The asset account categories on the balance sheet, content thereof, and matters to be noted are as follows:
- "Cash and cash equivalents" means cash on hand, negotiable instruments for clearing, revolving fund used for small expenditures, and deposits due from other financial institutions. A fund which has been earmarked for specific purposes or the use of which is restricted shall not be classified into this account title.
- "Due from the Central Bank and other banks" means deposits due from and reserve deposits with the Central Bank and loans to and overdrafts by other banks.
- "Bills and securities purchased" means purchases of certificates of deposit, commercial papers, listed and over-the-counter stocks and beneficiary certificates, and investments in bills and bonds under reverse repurchase agreements. Such shall be accounted for at acquisition cost and valued at period-end at the lower-of-cost-or-market value. Where total market value is lower than total cost, the resultant unrealized loss on market price decline shall be posted as loss on bills and securities purchased, with a valuation account being set up for that purpose, and shall be set off against the credit balance upon recovery in market value. When such bills and securities are sold, the difference between net selling price and cost shall be recorded as either gain or loss on trading bills and securities. A footnote shall be provided where bills and securities purchased are subject to a repurchase agreement or otherwise subject to any restriction or limitation.
- "Receivables" means all amounts receivable, such as accounts receivable, interest receivable, income receivable, acceptances receivable, and other receivables.
- Accounts receivable, interest receivable and income receivable shall be valued at present value. However, credit card accounts having no definite maturity date and such accounts receivable, interest receivable, and income receivable that become mature within one year may be valued at book value where the discrepancy between their fair value and maturity value is small, and where they are frequently traded. Accounts receivable in significant amount from related parties shall be separately disclosed. Such receivables shall be assessed at the time of closing for uncollectible amounts, and an appropriate amount of allowance for bad debts set aside, and shown in net amount.
- "Acceptances receivable" means, in relation to a draft accepted by the Bank as agreed between it and a customer, the amount collected from the customer before maturity.
- "Other receivables" means amounts receivable other than accounts receivable, interest receivable, income receivable, and acceptances receivable. Other receivables shall be assessed at the time of closing for uncollectible amounts, and an appropriate amount of allowance for bad debts set aside, and shown in net amount. An individual item under other receivables exceeding five percent of total receivables shall be shown separately.
- "Bills purchased, discounts, and loans" means purchase and negotiation of bills, discounts, loans extended, and receivables on demand. As regards the balance of the above on the balance sheet date, a Bank shall assess their collectibles based on the actual situation, taking borrower credit risk into account, and set aside allowance for bad debts accordingly.
- "Long-term equity investments" means any investment in the stock of another enterprise where the stock of such invested company is not traded in an open market or does not have a definite market price, where the Bank intends to control the invested company or to establish a close relationship with it, or where the Bank has the positive intent and ability to hold the invested company's equity on a long-term basis. Long-term equity investments shall be valued and footnoted as follows:
- Except as otherwise provided in items 2 through 6 of this subparagraph, long-term equity investments shall be valued and presented, and consolidated financial statements shall be prepared in accordance with Statement of Financial Accounting Standards Nos. 5 and 7.
- Unless otherwise provided, the influence of a long-term equity investment on an invested company shall be assessed based on the percentage of voting rights in the invested company held by the Bank.
- Where the total assets or operating revenue of any individual subsidiary have not reached the standard for inclusion in the consolidated statements, if the total assets or operating revenue of each such subsidiary that have not reached the standard for inclusion in the consolidated statements reach in aggregate 30% or more of the total assets or operating revenue of the Bank, the subsidiaries whose total assets or operating revenue reaches 3% or more of that of the Bank shall be included in the consolidated statements. Unless the percentage subsequently decreases to 20% [or lower], such subsidiaries shall continue to be included in the consolidated statements. Any invested foreign subsidiary bank whose total assets and operating revenue are less than 10% of that of the parent bank shall still be included in the consolidated statements. For the subsidiaries not included in the consolidated statements, their company names, percentage of shareholder's equity that is held by the parent, and the reason why
they are not included in the consolidated statements shall be disclosed in the notes.
- The stock of a public company held by the Bank that has been approved for trading on over-the-counter markets under Article 5 of the GreTai Securities Market Regulations Governing Review of Emerging Stocks Traded on Over-the-Counter Markets (that is, emerging stocks) in which the Bank has no significant influence over such public company shall be valued under the cost method at period-end.
- If the total common stock and voting preferred stock held by the Bank in total represent more than 50% of the total voting rights of an invested company, or if the Bank directly or indirectly controls the operation of an invested company's personnel, financial, or business affairs as set forth in Article 369-2, paragraph 2, of the Company Act, the gain or loss arising from such investment shall be recognized in the period when its occurs.
- Where the beginning book balance of the long-term investments reaches 5% or more of the paid-in capital of the Bank; where the Bank holds 30% or more of the equity of the invested company, or the shareholding of the Bank, together with the combined shareholding in the invested company of any director, supervisor, and manager of, and any enterprise directly or indirectly controlled by the Bank, exceeds 50%; and where the Bank is among the three shareholders of the invested company with the highest shareholding or where the board chairperson or general manager of the invested company is appointed by the Bank, the gain or loss arising from such investment shall be recognized in the period when its occurs.
- Long-term equity investments shall be valued by the equity method. If the financial report prepared by an invested company fails to conform to generally accepted accounting principles in the ROC, the report shall first be adjusted to conform to such principles and the profit/loss on such investment recognized accordingly. Where the paid-in capital of an invested company reaches NT$30 million or more, or where its operating revenue reaches NT$50 million or more or 10% or more of the operating revenue of the Bank, the financial statements of such invested company shall be audited by a certified public accountant in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants as well as generally accepted auditing standards.
- The valuation basis for long-term equity investments shall be noted; if any such investment is pledged as collateral or otherwise subject to any restriction or limitation, such shall also be noted.
- "Other long-term investments" includes long-term bond investment and real estate investment.
- "Long-term bond investments" means investments on long-term bonds that are held to maturity. The valuation of unamortized premium or discount thereon shall be adjusted based on par value. The premium or discount shall be amortized in a rational and systematic manner.
- "Real estate investment" means, where a Bank's business activities include real estate investment, real estate available for sale, such as land and buildings, in which the Bank invests. Real estate investments are accounted for on the basis of acquisition cost. Any such investments in the nature of depreciation shall be amortized over the estimated useful life in a rational and systematic manner and the realizable value thereof shall be assessed at period-end. The amount by which the book value exceeds the net realizable value shall be recorded under real estate investment losses.
- "Fixed assets" means tangible assets purchased for use in the operation of the business and not intended for sale. The fixed assets account group mainly includes land, buildings, equipment, prepayments for land and buildings, prepayments for equipment, construction in progress, leasehold improvements, and other fixed assets for use in the operation of the business.
- Within the fixed assets classification, land, depreciable assets, and depletable assets shall be presented separately.
- The fixed assets shall be accounted for at acquisition or construction cost. However, such interest that arises from purchase of a pre-construction house or purchase of a fixed asset by cash capital increase shall not be capitalized. Fixed assets that have no value in use shall be recorded under other assets at the lower of net realizable value or book value. When there is no net realizable value, the cost and accumulated depreciation shall be offset against each other, with the difference recorded as a loss. If a fixed asset is still in use after the expiration of the useful life, such asset shall continue to be depreciated based on the salvage value.
- The leased assets shall be recognized and presented in accordance with Statements of Financial Accounting Standards No. 2.If a leased asset falls under an operating lease, the improvement made to such leased property is called leasehold improvement and shall be recorded as a fixed asset.
- The valuation basis for a fixed asset shall be indicated. If the fixed asset has been revalued, the date of revaluation and increased or decreased amount shall be recorded, and the acquisition cost and the revaluation increment shall be separately presented in the balance sheet. The reserve for land value increment tax allocated due to land revaluation increment shall be classified under other liabilities. The accrual of depreciation on fixed assets which have been revalued shall be based on the revalued value beginning from the day following the date of record of the revaluation.
- Fixed assets with the exception of land shall be charged off as depreciation or depletion expense over their estimated useful life in a rational and systematic manner. The accumulated depreciation or accumulated depletion of a fixed asset shall be presented as a fixed asset contra account.
- Leasehold improvement shall depreciated in a rational and systematic manner based on the lower of the estimated useful life and the lease term, and re-classified as expenses of each period according to its nature without interruption or reduction.
- For depreciable assets, the depreciation calculation methods shall be noted; if a fixed asset is provided as collateral for security, mortgage, or creation of lien, such shall be indicated.
- "Intangible assets" means assets that have no physical substance but have economic value, such as franchise and goodwill.
- Purchased intangible assets shall be recorded at actual cost. Goodwill arising from a business combination shall be treated in accordance with Statement of Financial Accounting Standards No. 25 Self-developed intangible assets, except for those subject to the capitalization requirements, shall be treated as a current-period expense.
- The valuation basis for intangible assets shall be noted. Intangible assets shall be amortized in a rational and systematic manner. The maximum amortization period shall be no more than 20 years; provided, however, that where there is clear supporting evidence, the actual life may be used. The amortization method for intangible assets shall be noted
- "Other assets" mean all the assets not falling within the above categories. When the amount of other assets exceeds 5% of total assets, the titles of the accounts shall be separately recorded.
- "Refundable deposits" means deposits used as security.
- "Foreclosed collaterals" means the collateral initially pledged or goods subsequently supplemented by a borrower that are seized to pay the debt as permitted by law or as agreed between the Bank and the borrower. Foreclosed collaterals are accounted for at foreclosure price and valued at period-end at the lower of cost or net realizable value.
- "Deferred income tax assets" means deferred income tax effects of deductible temporary differences.
- "Other miscellaneous assets" means all the "other assets" not falling within the above categories.