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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II CONTENTS OF INTERIM FINANCIAL REPORTS CHAPTER III RECOGNITION AND MEASUREMENT CHAPTER I GENERAL PROVISIONS Article 1. For the purpose of regulating the contents of interim financial reports, and the principles to be observed in the preparation for the interim financial reports, these Standards are formulated in accordance with the Accounting Standards for Enterprises-Basic Standards. Article 2. An interim financial report refers to a financial report prepared on the basis of an interim period. An interim period refers to a reporting period which is shorter than a full accounting year. CHAPTER II CONTENTS OF INTERIM FINANCIAL REPORTS Article 3. An interim financial report shall at least contain a balance sheet, an income statement, a cash flow statement and explanatory notes. The balance sheet, income statement and cash flow statement included in an interim financial report shall be presented in their complete forms. They shall conform to the annual accounting statements of the prior accounting year in both format and contents. If the format and content of the financial statements have been changed due to the adoption of new accounting standards for the current accounting year, the interim accounting statements shall be prepared in accordance with the new format and content. In addition, the format and content of comparative accounting statements for the prior accounting year shall also be changed accordingly. The basic earnings per share and the diluted earnings per share shall be separately presented in the interim income statement. Article 4. Where consolidated financial statements were prepared for the prior year, consolidated financial statements shall be prepared by the end of the interim period. If a financial report for the prior year includes statements of the parent company besides the consolidated financial statements, the interim financial report shall include the financial statements of the parent company as well. If a financial report for the prior year includes consolidated financial statements, but if all subsidiaries which were included in the consolidation scope were disposed during the period of interim reporting, the interim financial report is only required to provide the financial statements of the parent company, but the comparative financial statements for the prior year shall still include the consolidated financial statements unless there is no subsidiary in the comparative interim period of the prior year. Article 5. An interim financial report shall provide comparative financial statements according to the following provisions: (1) The balance sheet statement at the end of the current interim period and the balance sheet statement at the end of the prior year; (2) The income statement for the current interim period, the income statement for the period from the beginning of the year to the end of the current interim period, as well as the income statement of the comparative period of the prior year; and (3) The cash flow statement for the period from the beginning of the year to the end of the current interim period, and the cash flow statement for the period from the beginning of the prior year to the end of the current interim period. Article 6. Where any adjustment or revision is made to the line items on the financial statements included in an interim report, the relevant amounts of the line items on the comparative financial statements for the prior year shall be re-classified according to the requirements of the interim financial statements for the current year, and the reasons and details of the reclassification shall be disclosed in the notes. If the reclassification is impracticable, the reasons shall be given in the notes. Article 7. The notes to an interim financial report shall be based on the period from the beginning of the year to the end of the current interim period, shall disclose any significant events or transactions, which occurred after the balance sheet date of the prior year and which may be helpful to the understanding of any changes in the financial status, operating performance and cash flows of the enterprise. The enterprise shall, in its notes, disclose any significant events or transactions, which occurred after the balance sheet date of the prior year and which may be helpful to the understanding of its financial status, operating performances and cash flows during the current interim period. Article 8. The notes to an interim financial report shall at least include the following information: (1) A declaration that the accounting policies adopted for the interim financial statements are consistent with those for the financial statements of the prior year. If there is a change in accounting policy, the details, reasons and effect of the change shall be given. If it is unable to make a retrospective adjustment, the reasons shall be given; (2) The details, reasons and effect of changes in accounting estimates, or if the effect cannot be determined, the reason shall be given; (3) The nature of any prior period error and the amount of correction; if the retrospective restatement is impractical, the reasons shall be given; (4) The seasonal or cyclical features of the enterprise's operations; (5) The details of changes in related enterprises where a control relationship exists. Where there are related party transactions, the nature of the related party relationship, the types of transactions and the essential elements of the transactions shall be disclosed; (6) The details of changes in the consolidation scope for the consolidated financial statements; (7) The explanatory comments about the financial statement items that are abnormal in terms of their nature or amounts; (8) The details of issuance, repurchase, and repayment of securities; (9) The details of any distribution of profits to the enterprise's owners, including profits distributed and distribution proposed or approved but not yet made in the interim period; (10) If any segment reporting information is required to be disclosed under the Accounting Standards for Enterprises No. 35-Segment Reporting, the segment revenue and segment profit (loss) under primary segment reporting shall be disclosed; (11) The non-adjusting events occurring during the period from interim balance sheet date to the date on which the interim financial report is authorized for issuance; (12) The details of any changes in contingent liabilities and contingent assets after the prior year's balance sheet date; (13) A description of any changes in the composition of the enterprise such as business combination, acquisition or disposal of long-term investments for which the enterprise can exercise significant influence, has joint control or control over the investees, or termination of business operations; and (14) Other significant transactions or events such as transfer and sale of significant long-term assets, significant acquisitions of fixed assets and intangible assets, significant research and development disbursements, significant assets impairment losses, etc. When an enterprise provides information about the related party transactions, and segment revenue and segment profit (loss) as mentioned in the preceding items (5) and (10), it shall simultaneously provide the figures of the current interim period (or the end of the current interim period), the figures during the period from the beginning of the current year to the end of the current interim period, the comparative figures of the comparative current period of the prior year (or the end of the comparative period), and comparative figures during the period from the beginning of the comparative year to the end of the current interim period. Article 9. In the recognition, measurement and reporting the each line item on the interim financial statements, the enterprise shall base its judgment about the importance of each line item on the interim financial figure other than on the annual financial figure. As compared with annual financial figures, the interim accounting measurement may rely on the estimates to a greater extent, however, the enterprise shall ensure that the interim financial report it provides includes the relevant important information. Article 10. If an estimate of an amount reported in an interim period is changed significantly during the final interim period of the accounting year but a separate financial report is not published for that final interim period, the details, reasons, and amount of that change in estimate should be disclosed in the notes to the annual financial statements for that accounting year. CHAPTER III RECOGNITION AND MEASUREMENT Article 11. The accounting policies adopted by an enterprise for its interim financial statements shall be consistent with those as adopted for its annual financial statements. If there any accounting policy changes after the prior year's balance sheet date and if any new accounting policy will be adopted for the annual financial statements, the new accounting policy shall be adopted for the interim financial statements and shall be treated in accordance with Article 14 of these Standards. Article 12. The interim accounting measurement shall be based on the period from the beginning of the year to the end of the current interim period. The frequency of the financial reports shall not affect the measurement of the annual results. Within a same accounting year, if the accounting estimate for an accounting statement item reported in a prior interim period changes in the subsequent interim period, such a change should be reflected in the subsequent interim accounting statements, but the amount of the item as reported in the prior interim period should not be changed. In the mean while, the change in the accounting estimate shall also be disclosed in the notes according to Article (2) or Article 10 of these Standards. Article 13. An enterprise should recognize and measure revenues that are received seasonally, cyclically or occasionally when they are earned and shall not anticipate or defer such revenues in interim accounting statements unless anticipation or deferral would be acceptable at the end of the accounting year. An enterprise shall recognize and measure costs that are incurred unevenly during an accounting year when they are incurred and shall not anticipate or defer such costs in the interim accounting statements unless the anticipation or deferral would be acceptable at the end of the accounting year. Article 14. If there is any change in an accounting policy of an enterprise during the interim period, it shall be treated in accordance with the Accounting Standards for Enterprises No. 28-Changes in Accounting Policies and Accounting Estimates, and Corrections of Errors and shall be disclosed in the notes pursuant to Article 8 (1) of these Standards. If the cumulative effect of a change in accounting policy can be reasonably determined and if the change in accounting policy affects the figures of any line items on the interim financial statements for the prior interim period in the current accounting year, these items shall be adjusted retrospectively as if the same accounting policy has been adopted throughout the current accounting year. In the mean while, the comparative financial statements of the prior year shall also be adjusted accordingly. |
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