be recovered more than 12 months after the balance sheet date shall be separately presented in the financial reports or disclosed in the notes.
Current assets means that the company-type stock exchange expects to realize the asset, or intends to sell or consume it, in its normal operating cycle; that it holds the asset primarily for the purpose of trading; that it expects to realize the asset within 12 months after the balance sheet date; or that the asset is cash or a cash equivalent, unless the asset is to be used for an exchange or to settle a liability, or otherwise remains restricted, at more than 12 months after the balance sheet date. As a minimum, current assets shall include the following asset line items:
- Cash and cash equivalents:
- Cash on hand, demand deposits, and short-term, highly liquid time deposits or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
- A company-type stock exchange shall disclose the components of cash and cash equivalents and the policy which it adopts in determining the composition of cash and cash equivalents.
- Financial assets at fair value through profit or loss –current:
- Financial assets not measured at amortized cost or at fair value through other comprehensive income.
- Financial assets measured at amortized cost or at fair value through other comprehensive income, which may be designated as financial assets measured at fair value through profit or loss according to IFRS 9.
- Financial assets measured at fair value through other comprehensive income - current:
- Debt instrument investments that meet all of the following conditions:
- The company-type stock exchange holds the financial assets within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
- Equity investments not held for trading, for which the entity has irrevocably elected at initial recognition to present changes in fair value in "other comprehensive income".
- Financial assets measured at amortized cost – current, meaning all of the following conditions are met:
- The company-type stock exchange holds the financial assets within a business model whose objective is to hold the financial asset to collect the contractual cash flows.
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
- Financial assets for hedging –current: Any financial asset that is a designated and effective hedging instrument under hedge accounting requirements.
- Contract assets:
- The entity has transferred goods or services to the customer according to the terms and conditions of a contract, but does not yet have an unconditional right to consideration.
- The recognition and measurement of the loss allowance for contract assets shall be in accordance with IFRS 9.
- Trade receivables: Means the entity has an unconditional contractual right to consideration for goods or services that have been transferred:
- Trade receivables shall be measured in accordance with IFRS 9. However, short-term trade receivables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
- With respect to discounted or transferred trade receivables, an assessment shall be made to determine whether the risks and rewards of the trade receivables, and the control retained over them, will qualify them for derecognition under IFRS 9.
Trade receivables from related parties in significant amounts shall be presented separately.
- The company-type stock exchange shall disclose an aged analysis of trade receivables.
- Other receivables: Refers to receivables other than notes receivable and trade receivables.
- Current tax assets: The portion of the tax amount already paid in respect of current and prior periods that exceeds the amount due for those periods.
- Prepayments: All prepayments and prepaid expenses.
- Non-current assets held for sale:
- Any non-current asset, or asset included in a disposal group held for sale, that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
- The measurement, presentation, and disclosure of non-current assets held for sale and disposal groups held for sale shall be made in accordance with IFRS 5.
- When non-current assets or disposal groups classified as held for sale no longer meet the criteria in IFRS 5, they shall cease to be classified as held for sale.
- When assets or disposal groups meet the definition of held for distribution to owners, they shall be reclassified from held for sale to held for distribution to owners, and shall be deemed an extension of the original disposal plan, and the classification, presentation, and measurement of the new disposal plan shall apply. When the assets or disposal groups classified as held for distribution to owners no longer meet the criteria in IFRS 5, they shall cease to be classified as held for distribution to owners.
- Other current assets: Current assets not attributable to any of the classes above.
Non-current assets means tangible, intangible and financial assets of a long-term nature, other than assets classified as current. As a minimum, non-current assets shall include the following asset line items:
- Investments accounted for using the equity method:
- The valuation and presentation of investments accounted for using the equity method shall be made in accordance with IAS 28.
- When investment gain or loss is recognized, if the financial reports prepared by an associate do not conform to these Regulations, those financial reports shall first be adjusted to achieve conformance before they may be used to recognize investment gain or loss. The financial reports of an associate used in applying the equity method shall be prepared as of the same date as that of the investor, and if prepared as of a different date, adjustments shall be made for the effects of significant transactions or events that occur between that date and the date of the investor's financial reports. In no case shall there be more than 3 months difference between the balance sheet date of the associate and that of the investor. If a CPA determines, pursuant to Statement of Auditing Standards No. 51, that an associate has a material effect on the fair presentation of the financial reports of an investor, the financial reports of the associate shall be audited by a CPA in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and generally accepted auditing standards.
- If an investment accounted for using the equity method is pledged as collateral or otherwise subject to any restriction or limitation, that fact shall be noted.
- Property and equipment:
- Tangible asset items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and that are expected to be used during more than 1 financial year or 1 operating cycle.
- Property and equipment shall be subsequently measured using the cost model and accounted for in accordance with IAS 16.
- Each component of property and equipment that is significant shall be depreciated separately. The depreciation method used shall reflect the pattern in which the asset's future economic benefits are expected to be consumed. If that pattern cannot be determined reliably, the straight-line method shall be used. The depreciable amount should be allocated on a systematic basis over the asset's useful life.
- When items of property and equipment have different useful lives, or provide economic benefits in different ways, or are subject to different depreciation methods or depreciation rates, the notes to the financial reports shall show each class of their material components.
- Right-of-use assets:
- Means an asset that represents a lessee's right to use an underlying asset for the lease term.
- A right-of-use asset shall be accounted for in accordance with IFRS 16.
- Investment property:
- Means property that is held by the owner or that is held by the lessee with the right of use, to earn rentals, or for capital appreciation, or both.
- Investment property shall be subsequently measured using the cost model and accounted for in accordance with IAS 40. If the investment property is subsequently measured at fair value, the valuation model, qualifications of the appraiser, and information disclosure shall comply with Article 9, paragraph 4, subparagraph 4 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
- Intangible assets:
- Refers to an identifiable non-monetary asset without physical substance that meets the definition of identifiability, control, and existence of future economic benefits.
- Intangible assets shall be subsequently measured using the cost model and accounted for in accordance with IAS 38.
- The amortization method used shall reflect the pattern in which the asset's future economic benefits are expected to be consumed. If that pattern cannot be determined reliably, the straight-line method shall be used. The amortized amount of an intangible asset shall be allocated on a systematic basis over its useful life.
- Deferred tax assets: The amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carryforward of unused tax losses, and the carryforward of unused tax credits.
- Settlement and clearing debit items: Refers to an item used by a company-type stock exchange for its securities settlement and clearing operations:
- Settlement and clearing funds: Settlement and clearing funds deposited by securities firms in accordance with the Act and the Regulations Governing Securities Firms and the interest revenue and relevant fees arising from these funds shall be recorded under this item. The nature, content, utilization, and pledge status of these funds shall be indicated in the notes to the financial reports.
- Settlement prices: Settlement amounts receivable from securities firms.
- Other non-current assets: Non-current assets not attributable to any of the classes above.
The accounting treatment and the recognition and measurement of loss allowances for the items described in the preceding two paragraphs in relation to financial assets measured at fair value through profit or loss, financial assets measured at fair value through other comprehensive income, financial assets measured at amortized cost, financial assets for hedging, trade receivables, and other receivables shall be in accordance with IFRS 9. Loss allowances shall be classified respectively as a deduction from financial assets measured at amortized cost, notes receivable, trade receivables, and other receivables. If those classifications are further subclassified, the loss allowances thereof shall also be presented respectively in the same manner.
A company-type stock exchange shall assess at each balance sheet date whether there is any objective evidence of impairment for the items described in paragraph 4 in relation to investments accounted for using the equity method, property and equipment, right-of-use assets, investment property measured using the cost model, intangible assets, and evaluation assets. If any such evidence exists, the company-type stock exchange shall recognize the amount of any impairment loss in accordance with IAS 36. If the recoverable amount of non-financial assets is determined on the basis of fair value less costs of disposal, disclose the extra information regarding the fair value measurement, including the level of the fair value hierarchy, the valuation techniques, and the key assumptions. If the recoverable amount is determined on the basis of value in use, disclose the discount rate for value in use measurement.
With respect to the items described in paragraph 3 and paragraph 4 in relation to financial assets at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, financial assets for hedging, trade receivables, other receivables, non-current assets held for sale, and investment property, the measurement and disclosure of fair value shall be made in accordance with IFRS 13.
The items described in paragraph 3 and paragraph 4 in relation to financial assets at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, financial assets for hedging, and contract assets shall be distinguished as current and non-current based on liquidity.
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Article 12
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Liabilities shall be properly classified. Current and non-current liabilities shall be distinguished, except when a presentation of all liabilities in order of liquidity provides information that is reliable and more relevant.
For each liability line item, the total amount expected to be settled within 12 months after the balance sheet date and the total amount expected to be settled more than 12 months after the balance sheet date shall be separately presented in the financial reports or disclosed in the notes.
Current liability means that the company-type stock exchange expects to settle the liability in its normal operating cycle; that it holds the liability primarily for the purpose of trading; that it expects to settle the liability when due within 12 months after the balance sheet date, even if an agreement to refinance or to reschedule payments on a long-term basis is completed after the balance sheet date and before the financial reports are authorized for issue; or that it does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. As a minimum, current liabilities shall include the following liability line items:
- Short-term borrowings:
- Includes short-term borrowings from banks, overdrafts, and other short-term borrowings.
- For short-term borrowing, the nature of the borrowing, the name of the lending bank, the interest rate range, the maturity date, and the guarantee status shall be noted based on the type of borrowing. If collateral is provided, the name and carrying amount of the collateral shall be stated.
- Borrowings from financial institutions, shareholders, employees, related parties, and other individuals or institutions shall be separately noted.
- Short-term bills payable:
- Short-term bills issued through financial institutions to acquire funds from the money market, including commercial paper payable and bankers' acceptances.
- Short-term bills payable shall be measured at amortized cost using the effective interest method. However, short-term bills payable with no stated interest rate may be measured at the original face amount if the effect of discounting is immaterial.
- For short-term bills payable, the guarantor or accepting institution and the interest rate shall be noted. If collateral is provided, the name and carrying amount of the collateral shall be noted.
- Financial liabilities at fair value through profit or loss – current:
- Financial liabilities held for trading:
- Liabilities that are incurred principally for the purpose of repurchasing them in the near term.
- Liabilities that, upon initial recognition, are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent pattern of short-term profit-taking.
- Liabilities that are derivative financial liabilities, except for financial guarantee contracts or derivative financial liabilities that are designated and effective hedging instruments.
- Financial liabilities that are designated as measured at fair value through profit or loss.
- Financial liabilities at fair value through profit or loss shall be measured at fair value. However, with respect to a financial liability designated as at fair value through profit or loss, if the amount of change in the fair value of the financial liability is attributable to change in the credit risk, it shall be recognized in other comprehensive income, unless for the purpose of avoiding accounting mismatch or in the case of loan commitments and financial guarantee contracts, under which circumstances the amount of changes in fair value shall be recognized in profit or loss.
- Financial liabilities for hedging -- current: A financial liability that is a designated and effective hedging instrument under hedge accounting requirements.
- Contract liability: Means an entity's obligation to transfer goods or services to a customer for which the entity has received or is entitled to receive consideration from the customer under the terms and conditions of a contract.
- Trade payables:
- Refers to payables resulting from principal business operations.
- Trade payables shall be measured at amortized cost using the effective interest method. However, short-term trade payables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
- Trade payables arising from operating activities shall be presented separately from other payables arising from non-operating activities.
- Payables to related parties in significant amounts shall be presented separately.
- If collateral has been provided for trade payables, the name and carrying amount of the collateral shall be noted.
- Other payables: Payables other than notes payable and trade payables, such as tax payable, accrued payroll, and dividends payable. For dividends and bonuses payable passed by resolution of the shareholders meeting, the distribution method and scheduled payment date, if determined, shall be disclosed.
- Current tax liabilities: Unpaid tax for current and prior periods.
- Provisions -- current:
- Refers to any liability of uncertain timing or amount.
- Provisions shall be accounted for in accordance with IAS 37.
- A provision shall be recognized when a company-type stock exchange has a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
- A company-type stock exchange shall disaggregate provisions into provisions for employee benefits and other items in the notes to the financial reports.
- Liabilities directly associated with non-current assets held for sale: Any liability included in a disposal group held for sale that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
- Other current liabilities: Current liabilities not attributable to any of the classes above.
Non-current liabilities means liabilities other than current liabilities. As a minimum, non-current liabilities shall include the following liability line items:
- Bonds payable (including overseas bonds): Refers to bonds issued by a company-type stock exchange:
- For issued bonds, the total approved amount, interest rate, maturity date, name of collateral, carrying amount, issuing area, and other relevant terms and restrictions shall be noted in the notes to the financial reports. If the bonds are convertible bonds, the method of conversion and amounts already converted shall also be noted.
- Premiums and discounts on bonds payable are valuations of bonds payable. They shall be presented as an addition to or deduction from bonds payable, and shall also be amortized, as an adjustment to interest expenses, using the effective interest method during the period of bond circulation.
- Long-term borrowings:
- Includes long-term borrowings from banks and other long-term borrowings or borrowings repaid in installments. For long-term borrowings, the content, maturity date, interest rate, name of collateral, carrying amount, and any other important restriction terms shall be noted.
- For a long-term borrowing repaid in a foreign currency or in an amount translated at a foreign exchange rate, the name and amount of such foreign currency shall be noted.
- Long-term borrowings from shareholders, employees, and related parties shall be noted separately.
- Long-term notes payable and other long-term payables shall be measured at amortized cost using the effective interest method.
- Lease liabilities:
- Means the present value of the lease payments that the lessee has not paid.
- Lease liabilities shall be accounted for in accordance with IFRS 16.
- Deferred tax liabilities: The amounts of income taxes payable in future periods in respect of taxable temporary differences.
- Settlement and clearing credit items: An item used by a company-type stock exchange for its securities settlement and clearing operations:
- Deposits received for settlement and clearing funds: A contra item to the "settlement and clearing funds" on the assets side. The nature, content, utilization, and pledge status of these deposited funds shall be indicated in the notes to the financial reports.
- Settlement prices: Settlement amounts payable to securities firms.
- Other non-current liabilities: Non-current liabilities not attributable to any of the classes above:
The items described in the preceding two paragraphs in relation to financial liabilities at fair value through profit or loss, financial liabilities for hedging, trade payables, and other payables shall be accounted for in accordance with IFRS 9.
With respect to the items described in paragraphs 3 and 4 in relation to financial liabilities at fair value through profit or loss, financial liabilities for hedging, trade payables, other payables, liabilities directly associated with non-current assets held for sale, bonds payable, and long-term borrowings, the measurement and disclosure of fair value shall be made in accordance with IFRS 13.
The items described in paragraph 3 and paragraph 4 in relation to financial liabilities at fair value through profit or loss, contract liability, financial liabilities for hedging, lease liabilities, and provisions shall be distinguished as current and non-current based on liquidity.
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