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Article 9
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The liability account categories on the balance sheet, content thereof, and matters to be noted are as follows:
- Liabilities shall be appropriately categorized. Current and non-current liabilities shall be separated. However, the same shall not apply to specific industries where the breakdown of liabilities by liquidity is inappropriate. The total amount of liabilities anticipated for settlement within 12 months after the balance sheet date and in excess of 12 months after the balance sheet date shall respectively be presented in financial statements or disclosed in footnotes.
- "Current liabilities" means liabilities that must be settled within 12 months after the balance sheet date, or if incurred through operations, are expected to be settled within one business cycle in the normal course of business, such as loans and overdrafts from banks and other enterprises in the same industry, liabilities from bills and bonds under repurchase agreements, accounts payable, advance receipts, and other miscellaneous payables.
- "Loans and overdrafts from banks and enterprises in the same industry" means the amount of short-term loans from banks and other enterprises in the same industry bearing interest on a daily basis and the amount of overdrafts therefrom within the line of credit under contract.
- "Liabilities from bills and bonds under repurchase agreements" means any dollar amount actually received from the trading counterpart in a repurchase transaction in bills and bonds.
- Accounts payable shall be valued at present value. However, those which result from operating activities and which become mature within one year may be valued at book value. Accounts payable resulting from operating activities shall be separately recorded from other accounts payable resulting from non-operating activities. Accounts of large value payable to related parties shall be separately disclosed.
- "Advance receipts" means all the amounts received in advance. Advance receipts shall be separately recorded based on principal classification, and relevant agreement, if any, shall be noted.
- "Other payables" means amounts payable other than accounts payable, such as taxes payable, salaries payable, and dividends. For the dividends payable passed by the resolution of the shareholders meeting, the distribution method shall be noted. When loss and profit are calculated at the end of each period, the estimated income tax payable calculated based on taxable income shall be recorded under other payables. If any item under other payables exceeds 5% of total payables, it shall be separately recorded based on the nature or party concerned.
- "Other current liabilities" means all the current liabilities not falling within the above categories, such as bonds payable and long-term loans which become mature within one year. Any current liability whose amount does not exceed 5% of total current liabilities may be incorporated into other current liabilities.
- "Long-term liabilities" means liabilities due at least 12 months after the balance sheet date, such as bonds payable and long-term payables.
- "Bonds payable" means bonds issued by the Bills Finance Company. For bonds issued, the approved total amount, interest rate, maturity date, name of collateral, book value, issuing area, and other relevant terms and restrictions shall be indicated in the footnotes. If the bonds issued are convertible bonds, the method of conversion and the amount converted shall also be noted. The premium and discount on bonds payable are valuation accounts for bonds payable and shall be classified as an addition or deduction on bonds payable and amortized over the circulation period of the bonds in a rational and systematic manner as an adjustment to interest expenses.
- Other long-term payables shall be valued at present value.
- For long-term liabilities due within 12 months after the balance sheet date, where the original loan contract period was in excess of 12 months and the enterprise intends to continue long-term refinancing, and where refinancing or loan extension had been accomplished before the financial statement submission date, the loan shall continue to be listed as a long-term liability, and footnote disclosure shall be made in the financial statement specifying the amount of the loan and the relevant facts.
- Long-term liabilities shall be listed as current liabilities when, under a given loan contract, breach of a specific clause of the loan contract requires immediate repayment. However, when consent has been obtained from the creditor prior to the financial statement submission date that the creditor will not enforce such a clause, and when there is little possibility that such a breach will be committed within 12 months after the balance sheet date, then the loan may continue to be listed as a long-term liability.
- "Other liabilities" means liabilities not falling within the above categories, such as operating and liability reserve, other miscellaneous liabilities, etc. When the amount of other liabilities exceeds 5% of total liabilities, the title of the accounts shall be separately recorded.
- "Reserve for guarantee obligations" means a sufficient amount of reserve that the Bills Finance Company duly sets aside to cover the potential losses on credit assets it assesses when calculating account balance.
- "Securities trading loss reserve" means the required amount that the Bills Finance Company engaged in proprietary bonds trading allocates on a monthly basis as trading loss reserve from 10% of the net profits arising from its trading in securities, except that such allocation is not required for the part of the aggregate amount reaching NT$200 billion and more. The reserve may not be employed except for writing off the actual net loss arising from proprietary trading in bonds.
- "Pension reserve" means accrued pension liabilities.
- "Deposits received" means all other deposits placed [with the Bills Finance Company].
- "Deferred income tax liabilities" means deferred income tax effects of taxable temporary differences.
- "Other miscellaneous liabilities" means the liabilities not falling within the above categories.
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