|
Article 15
|
Liabilities shall be properly classified. Current and non-current liabilities shall be distinguished.
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 securities firm 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 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 presented.
- Borrowings from non-financial institutions in accordance with Article 17 of the Regulations Governing Securities Firms shall be presented separately.
- Commercial paper payable:
- Commercial paper issued through financial institutions to acquire funds from the money market.
- Commercial paper payable shall be measured at amortized cost using the effective interest method. However, short-term commercial paper payable with no stated interest rate may be measured at the original face amount if the effect of discounting is immaterial.
- For commercial paper 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: The following financial instruments shall be appropriately recorded under the category of investments in bonds with reverse repurchase agreements – short sale, call (put) warrants, securities borrowed, or derivative instruments:
- 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; or
- Derivative financial liabilities, except for financial guarantee contracts or financial liabilities that are designated and effective hedging instruments.
- Financial liabilities that are designated as 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.
- Liabilities for bonds with repurchase agreements: The actual amounts received by a securities firm when engaging in transactions in bonds with repurchase agreements.
- Short sale margins: Margins received from short selling customers by a securities firm conducting securities trading margin purchase and short sale business.
- Payables for short sale collateral received: Short sale proceeds (less securities transaction taxes, handling fees for execution of customer orders, and short sale handling fees) received as collateral from short selling customers by a securities firm conducting securities trading margin purchase and short sale business.
- Trade payables:
- Payables arising from a securities firm's business operations, including transaction proceeds payable from its purchase of securities held for operations and payables from its execution of customer orders to buy or sell securities. The details of such trade payables shall be disclosed in the notes.
- 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.
- Payables to related parties in significant amounts shall be presented separately.
- Other payables: Payables other than 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.
- Current tax liabilities: Unpaid tax for current and prior periods.
- Provisions – current:
- Any liability of uncertain timing or amount.
- Provisions shall be accounted for in accordance with IAS 37.
- A provision shall be recognized when a securities firm 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 securities firm 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):
- For bonds issued by a securities firm, 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:
- 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 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.
- 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, liabilities for bonds with repurchase agreements, short sale margins, payables for short sale collateral received, 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, short sale margins, payables for short sale collateral received, trade payables, other payables, 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, financial liabilities for hedging, lease liabilities, and provisions shall be distinguished as current and non-current based on liquidity.
|