Conrad Chang
Chairman
Financial Accounting Standards Committee
Accounting Research and Development Foundation
1

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In May 2009, Financial Supervisory
Commission announced a roadmap for the adoption of IFRS
Two-phased Adoption
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All listed companies and financial companies
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Except for credit cooperatives, credit card companies, and insurance intermediaries
Mandatory adoption in 2013
Voluntary adoption in 2012
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All other public companies
Mandatory adoption in 2015
Voluntary adoption in 2013
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( 藍天電腦 )
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Book value per share will increase to $65 from $13 after early adoption of IFRS
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Mainly the revaluation of PP&E from cost to fair value
Stock price also increases as well
Self-selection bias?
A comprehensive picture?
What can we learn from this case?
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A. Adoption of IFRS (ARDF)
B. Introduction of IFRS into Taiwan
(Taiwan Stock Exchange)
C. Laws and Monitoring Mechanism
(Securities and Futures Bureau of FSC)
D. Education and Promotion (Over-the-
Counter Market)
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1.
2.
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Translation of IFRS
All IFRS and IAS are already translated except for IAS 39
The translation of IFRIC and SIC is under way
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Active participation in international activities
World Standards Setters (WSS)
National Standards Setters (NSS)
Asia and Oceania Standards Setters Group
(AOSSG), hopefully
Regional Standard Setters, etc.
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B. Introduction of IFRS into
Taiwan (Taiwan Stock Exchange)
1.
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Analysis on the challenges and impacts of
IFRS adoption in Taiwan
Application of principled-based accounting standards
Difference analysis of Taiwan GAAP vs. IFRS
Formation of professional judgment
Interpretations of accounting issues
Issues for the first-time adoption and transitional period
Practice guidance from other countries
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B. Introduction of IFRS into
Taiwan (Taiwan Stock Exchange)
2. Solving the issues of adopting IFRS
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Adjustments of accounting systems and
IT systems (including XBRL) for public companies
Changes in CPA audits
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B. Introduction of IFRS into
Taiwan (Taiwan Stock Exchange)
3. Adjustment of the public information disclosure systems
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Amendment of regulations on filing public information
Revision of M.O.P.S
(Market Observation Post System, 公
開資訊觀測站 )
Revision of account titles and codes
Revision of XBRL
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C. Laws and Monitoring Mechanism
(Securities and Futures Bureau of
FSC)
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Amendment of Security Laws
Revision of regulations on the preparation of financial statement for all adopting companies (public companies, insurance industry, banking industry, securities and futures industry, etc.)
Gaps between IFRS and domestic tax laws
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D. Education and Promotion
(Over-the-Counter Market)
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Promotional brochures for IFRS
Training and educational seminars for accounting managers of public companies
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They have to take at least 15-hour IFRS accounting courses before the adoption
Even TV ads!
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Preparation basis of financial statements
Determination of functional currency
Land appreciation tax
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Preparation basis of financial statements
Financial statement
Consolidated statement (in IFRS)
Preparation basis
When subsidiary exists; equity method for associates
Individual statement (in IFRS)
Separate statement (in IFRS)
Entity statement
(non-IFRS)
When subsidiary does not exist; equity method for associates
FVPL for subsidiaries and associates
Equity method for subsidiaries and associates (non-IFRS)
Required?
yes yes no yes
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How to determine for export-oriented companies?
If so, do they have to file dual-currency financial statements?
Can they pay dividends in functional currency?
Which statement for filing domestic income tax returns?
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( 土地增值稅 )
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Very unique tax system
Do IAS 12 Income Taxes apply to it?
If so, for companies using cost method for PP&E, do they have to accrue deferred tax liabilities in case that the current appraisal value
( 目前公告現值 ) had been adjusted?
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