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Article 10
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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 entity expects to settle the liability in its normal operating cycle; that it holds the liability primarily for the purpose of trading; that the liability is due to be settled 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 the entity on the balance sheet date does not have in substance the 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 transfer of the entity's own equity instruments do not affect its classification as current or non-current if the entity classifies the option as an equity instrument. As a minimum, current liabilities shall include the following liability line items:
1. Short-term borrowings:
A. Includes short-term borrowings from banks, overdrafts, and other short-term borrowings.
B. For short-term borrowing, the nature of the borrowing, the guarantee status, and the interest rate range shall be noted based on the type of borrowing. If collateral is provided, the name and carrying amount of the collateral shall be noted.
C. Borrowings from financial institutions, shareholders, employees, related parties, and other individuals or institutions shall be separately noted.
2. Short-term bills payable:
A. Short-term bills issued through financial institutions to acquire funds from the money market, including commercial paper payable and bankers' acceptances.
B. 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.
C. 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.
3. Financial liabilities at fair value through profit or loss - current:
A. Financial liabilities held for trading:
a. Liabilities that are incurred principally for the purpose of repurchasing them in the near term.
b. 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.
c. Liabilities that are derivative financial liabilities, except for financial guarantee contracts or derivative financial liabilities that are designated and effective hedging instruments.
B. Financial liabilities at fair value through profit or loss..
C. 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.
4. Financial liabilities for hedging - current: A financial liability that is a designated and effective hedging instrument under hedge accounting requirements.
5. 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.
6. Notes payable: Means all notes payable:
A. Notes payable shall be measured at amortized cost using the effective interest method. However, short-term notes payable with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
B. Notes payable arising from operating activities shall be presented separately from notes payable arising from non-operating activities.
C. Notes payable to banks or related parties in significant amounts shall be presented separately.
D. If collateral has been provided for notes payable, the name and carrying amount of the collateral shall be noted.
E. Notes used for refundable deposits that can be recovered for cancellation upon termination of the guarantee obligation need not be presented as current liabilities, provided that the nature and amount of the guarantee shall be indicated in the notes to the financial reports.
7. Trade payables:
A. Liabilities incurred for purchase of materials or supplies, goods, or services on credit.
B. 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.
C. Trade payables arising from operating activities shall be presented separately from other payables arising from non-operating activities.
D. Payables to related parties in significant amounts shall be presented separately.
E. If collateral has been provided for trade payables, the name and carrying amount of the collateral shall be noted.
8. 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 board of directors or a shareholders meeting in accordance with the Company Act, the distribution method and scheduled payment date, if determined, shall be disclosed.
9. Current tax liabilities: Unpaid tax for current and prior periods.
10. Provisions - current:
A. Means any liability of uncertain timing or amount.
B. Provisions shall be accounted for in accordance with IAS 37.
C. A provision shall be recognized when an issuer 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.
D. An issuer shall disaggregate provisions into provisions for employee benefits and other items in the notes to the financial reports.
11. 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.
12. Other current liabilities: Current liabilities not attributable to any of the classes above.
Non-current liabilities means liabilities other than current liabilities. Whether the entity intends or expects to settle a liability within 12 months after the balance sheet date does not affect the classification of the liability as current or non-current. As a minimum, non-current liabilities shall include the following liability line items:
1. Bonds payable (including overseas bonds): Bonds issued by an issuer.
A. 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.
B. 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.
2. Long-term borrowings:
A. 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.
B. 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.
C. Long-term borrowings from shareholders, employees, and related parties shall be noted separately.
D. Long-term notes payable and other long-term payables shall be measured at amortized cost using the effective interest method.
3. Lease liabilities:
A. Means the present value of the lease payments that the lessee has not paid.
B. Lease liabilities shall be accounted for in accordance with IFRS 16.
4. Deferred tax liabilities: The amounts of income taxes payable in future periods in respect of taxable temporary differences.
5. 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, notes payable, 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, notes payable, 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 paragraphs 3 and 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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Article 11
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Equity items, their components, and information to be disclosed in the balance sheet are as follows:
1. Equity attributable to owners of the parent:
A. Share capital:
a. Capital contributed by shareholders to an issuer, but excluding preferred shares in the nature of liabilities.
b. For share capital, the classes, par value per share, the number of shares authorized, the number of shares issued and fully paid (including shares not yet registered with the competent authority in charge of company registration), a reconciliation of the number of shares outstanding at the beginning and at the end of the period, the rights, preferences and restrictions attaching to each class of share capital, shares in the issuer held by the issuer or by its subsidiaries or associates, shares reserved for issue (or for transfer or conversion) under options and contracts for the sale of shares, and special conditions shall be disclosed in the notes.
c. If convertible preferred shares or overseas depositary receipts are issued, the issuing area, issuance and conversion methods, converted amount, and special conditions shall be disclosed.
B. Capital surplus: Means the equity components of financial instruments issued by an issuer or premiums resulting from share capital transactions between an issuer and its owners, and typically includes premium in excess of the par value of the shares issued, donated surplus, and others arising as a result of regulatory provisions associated with these Regulations. Capital surpluses shall be presented separately according to their nature; if there is any restriction on their use, the restriction shall be disclosed in the notes.
C. Retained earnings (or accumulated deficit): Equity resulting from operating activities, including legal reserves, special reserves, and undistributed earnings (or deficit to be offset).
a. Legal reserve: A fixed-percentage reserve appropriated as required by the Company Act.
b. Special reserve: A reserve appropriated from earnings in accordance with the requirements of applicable laws and regulations, contracts, or articles of incorporation, or as resolved at shareholders meetings.
c. Undistributed earnings (or deficit to be offset): Undistributed and unappropriated earnings ("deficit to be offset" is deficit not yet offset).
d. An earnings distribution or offsetting of deficit shall not be accounted for unless and until passed by a resolution of the board of directors or a shareholders meeting in accordance with the Company Act. However, when an earnings distribution or offsetting of deficit has been proposed, such shall be disclosed in the notes to the financial reports for the current period.
D. Other equity: Includes the accumulated balances of exchange differences resulting from translating the financial statements of a foreign operation, of unrealized gains or losses from financial assets measured at fair value through other comprehensive income, gains and losses on hedging instruments, and of revaluation surplus.
E. Treasury shares: Treasury shares shall be accounted for using the cost method and presented as a deduction from equity. The number of shares shall be noted.
2. Non-controlling interest:
A. Means the equity in a subsidiary not attributable, directly or indirectly, to a parent.
B. For each business combination, the components of non-controlling interest in the acquiree shall be measured in accordance with IFRS 3.
C. An issuer shall disclose information on any subsidiary in which the issuer has a non-controlling interest of materiality and on the non-controlling interest in accordance with IFRS 12.
An issuer may elect to recognize the remeasurements of defined benefit plans in retained earnings or other equity, and disclose the accounting policy in the notes. Remeasurements of defined benefit plans that have been recognized in other equity may not be reclassified into profit or loss or transferred into retained earnings in a subsequent period.
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Article 31
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These Regulations shall come into force from the date of issuance, with the exception of Article 2, Article 4, Article 7, paragraph 1, Articles 8 to 13, Article 15, Article 17, Article 19, Article 20, Article 21, Article 24, Article 26, and Article 28, as amended on 13 August 2014, which shall come into force from financial year 2015, the articles amended on 19 December 2016, which shall come into force from financial year 2017, the articles amended on 28 June 2017, which shall come into force from financial year 2018, Article 9, paragraph 4, subparagraphs 3 and 4, Article 9, paragraph 6, Article 10, Article 15, Article 23, and Forms 1 and 1-1 of Article 19, as amended on 13 July 2018, which shall come into force from financial year 2019, the articles amended on 18 March 2020, which shall come into force from financial year 2020, Article 6 and Article 9, paragraph 4, subparagraph 1, item B amended on 24 November 2022, which shall come into force from financial year 2023, and Article 10 amended on 28 December 2023, which shall come into force from financial year 2024.
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