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Taiwan |
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Update for April 2008
Update for January 2008
Update for April 2007
Update for February 2007
Update for October 2006
Update for April 2006
Update for April 2005
Update for January 2005
Update for October 2004
Update for July 2004
Update for January 2004
Update for April 2003
Update for January 2003
Update for October 2002
Update for October 2001
Update for October 2000
Taipei:
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Financial Reporting Framework in Taiwan (Updated January 2008)
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Accounting standards in Taiwan are developed by the Accounting Research and Development Foundation (ARDF). English language summaries are available at www.ardf.org.tw. As of January 2008, the following standards have been issued:
| Number | Title | Date Issued or Last Revised |
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| SFAS 1 | Conceptual Framework for Financial Accounting and Preparation of Financial Statements | 2006.07.20
| | SFAS 2 | Leases | 2000.11.23 |
| SFAS 3 | Borrowing Costs | 2001.01.11 |
| SFAS 5 | Long-term Investments under Equity Method | 2005.12.22 |
| SFAS 6 | Related Party Disclosures | 1985.06.15 |
| SFAS 7 | Consolidated Financial Statements | 2006.11.30 |
| SFAS 8 | Accounting Policies, Changes in Accounting Estimates and Errors | 2006.07.20 |
| SFAS 9 | Contingencies and Subsequent Events | 1986.09.15 |
| SFAS 10 | Inventories | 2007.11.29 |
| SFAS 11 | Construction Contracts | 1987.07.20 |
| SFAS 12 | Accounting for Income Tax Credits | 2001.11.08 |
| SFAS 13 | Accounting by Debtors and Creditors for Troubled Debt Restructuring | 1988.06.01 |
| SFAS 14 | The Effects of Changes in Foreign Exchange Rates | 2005.09.22 |
| SFAS 15 | Disclosure of Accounting Policies | 2005.09.22 |
| SFAS 16 | Preparation of Financial Forecasts | 1989.12.28 |
| SFAS 17 | Statement of Cash Flows | 2005.09.22 |
| SFAS 18 | Accounting for Pensions | 2005.09.22 |
| SFAS 19 | Development Stage Accounting | 2002.03.21 |
| SFAS 20 | Segment Reporting | 1992.06.25 |
| SFAS 21 | Accounting for Convertible Bonds | 1993.04.15 Withdrawn 2005 |
| SFAS 22 | Income Taxes | 2005.09.22 |
| SFAS 23 | Interim Financial Reporting | 1999.07.29 |
| SFAS 24 | Earnings Per Share | 2001.11.01 |
| SFAS 25 | Business Combinations | 2006.11.30 |
| SFAS 26 | Accounting for Bonds Issued with Stock Purchase Warrants | 1996.03.07 Withdrawn 2005 |
| SFAS 27 | Disclosure of Financial Instruments | 1997.06.20 Withdrawn 2005 |
| SFAS 28 | Disclosures in the Financial Statements of Banks | 2005.09.22 |
| SFAS 29 | Accounting for Government Grants and Disclosure of Government Assistance | 1999.06.24 |
| SFAS 30 | Accounting for Treasury Stocks | 2006.06.22 |
| SFAS 31 | Interests in Joint Ventures | 2005.09.22 |
| SFAS 32 | Accounting for Revenue Recognition | 2005.09.22 |
| SFAS 33 | Accounting for Transfers of Financial Assets and Extinguishments of Liabilities | 2003.05.22 |
| SFAS 34 | Financial Instruments: Recognition and Measurement | 2005.09.22 |
| SFAS 35 | Impairment of Assets | 2006.11.30 |
| SFAS 36 | Financial Instruments: Disclosure and Presentation | 2005.06.23 |
| SFAS 37 | Intangible Assets | 2006.07.20 |
| SFAS 38 | Non-current Assets Held for Sale and Discontinued Operations | 2006.11.30 |
| SFAS 39 | Share-based Payment | 2007.08.23 |
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April 2008 Update
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Chinese translation of Deloitte Guide to IFRS 2
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Deloitte & Touche in Taiwan has published the Chinese translation of A Guide to IFRS 2 Share-based Payment. As with the English Language Version, the guide not only explains the detailed provisions of IFRS 2 but also deals with its application in many practical situations. In addition, it includes a summary of accounting for share-based payment under Taiwan GAAP and an comparison against IFRS 2. The Chinese translation of A Guide to IFRS 2 Share-based Payment can be purchased by email to fltsai@deloitte.com.tw or On Line (Chinese). |
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January 2008 Update
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Accounting Standards:
Presented above is a table listing the Taiwanese Statements of Financial Accounting Standards issued as of January 2008.
SFAS 39 Share-based Payment, which was based on IFRS 2, was issued on 23 August 2007 and effective for annual periods beginning on or after 1 January 2008
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Amendment of SFAS 10 Inventories, which resembles IAS 2, was released on 29 November 2007 and will be effective for annual periods beginning on or after 1 January 2009.
SFAS 40 Insurance Contracts is currently under first reading procedures. It deals with the principles in IFRS 4 Insurance Contracts.
Convergence Plan
On 31 October 2007, the ARDF published its Project Plan Concerning the Convergence with IFRSs (PDF 31k).
Comparison of Taiwanese GAAP and IFRSs
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Deloitte & Touche in Taiwan has published the 2nd edition of Comparisons of Republic of China (ROC) GAAP and IFRSs, which details the differences between ROC Statements of Financial Accounting Standards and IFRSs as of 30 November 2007. This booklet is written in both Chinese and English and provides a quick overview of the difference between ROC GAAP and IFRSs that are commonly found in practice. Comparisons of ROC GAAP and IFRSs can be purchased by email to fltsai@deloitte.com.tw or On Line (Chinese).
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April 2007 Update
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Accounting Standards:
SFAS 39 Share-based Payment was under the first reading starting 25 January 2007.
SFAS 38 Non-Current Assets Held for Sale and Discounted Operations was issued on 30 November 2006 and effective for periods beginning on or after 1 January 2007.
Amendments of SFAS 7 Consolidated Financial Statements, SFAS 25 Business Combinations - Accounting Treatment under Purchase Method, and SFAS 35 Accounting for Impairment of Assets were also released on 30 November 2006 to correspond with the issue of SFAS 38.
SFAS 37 Intangible Assets was issued on 20 July 2006 and effective for periods beginning on or after 1 January 2007.
Auditing Standards:
Statements on Standards for Valuation Service was under the third reading starting 6 March 2007.
Auditing Standard No. 44 Audit Documentation was under the first reading starting 26 December 2006.
Auditing Standard No. 43 The Auditor's Responsibility to Consider Fraud in an Audit of Financial Statements was issued on 1 September 2006 and became effective for audits of financial statement for periods ending on or after 31 December 2006.
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February 2007 Update
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Comparison of Taiwanese GAAP and IFRSs
Deloitte & Touche in Taiwan has published Comparisons of Republic of China (ROC) GAAP and IFRSs, which details the differences between ROC Statements of Financial Accounting Standards and IFRSs as of 30 September 2006. This booklet is written both in Chinese and English and is a line-item by line-item comparison. It provides a quick overview of the difference between ROC GAAP and IFRSs that are commonly found in practice. Comparisons of ROC GAAP and IFRSs can be purchased by email to fltsai@deloitte.com.tw or On Line (Chinese).
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October 2006 Update
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Update on accounting standards in Taiwan
On 4 October 2006, the Accounting Research and Development Foundation (ARDF) of Taiwan sponsored the 2006 International Conference on Accounting Standards in Taipei. The ARDF, established in 1984, has been designated by the Taiwan Securities and Futures Bureau to develop Taiwanese GAAP. The chairman of the Foundation, Dr Rong-Ruey Duh, made a comprehensive keynote presentation on Convergence with IFRSs: The Experience of Taiwan (PDF 111k).
The presentation reviews:
- the process for setting accounting standards in Taiwan,
- the current state of convergence with IFRSs,
- the factors affecting convergence, and
- the outlook in Taiwan.
We are pleased to post the presentation with the kind permission of Dr Duh. The presentation is copyright 2006 by the Accounting Research and Development Foundation, Taiwan, all rights reserved, and should not be reproduced without the author's permission.
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April 2006 Update
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In December 2005, the Accounting Research and Development Foundation (ARDF) in Taiwan revised Statement of Financial Accounting Standards No. 25 Business Combinations - Accounting Treatment under Purchase Method to adopt the IFRS 3 approach to goodwill. Under IFRS 3, goodwill is not amortised but, instead, is tested for impairment at least annually. This revision to SFAS 25 is effective for financial years beginning on or after 1 January 2006. Earlier application is not permitted. Financial statements that had been prepared in accordance with the provisions of SFAS No.25 prior to the revision do not have to be restated retroactively.
In the fourth quarter of 2005, the ARDF also revised SFAS No.1 Conceptual Framework for Financial Accounting and Preparation of Financial Statements; SFAS No.5 Long-Term Investments in Equity Securities; SFAS No.7 Consolidated Financial Statements; and SFAS No. 35 Accounting for Asset Impairment. The revisions, which were made for purposes of harmonising those standards with SFAS No. 25, should be applied to accounting periods beginning on or after 1 January 2006. Earlier application is not permitted.
The ARDF is now framing SFAS No.37 Accounting for Intangible Assets. This standard, which is in line with IAS No. 38 Intangible Assets, will specify standards for recognising, measuring, and disclosing information about intangibles.
Furthermore, SFAS No. 34 Accounting for Financial Instruments, and SFAS No. 36 Presentation and Disclosure of Financial Instruments have been adopted effective 1 January 2006.
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April 2005 Update
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On 30 December 2004, the Accounting Research and Development Foundation (ARDF) in Taiwan revised Statement of Financial Accounting Standards (SFAS) No. 1, The Framework of Financial Accounting Concepts and Financial Report Preparation, to make it consistent with SFAS No. 34, Accounting for Financial Instruments. SFAS No. 34 applies to accounting periods beginning on or after 1 January 2006, and earlier application is not permitted.
The ARDF is now framing SFAS No.36, Presentation and Disclosure of Financial Instruments. This standard, which is in line with IAS No. 32, Financial Instruments: Disclosure and Presentation, specifies the standards for presenting and disclosing of financial instruments. Similar to SFAS No. 34, SFAS No. 36 should be adopted at the start of 2006, and earlier application is not permitted.
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January 2005 Update
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On 9 December 2004, the Accounting Research and Development Foundation (ARDF) in Taiwan has revised Statement of Financial Accounting Standards No. 7 (SFAS No. 7) Consolidated Financial Statements and SFAS No. 5 Long-Term Investments in Equity Securities. SFAS No.7, which is based on IAS No. 27 (Consolidated and Separate Financial Statements), must be applied to financial statements for the financial year beginning on or after 1 January 2005, with earlier application permitted. If an entity applies this standard to a period beginning before 1 January 2005, the entity must disclose that fact.
In an effort to harmonise with SFAS No. 7, SFAS No. 5 has been revised. That revision should be applied to financial statements for the financial year beginning on or after 1 January 2005, with earlier application permitted. Financial statements that had been prepared in accordance with the provisions of SFAS No. 5 prior to the revision do not have to be restated retroactively to follow the revised statement.
The ARDF also revised SFAS 1, The Framework of Financial Accounting Concepts and Financial Report Preparation, in the fourth quarter of 2004. That revision, which is in an effort to harmonise with SFAS No. 34, shall be applied to accounting periods beginning on or after 1 January 2006, and earlier application is not permitted. The ARDF invited comments on SFAS No. 1, and the deadline for comments was 15 November 2004.
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October 2004 Update
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On 1 July 2004, the Accounting Research and Development Foundation (ARDF) in Taiwan issued a new standard, Statement of Financial Accounting Standards No. 35 Accounting for Impairment of Assets. The objective of this statement is to prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. SFAS No. 35, which is in line with International Accounting Standard No. 36 Impairment of Assets, should be applied to financial statements for the fiscal year beginning on or after 1 January 2005, with earlier application permitted.
The ARDF has also issued an exposure draft of the proposed revision of SFAS No. 7 Consolidated Financial Statements. This revision, which is based on IAS No. 27 Consolidated and Separate Financial Statements, should be applied to accounting periods beginning on or after 1 January 2005, with earlier application permitted. If an entity applies this standard to a period beginning before 1 January 2005, it should disclose this fact. The ARDF invited comments on SFAS No. 7, and the deadline for comments was 15 October 2004.
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July 2004 Update
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In the second quarter of 2004, the Accounting Research and Development Foundation (ARDF) in Taiwan issued an exposure draft of Statement of Financial Accounting Standards No. 35, Accounting for Impairment of Assets. This proposed statement would provide accounting standards for recognising an impairment loss, specify when an entity should reverse an impairment loss, and prescribe certain disclosures. SFAS No. 35, which is in line with IAS No. 36 Impairment of Assets, would apply to accounting periods beginning on or after 31 December 2005, with earlier application permitted.
The ARDF invited comments on SFAS No. 35, and the deadline for comments was 11 June 2004.
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January 2004 Update
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On 25 December 2003, the Accounting Research and Development Foundation in Taiwan issued Statement of Financial Accounting Standards (SFAS) No. 34, Accounting for Financial Instruments, which will take effect on January 1, 2006. SFAS No. 34 defines the standards for recognising and measuring financial instruments and disclosing related information in the financial statements. Those standards are in line with IAS 39 as well as a small portion of the proposed amendments to IAS 32 and 39. When those proposed amendments to IAS 32 and 39 are revised and approved, SFAS No. 34 will be changed accordingly.
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April 2003 Update
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The Accounting Research and Development Foundation (ARDF) of Taiwan has issued an exposure draft of proposed SFAS 33, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, in the first quarter of 2003. The exposure draft is based on IAS 39, and focuses on the issues of accounting for transfers and servicing of financial assets and extinguishments of liabilities. Comment deadline is 31 March 2003.
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January 2003 Update
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The Accounting Research and Development Foundation (ARDF) of Taiwan has revised SFAS 1, The Framework of Financial Accounting Concepts and Financial Report Preparation, in the fourth quarter of 2002. The revised standard is effective for accounting periods ending on or after 31 December 2003. In an effort to harmonise Taiwan Accounting Standards with International Financial Reporting Standards, this revision is based on the IASC Framework and intended to serve as a guide to ARDF in developing accounting standards and as a guide to resolve accounting issues that are not addressed directly in the Statements of Financial Accounting Standards in Taiwan.
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October 2002 Update
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The Accounting Research and Development Foundation (ARDF) has issued one new standard on June 30, 2002 - SFAS 32, Accounting for Revenue Recognition. This SFAS is closely modeled on IAS 18, Revenue, prescribing the accounting treatment for revenue arising from certain types of transactions and events. SFAS 32 is effective for accounting periods beginning on and after 31 December 2002, with early application permitted.
SFAS 19, Development Stage Accounting, has been revised to eliminate differences with the equivalent IAS. The revision is effective for periods beginning on and after 31 December 2002, with early application permitted.
The ARDF has also issued an exposure draft of proposed revision of SFAS 1, Summary of Generally Accepted Accounting Principles. The revision is based on the IASC Framework and is intended to guide ARDF in developing accounting standards and to guide in resolving accounting issues that are not addressed directly in a Statement of Financial Accounting Standard.
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October 2001 Update
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The current Taiwan GAAP No. 24, Earnings Per Share, is being revised and is expected to be reissued in October 2001. The purpose of the revision is to bring it more in line with IAS 33 and FASB 128. The significant differences between the current standard and expected standard are as follows:
- The notion of common stock equivalents is eliminated
- Basic EPS replaces the current Primary EPS, and Diluted EPS replaces the current Fully Diluted EPS.
- Potential shares will be redefined as in IAS 33.
- Basic EPS will be calculated by dividing the net profit or loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The calculation of diluted earnings per share will be consistent with the calculation of basic earnings per share while giving effect to all dilutive potential ordinary shares that were outstanding during the period.
- Potential ordinary shares will be treated as dilutive when, and only when, their conversion to ordinary shares would decrease net profit per share from continuing ordinary operations. That is, the effects of anti-dilutive potential ordinary shares must be ignored.
- Companies will be required to use net profit from continuing ordinary activities as 'the control number' in determining whether potential ordinary shares are dilutive or anti-dilutive.
- Contracts that require that the reporting entity repurchase its own stock, such as written put options and forward purchase contracts, will be reflected in computing diluted EPS if the effect is dilutive. If the exercise price is above the average market price for the period, the potential dilutive effect on EPS will be computed using the reverse treasury stock method of FASB 128.17-24.
- The revised standard will include provisions for restating EPS that are consistent with IAS 33.
- The EPS disclosure requirements will be expanded to be consistent with those in IAS 33 and FASB 128. Among other things, the revised standard will require a company to disclose the following:
- a. The amounts used as the numerators in calculating basic and diluted earnings per share, and a reconciliation of those amounts to the net profit or loss for the period; and
- b. The weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share, and a reconciliation of these denominators to each other.
- c. Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic EPS
in the future that were not included in the computation of diluted EPS because to do so would have been antidilutive for the period(s) presented.
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October 2000 Update
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The Securities and Exchange Commission of the Taiwan Ministry of Finance sets the financial reporting requirements for public companies. The Ministry of Economic Affairs issues accounting regulations for both public and nonpublic companies. An independent accounting standards board (Accounting Research and Development Foundation, or ARDF), established in 1984, publishes Statements of Financial Accounting Standards (SFAS) that are recognised by the Ministry of Finance. ARDF also publishes interpretive guidance in the form of Supplementary Explanation Statements.
Statements that have been published and that will be effective for financial years ending on or after 31 December 2000:
- SFAS 17, Statement of Cash Flows (Revised 9 December 1999)
- SFAS 22, Accounting for Income Taxes (Revised 11 November 1999)
- SFAS 23, Interim Financial Reporting and Disclosures (revised on 29 July 1999)
- SFAS 28, Disclosures in the Financial Statements of Banks (issued on 31 March 1999)
- SFAS 29, Accounting for Government Grants (issued on 24 June 1999)
Statements that have been published and that will be effective for financial years ending on or after 31 December 2001:
- SFAS 30, Accounting for Treasury Stock (issued on 7 July 2000)
- SFAS 31, Accounting for Joint Ventures (issued on 7 September 2000)
- Statements that are under revision:
- SFAS 3, Capitalisation of Interest Cost (secondary revision)
- SFAS 18, Accounting for Pensions (revision)
Planned future projects
- Earnings per Share (amending the existing standard)
- Accounting for Warrants
- Review of the following statements to determine whether revision is necessary:
- SFAS 1, Summary of Generally Accepted Accounting Principles
- SFAS 6, Disclosure of Related Party Transactions
- SFAS 8, Accounting Changes and Prior Period Adjustments
- SFAS 9, Contingencies and Subsequent Events
- SFAS 12, Accounting for Income Tax Credits
- SFAS 19, Development Stage Accounting
- SFAS 21, Accounting for Convertible Bonds
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