Chapter I General Principles Show Article 1 These Regulations are adopted under Article 14, paragraph 2 of the Securities and Exchange Act (the "Act"). Article 2 The financial reports of a securities firm shall be prepared in accordance with these Regulations and other applicable laws and regulations. Matters not provided for therein shall be governed by generally accepted accounting principles (GAAP). Article 3 When a securities firm simultaneously operates two or more of the businesses specified in Article 15 of the Act in accordance
with applicable requirements, the accounting matters for each such business shall be handled separately. When a securities firm concurrently operates futures business pursuant to Article 57 of the Futures Trading Act, the accounting matters for its futures segment shall be governed by applicable futures trading laws and regulations. When a securities firm concurrently operates bills finance business pursuant to Article 17 of the Act Governing Bills Finance Business, the accounting matters for
its bills finance segment shall be governed by applicable bills finance laws and regulations. When a securities firm concurrently operates specified trust business lines pursuant to Article 3 of the Trust Enterprise Act, the accounting matters for its trust segment shall be governed by applicable trust enterprise laws and regulations.
Article 4 A securities firm shall establish, and amend when necessary, an accounting system based on the nature of its accounting matters, the actual status and development of its business, and its management needs. Article 5 With the exception of a securities firm concurrently operated by a financial institution, which shall otherwise be subject to other applicable requirements, the appointment and discharge of the principal accounting officer of a securities firm shall be approved by a majority of the directors present at a board of directors meeting attended by a majority of the directors. Within 5 days after appointment or change, the securities firm shall file for registration with the Taiwan Stock Exchange (TWSE), the Taipei Exchange (TPEx), or the relevant securities dealers association, to be forwarded to the FSC for recordation. Article 6 Except as otherwise approved by the FSC, a securities firm shall use the calendar year as its financial year, with accounts closed on June 30 for the first half of the financial year and on December 31 for the whole financial year.
Article 7 "Financial reports" shall mean financial statements, statements of major accounting items, and any other disclosures and explanatory information helpful to the decision making of users. Article 8 If an enterprise from another industry concurrently operates securities business, when preparing financial reports in accordance with the requirements of the competent authority in charge of that industry, it shall additionally disclose a balance sheet, a statement of comprehensive income, accompanying notes, and statements of major accounting items for the independent securities segment prepared in accordance with Chapter II of these Regulations. This requirement does not apply, however, if the enterprise from another industry only concurrently operates proprietary bond trading. Article 9 Financial reports shall present fairly the financial position, financial performance, and cash flows of a securities firm without being misleading to
an interested party in making judgments and decisions. Article 10 The following shall apply when a securities firm makes an accounting change: Article 11 A securities firm shall prepare consolidated financial reports in accordance with Chapter II of these Regulations and IFRS 10, and shall prepare annual parent company only financial reports in accordance with Chapter IV of these Regulations. Article 12 The meaning of "parent," "subsidiary," "associate, " and "joint arrangement" as used in these Regulations shall be determined in accordance with IFRS 10, IFRS 11, and IAS 28. Article 13 Unless otherwise required by the FSC, the records retention period for the financial reports identified in these Regulations, or for the accounting documents, journals, ledgers, deeds, vouchers, and books based on which the financial reports are prepared, shall be subject to the Business Accounting Act. Article 13-1 In the case of a securities firm that is a foreign company's branch within the territory of the Republic of China, unless otherwise provided by the FSC, the functions required by these Regulations to be performed by the board of directors or the supervisors shall be performed by the responsible person of the branch within the territory of the Republic of China authorized by the head office or regional headquarters of the foreign company. Chapter II Financial Reports Section I Balance Sheet Article 14 Assets shall be properly classified. Current and non-current assets shall be distinguished. Article 15 Liabilities shall be properly classified. Current and non-current liabilities shall be distinguished. Article 16 Equity items, their components, and information to be disclosed in the balance sheet are as follows: Section II Statement of Comprehensive Income Article 17 A securities firm shall present all items of income and expense recognized in a period in a single statement of comprehensive income
displaying components of profit or loss and components of other comprehensive income. Section III Statement of Changes in Equity Article 18 As a minimum, the statement of changes in equity shall include the following: Section IV Statement of Cash Flows Article 19 A statement of cash flows provides users of financial statements with a basis to assess the ability of the securities firm to generate cash and cash equivalents and the needs of the securities firm to utilize those cash flows. Namely, it presents, through inflows and outflows of cash and cash equivalents, a summary report on the securities firm's operating, investing, and financing activities during the period. The presentation and disclosure of cash flow information shall be made in accordance with IAS 7. Section V Notes Article 20 To meet the objective of presenting full and complete information about the financial position, financial performance, and cash flows of a securities firm, financial reports shall contain explanatory notes disclosing the following: Article 21 Financial reports shall include explanatory notes on the following subsequent events
that occur between the balance sheet date and the date when the financial reports are authorized for issue: Article 22 A securities firm shall separately disclose in the notes to the financial reports information on the following events between the securities firm and its subsidiaries during
the current period, and on parent-subsidiary transactions: Article 23 A securities firm shall fully disclose information on related party transactions in accordance with IAS 24, and the following provisions shall be complied with: Chapter III Interim Financial Reports Article 24 Interim financial reports shall include interim financial reports for each of the following periods: Chapter IV Parent Company Only Financial Reports Article 25 A securities firm preparing parent company only financial reports shall apply accounting treatment conforming to the requirements of Chapter II of these Regulations, except when it has control
or significant influence over, or a joint venture interest in, an invested company, in which case it shall value the long-term equity investment using the equity method. Article 26 A securities firm preparing parent company only financial reports is not required to prepare segment information within the scope of IFRS 8. Article 27 A securities firm preparing parent company only financial reports
shall prepare statements of major accounting items. Article 28 A securities firm shall provide information on its business conditions in accordance with the following: Article 29 A securities firm shall disclose the following financial overview: Article 30 A securities firm shall review and analyze its financial position, and financial performance, and assess risk items. The required particulars are as follows: Article 31 A securities firm shall disclose the
following information regarding its attesting CPAs (external auditors): Article 32 A securities firm preparing and disclosing information on matters specified in Articles 28 through 31 of these Regulations shall request its CPA to issue a review opinion on these matters. Chapter V Consolidated Financial Statements and Business Combination Article 33 A securities firm shall prepare and present consolidated financial statements covering affiliated enterprises in accordance with the Regulations Governing Preparation of Consolidated Business Reports Covering Affiliated Enterprises, Consolidated Financial
Statements Covering Affiliated Enterprises, and Reports on Affiliations adopted by the FSC. Article 33-1 When a securities firm engages in any business combination, it shall determine the actual acquirer and whether it is an actual transfer of control in accordance with IFRS 3. Unless otherwise provided, it shall measure the acquiree's identifiable assets and liabilities at fair value on the date of acquisition, and recognize goodwill or a gain from a bargain purchase. The date of acquisition means the date when the acquirer obtains control from
the acquiree. Article 33-2 Goodwill which is recognized in connection with a business combination of a securities firm shall be tested for impairment at least annually in accordance with IAS 36. If there is any significant difference between the actual operation conditions of the acquired company after the business combination and the expected benefits at the time of acquisition, it shall be disclosed in the notes. Chapter VI (Deleted) Chapter VII Joint Arrangements Article 37 Joint arrangements are either joint operations or joint ventures, and have the following characteristics: Chapter VIII Supplementary Provisions Article 38 The format of the statements, schedules, and other documents relating to financial reports as identified in these Regulations shall be determined by the FSC. Article 39 The financial reports and related supplementary documents that a securities firm is required to file in accordance with Article 36 of the Act as applied mutatis mutandis under Article 63 thereof shall be filed in accordance with Article 21 of the Regulations Governing Securities Firms. Article 40 These Regulations shall come into force from the date of issuance, with the exception of Article 4, Article 7, Article 8, Article 11, paragraph 1, Article 12, Articles 14 to 18, Article 20, Article 22, Article 24, Article 25, Article 33, Article 35, and Article 37, as amended on 11 September 2014, which shall come into force from financial year 2015, Article 14, Article 17, Article 20, Article 23, Article 33-1, Article 33-2, and Article 39, as amended on 14 February 2017, which shall come into force from financial year 2017, the Articles as amended on 14 September 2017, which shall come into force from financial year 2018, Article 14, paragraph 4, subparagraphs 3 and 4, and paragraph 6, Article 15, Article 20, Article 27, as amended on 30 July 2018, which shall come into force from financial year 2019, and the articles amended on 18 March 2020, which shall come into force from financial year 2020. What are the rules of financial reporting?Financial statements need to reflect certain basic features: fair presentation, going concern, accrual basis, materiality and aggregation, and no offsetting. Financial statements must be prepared at least annually, must include comparative information from the previous period, and must be consistent.
Which of the following terms refers to the formal recording and reporting of revenues and financial statements?Accounting is the process of recording, summarizing, and reporting financial transactions to oversight agencies, regulators, and the IRS. Financial performance measures how a firm uses assets from operations to generate revenue.
Which of the following terms refers to the recording of financial accounting transactions?Bookkeeping is the process of recording your company's financial transactions into organized accounts on a daily basis. It can also refer to the different recording techniques businesses can use.
What do you mean by GAAP?What Is GAAP? Generally Accepted Accounting Principles (GAAP or US GAAP) are a collection of commonly-followed accounting rules and standards for financial reporting.
|