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Article 15
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The account structure in a consolidated income statement, content of account entries, and matters to be noted are as follows:
- Revenues and expenses shall be classified according to their nature, and net interest income, net non-interest income, credit provisions, provisions to insurance policy reserves, and operating expenses shall be separately disclosed.
- Net interest income: Means the difference of interest income minus interest expenses.
- Interest income: Means interest income generated by loans, deposits, conduct of margin purchase and short sale business, and holdings of bills, bonds, bill and bond reverse repurchase investments, reinsurance deposits paid out, and financial assets not designated at fair value through profit or loss.
- Interest expenses: Means interest expenses generated by deposits accepted or other debts contracted, conduct of margin purchase or short sale business, bill and bond repurchase liabilities, reinsurance deposits received, and financial liabilities.
- Net non-interest income:
- Net income on service charges and commissions: Means the net amount of service charge and commission revenues minus service charge expenses and commission payouts, including service charges and commissions received for execution of trading orders, conduct of short sale business, or the provision of guarantees, certification, underwriting, brokering, and ceding of reinsurance; service charge expenses and commission payouts include brokerage and dealer handling fee expenses, refinancing service charges, underwriting service charges, commissions paid out in connection with the writing of insurance contracts, and reinsurance commissions paid out upon assumption of reinsurance.
- Net insurance business income: Means the net amount of insurance business income minus insurance business expenses.
- Insurance business income: Includes premium income, claims and benefits recovered from reinsurers, and income from insurance product assets held in segregated custody accounts.
- Insurance business expenses: Includes reinsurance expenses, underwriting expenses, insurance claims and benefits, contributions to the appropriate stabilization fund, and expenses connected with insurance product assets held in segregated custody accounts.
- Gains (losses) on financial assets and liabilities designated at fair value through profit or loss: Means gains (losses), dividends, and end-of-period fair market valuation gains (losses) on: (a) assets and liabilities held for trading or for borrowing and lending transactions; and (b) financial assets and liabilities designated at fair value.
- Realized gains (losses) on available-for-sale financial assets: Means gains (losses) and dividends arising from the trading, borrowing, or lending of available-for-sale financial assets.
- Realized gains (losses) on held-to-maturity financial assets: Means gains (losses) arising from the trading, borrowing, or lending of held-to-maturity financial assets.
- Calculation and presentation of gains (losses) on equity investments recognized using the equity method shall be carried out in accordance with Statement of Financial Accounting Standards No. 5.
- Gains (losses) on real estate investments: Means the netted figure for real estate investment gains and real estate investment losses.
- Foreign exchange gains (losses): Means actual exchange or valuation gains (losses) on foreign-currency-denominated assets and liabilities due to exchange rate fluctuations. In order to avoid risks arising from net investments in overseas business units, these shall be accounted for in accordance with Statement of Financial Accounting Standards No. 34.
- Asset impairment losses, and gains on reversal of impairment, shall be calculated and presented in accordance with the applicable Statements of Financial Accounting Standards.
- Other net non-interest income (losses): Means non-interest income or losses other than those falling under the accounts listed above. Other net non-interest losses (e.g. amounts set aside as reserve against losses on other business, and losses on the sale of non-performing loans) shall be recorded separately in the income statement if their combined dollar amount is equal to or greater than 5 percent of net non-interest income.
- Net income: Means the total figure for net interest income plus net non-interest income.
- Credit provisions: Means bad debt provisions set aside against loan assets.
- Provisions to insurance policy reserves: Means expenses incurred in provisioning to and withdrawing amounts from premium reserve, special reserve, and loss reserve.
- Operating expenses: Means expenditures required to carry out business operations. As necessary, these shall be recorded individually, classified principally as personnel expenses, depreciation and amortization expenses, and other business and administrative expenses.
- Income (losses) from continuing operations: Means the net amounts in the preceding four subparagraphs. These shall be recorded separately as pre-tax income (losses), income tax expenses (benefits), and consolidated after-tax income (losses).
- Income (losses) from discontinued operations: Income or loss arising in the current period from disposal or planned disposal of a significant business segment, including operating income (losses) before discontinuation of operations and gains (losses) on disposal in the current period. Gains (losses) on disposal shall be measured on the date on which the decision for the disposal is made. Should there be a loss on a disposal, it shall be recognized promptly; should there be a gain, it shall not be recognized until realization.
- Extraordinary gains and losses: Means income statement items unusual in nature and infrequent in occurrence. These shall be recorded individually and shall not be amortized over more than one year.
- Cumulative effects of changes in accounting principles: Shall be recorded individually, after extraordinary gains and losses.
- Consolidated total income (losses): Means consolidated earnings (or deficit) for the current accounting period, being the sum of the items set out in the preceding four subparagraphs.
- Consolidated total income (losses) shall be allocated among the parent company shareholders and minority interest.
- Earnings per share shall be recorded separately for consolidated income (losses) from continuing operations, income (losses) from discontinued operations, extraordinary gains (losses), cumulative effects of changes in accounting principles, and consolidated total income (losses).
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