In order that a consolidated financial report may clearly and thoroughly reflect the financial position, operating results, and cash flows of a financial holding company and its subsidiaries, it shall be accompanied by notes setting forth the following matters on a consolidated basis:
- An outline history of the company, and a description of its business scope, including a description of the investment/shareholding relationship between the entities covered by the consolidated financial statements and each of the subsidiaries.
- Important changes in the organization and significant changes to the management system.
- A declaration affirming that the consolidated financial statements were prepared in conformance with these Regulations and other applicable acts and regulations (the titles of such act or regulations shall be expressly recorded) and generally accepted accounting principles.
- A summary of significant accounting policies and measurement bases.
- Where for some special reason the accounting treatment changes, thus affecting the comparison of financial information between two successive periods, the reason for the change and its effect on the financial statements shall be explained.
- Among the amounts recorded in the consolidated financial report, the valuation basis shall be noted in the case of financial instruments and any other items for which notation of the valuation basis is necessary.
- If any account contained in the consolidated financial report is subject to any legal, contractual, or other type of restriction, the conditions and time frame thereof and any relevant matters shall be stated.
- Any addition, expansion, construction, lease, obsolescence, idleness, sale, pledge, transfer, or long-term lease of major assets.
- Any material commitments or contingent liabilities (including off-balance sheet items).
- Any change in capital structure.
- Borrowings (including loans needed by an insurance subsidiary to pay major claims).
- Any losses caused by major disasters.
- Acceptance of any research and development project funded by another party, and the amount thereof.
- Major litigation pending or concluded.
- Signing, completion, cancellation, or voidance of major contracts.
- Information related to employee pensions.
- Financial instruments shall be disclosed in accordance with the Statements of Financial Accounting Standards applicable to financial instruments.
- Information relating to transfers of financial assets and extinguishments of liabilities shall be disclosed in accordance with Statement of Accounting Standards No. 33.
- Information relating to capital adequacy. (Form A)
- The aggregate amount, or ratio, of loans extended, endorsements given, or any other transactions conducted by all subsidiaries of the financial holding company to, for, or with a single party, single group of related parties, or single group of affiliated enterprises, disclosure of which is required under Article 46 of the Financial Holding Company Act. (Form B)
- Material effects of changes in government acts and regulations.
- Information relating to any discontinued operations.
- Acquisition of a major part of the operations, assets, and liabilities of another financial institution, or transfer of such to another financial institution.
- With respect to the revenues, costs, expenses, and income (losses) generated though business dealings or transactions, joint business promotion, information sharing, and common use of business facilities or premises by or between the financial holding company and its subsidiaries, or between any two subsidiaries, state how these have been allocated, and the dollar amounts thereof.
- In the case of private placement of securities, disclose the type, issue date, and dollar amount.
- Segment financial information. (Form C)
- The financial holding company's financial statements and the condensed balance sheet and income statement of each subsidiary. (Form D, Form E)
- Material business information for each subsidiary, such as profitability, asset quality, management information, liquidity, and market risk sensitivity. (Forms F through J).
- Where a subsidiary holds shares in the parent company, the notes to the financial report shall state the name of each such subsidiary, and for each one shall separately disclose the number of shares held, dollar amount, reason, limits on retained earnings, statutory time limit for disposal, and planned disposal method passed by a board of directors resolution.
- Other necessary disclosures to prevent misunderstanding by users or to facilitate the fair presentation of the consolidated financial report.