| Article 9 |
Assets shall be properly classified. Current and non-current assets shall be distinguished, except when a presentation of all assets in order of liquidity provides information that is reliable and more relevant.
For each asset line item, the total amount expected to be recovered within 12 months after the balance sheet date and the total amount expected to be recovered more than 12 months after the balance sheet date shall be separately presented in the financial reports or disclosed in the notes.
As a minimum, the balance sheet shall include the following asset line items:
1. Current assets: An entity shall classify an asset as current when it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle; when it holds the asset primarily for the purpose of trading; when it expects to realize the asset within 12 months after the balance sheet date; or when the asset is cash or a cash equivalent, unless the asset is to be used for an exchange or to settle a liability, or otherwise remains restricted, at more than 12 months after the balance sheet date.
(1) Cash and cash equivalents: Cash on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
An issuer shall disclose the components of cash and cash equivalents and the policy which it adopts in determining the composition of cash and cash equivalents.
(2) Financial assets at fair value through profit or loss – current: Financial assets that meet any of the following conditions:
(i) Financial assets held for trading.
(ii) Financial assets that, except for those designated as hedged items under hedge accounting requirements, are designated upon initial recognition as at fair value through profit or loss.
A financial instrument shall be classified as a financial asset held for trading if:
(i) It is acquired principally for the purpose of sale in the near term.
(ii) It is, upon initial recognition, a part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent pattern of short-term profit-taking.
(iii) It is a derivative financial asset, except for a derivative financial asset that is a financial guarantee contract or a designated and effective hedging instrument.
Financial assets at fair value through profit or loss shall be measured at fair value.
(3) Available-for-sale financial assets – current: Financial assets that are not derivative financial assets and that meet any of the following conditions:
(i). Financial assets that are designated as available-for-sale.
(ii). Financial assets that are not:
(a) Financial assets measured at fair value through profit or loss.
(b) Held-to-maturity financial assets.
(c) Financial assets measured at cost.
(d) Bond investments for which no active market exists.
(e) Receivables.
Available-for-sale financial assets shall be measured at fair value.
(4) Derivative financial assets for hedging – current: Any derivative financial asset that is a designated and effective hedging instrument under hedge accounting requirements. Any such asset shall be measured at fair value.
(5) Financial assets measured at cost – current: Financial assets that meet all of the following conditions:
(i) An investment in equity instruments that do not have a quoted price in an active market, or a derivative instrument that is linked to such equity instruments that do not have a quoted price in an active market and that shall settled by delivery of such equity instruments.
(ii) The fair value cannot be reliably measured.
(6) Bond investments for which no active market exists – current: Bond investments that do not have a quoted price in an active market and with fixed or determinable payments, and that meet all of the following conditions:
(i) Not classified as at fair value through profit or loss.
(ii) Not designated as available-for-sale.
(iii) There are no other reasons except for credit worsening that are likely to cause the holder to not be able to recover almost all of the original investments.
Bond investments for which no active market exists shall be measured at amortized cost.
(7) Notes receivable: All notes receivable.
Notes receivable shall be measured at amortized cost using the effective interest method. However, short-term notes receivable with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
Discounted or transferred notes receivable shall be deducted and the deduction shall be noted.
Notes receivable arising from operating activities shall be presented separately from other notes receivable arising from non-operating activities.
Notes receivable from related parties in significant amounts shall be presented separately.
Notes provided as security shall be indicated in the notes to the financial reports.
At each balance sheet date an assessment shall be made of whether there is any uncollectible amount from notes receivable and an appropriate allowance for doubtful debts shall be made.
(8) Trade receivables: Claims resulting from sale of goods or services.
Trade receivables shall be measured at amortized cost using the effective interest method. However, short-term trade receivables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
Trade receivables from related parties in significant amounts shall be presented separately.
At each balance sheet date an assessment shall be made of whether there is any uncollectible amount from trade receivables and an appropriate allowance for doubtful debts shall be made.
Unrealized interest revenue on installment sales shall be presented as a deduction from trade receivables. For trade receivables that will be recovered after more than 1 year, the amount expected to be recovered in each financial year shall be disclosed in the notes to the financial reports.
Pledged trade receivables shall be disclosed in the notes to the financial reports.
(9) Other receivables: Receivables other than notes receivable and trade receivables.
At each balance sheet date an assessment shall be made of whether there is any unrecoverable amount from other receivables and an appropriate allowance for doubtful debts shall be made.
Allowances for doubtful debts shall be presented respectively as deductions from notes receivable, trade receivables, and other receivables. If such items are further subclassified, the allowances for doubtful debts shall also be presented respectively in the same manner.
(10) Current tax assets: The portion of the tax amount already paid in respect of current and prior periods that exceeds the amount due for those periods.
(11) Inventories: Inventories are assets:
(i) held for sale in the ordinary course of business;
(ii) in the process of production for sale in the ordinary course of business; or
(iii) in the form of materials or supplies to be consumed in the production process or in the rendering of services.
Inventories shall be accounted for in accordance with IAS 2.
Inventories shall be measured at the lower of cost and net realizable value. If the cost of inventories is higher than net realizable value, inventories shall be written down below cost to net realizable value, and the amount of the write-down shall be recognized as cost of sales in the period the write-down occurs.
Inventories provided as a pledge or security or used under the surveillance of creditors shall be noted.
(12) Prepayments: Prepaid expenses and prepayments for purchase of materials.
(13) Non-current assets held for sale: Any non-current asset, or asset included in a disposal group held for sale, that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
The measurement, presentation, and disclosure of non-current assets held for sale and disposal groups held for sale shall be made in accordance with IFRS 5.
(14) Other current assets: Current assets not attributable to any of the classes above.
2. Non-current assets: Tangible, intangible and financial assets of a long-term nature, other than assets classified as current.
(1) Held-to-maturity financial assets – current: A non-derivative financial asset with fixed or determinable payments and fixed maturity, and which the enterprise has the positive intention and ability to hold to maturity, excluding the following items:
(i) It is designated, upon initial recognition, as at fair value through profit or loss.
(ii) It is designated as available-for-sale.
(iii) It meets the definition of loans and receivables.
Held-to-maturity financial assets shall be measured at amortized cost using the effective interest method.
(2) Investments accounted for using the equity method: An investment in an associate, or an interest in a jointly controlled entity not recognized by the venturer using proportionate consolidation.
The valuation and presentation of investments accounted for using the equity method shall be made in accordance with IAS 28 and IAS 31.
When investment gain or loss is recognized, if the financial reports prepared by an associate do not conform to these Regulations, those financial reports shall first be adjusted to achieve conformance before they may be used to recognize investment gain or loss. The financial reports of an associate used in applying the equity method shall be prepared as of the same date as that of the investor, and if prepared as of a different date, adjustments shall be made for the effects of significant transactions or events that occur between that date and the date of the investor's financial reports. In no case shall there be more than 3 months difference between the balance sheet date of the associate and that of the investor. If a CPA determines, pursuant to Statement of Auditing Standards No. 24, that an associate has a material effect on the fair presentation of the financial reports of an investor, the financial reports of the associate shall be audited by a CPA in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and generally accepted auditing standards.
If an investment accounted for using the equity method is pledged as collateral or otherwise subject to any restriction or limitation, that fact shall be noted.
(3) Property, plant and equipment: Tangible asset items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and that are expected to be used during more than 1 financial year.
Property, plant and equipment shall be subsequently measured using the cost model and accounted for in accordance with IAS 16.
Each component of property, plant and equipment that is significant shall be depreciated separately.
When items of property, plant and equipment have different useful lives, or provide economic benefits in different ways, or are subject to different depreciation methods or depreciation rates, the notes to the financial reports shall show each class of their material components.
(4) Investment property: Property held, by the owner or by the lessee under a finance lease, to earn rentals, or for capital appreciation, or both.
Investment property shall be subsequently measured using the cost model and accounted for in accordance with IAS 40.
(5) Intangible assets: An identifiable non-monetary asset without physical substance that meets the definition of identifiability, control by an entity, and existence of future economic benefits.
Intangible assets shall be subsequently measured using the cost model and accounted for in accordance with IAS 38.
(6) Biological assets: A living animal or plant related to agricultural activity. Biological assets shall be accounted for in accordance with IAS 41.
(7) Deferred tax assets: The amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carryforward of unused tax losses, and the carryforward of unused tax credits.
(8) Other non-current assets: Non-current assets not attributable to any of the classes above.
Exploration and evaluation assets shall be subsequently measured using the cost model and accounted for in accordance with IFRS 6.
The items described in the preceding paragraph in relation to financial assets at fair value through profit or loss, derivative financial assets for hedging, available-for-sale financial assets, financial assets measured at cost, bond investment for which no active market exists, held-to-maturity financial assets, notes receivable, trade receivables, and other receivables shall be accounted for in accordance with IAS 39.
An issuer shall assess at each balance sheet date whether there is any objective evidence of impairment for the items described in paragraph 3 in relation to available-for-sale financial assets, financial assets measured at cost, bond investment for which no active market exists, held-to-maturity financial assets, notes receivable, trade receivables, other receivables, investments accounted for using the equity method, property, plant and equipment, investment property, intangible assets, and exploration and evaluation assets. If any such evidence exists, the issuer shall recognize the amount of any impairment loss in accordance with IAS 39 and IAS 36.
The items described in paragraph 3 in relation to financial assets at fair value through profit or loss, derivative financial assets for hedging, available-for-sale financial assets, financial assets measured at cost, bond investment for which no active market exists, held-to-maturity financial assets, and biological assets shall be distinguished as current and non-current based on liquidity.Assets shall be properly classified. Current and non-current assets shall be distinguished, except when a presentation of all assets in order of liquidity provides information that is reliable and more relevant.
For each asset line item, the total amount expected to be recovered within 12 months after the balance sheet date and the total amount expected to be recovered more than 12 months after the balance sheet date shall be separately presented in the financial reports or disclosed in the notes.
As a minimum, the balance sheet shall include the following asset line items:
1. Current assets: An entity shall classify an asset as current when it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle; when it holds the asset primarily for the purpose of trading; when it expects to realize the asset within 12 months after the balance sheet date; or when the asset is cash or a cash equivalent, unless the asset is to be used for an exchange or to settle a liability, or otherwise remains restricted, at more than 12 months after the balance sheet date.
(1) Cash and cash equivalents: Cash on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
An issuer shall disclose the components of cash and cash equivalents and the policy which it adopts in determining the composition of cash and cash equivalents.
(2) Financial assets at fair value through profit or loss – current: Financial assets that meet any of the following conditions:
(i) Financial assets held for trading.
(ii) Financial assets that, except for those designated as hedged items under hedge accounting requirements, are designated upon initial recognition as at fair value through profit or loss.
A financial instrument shall be classified as a financial asset held for trading if:
(i) It is acquired principally for the purpose of sale in the near term.
(ii) It is, upon initial recognition, a part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent pattern of short-term profit-taking.
(iii) It is a derivative financial asset, except for a derivative financial asset that is a financial guarantee contract or a designated and effective hedging instrument.
Financial assets at fair value through profit or loss shall be measured at fair value.
(3) Available-for-sale financial assets – current: Financial assets that are not derivative financial assets and that meet any of the following conditions:
(i). Financial assets that are designated as available-for-sale.
(ii). Financial assets that are not:
(a) Financial assets measured at fair value through profit or loss.
(b) Held-to-maturity financial assets.
(c) Financial assets measured at cost.
(d) Bond investments for which no active market exists.
(e) Receivables.
Available-for-sale financial assets shall be measured at fair value.
(4) Derivative financial assets for hedging – current: Any derivative financial asset that is a designated and effective hedging instrument under hedge accounting requirements. Any such asset shall be measured at fair value.
(5) Financial assets measured at cost – current: Financial assets that meet all of the following conditions:
(i) An investment in equity instruments that do not have a quoted price in an active market, or a derivative instrument that is linked to such equity instruments that do not have a quoted price in an active market and that shall settled by delivery of such equity instruments.
(ii) The fair value cannot be reliably measured.
(6) Bond investments for which no active market exists – current: Bond investments that do not have a quoted price in an active market and with fixed or determinable payments, and that meet all of the following conditions:
(i) Not classified as at fair value through profit or loss.
(ii) Not designated as available-for-sale.
(iii) There are no other reasons except for credit worsening that |