Chapter 4 : Account Titles and Preparation of Financial Statements
Article 14 :
The balance sheet items shallbe categorized as follows:
(1) Current assets.
(2) Funds and long-term investments.
(3) Property, plant and equipment.
(4) Depletable assets.
(5) Intangible assets.
(6) Other assets.
Article 15 :
Current assets mean unrestricted cash and cash equivalent,
short-term investments, and other assets that are convertible to cash
or expended within one year.
Categorization and evaluation of current asset titles along with
required explanatory notes are as follows:
1. Cash and Cash equivalent: cash on hand, deposits with banks, cash
for revolving use, petty cash, and short-term and highly liquid
investment that can be converted into a fixed amount of cash with
interest fluctuation having small impact thereon, excluding those
already set aside for use or restricted by law or contract; the
account nature and required notes are as follows:
(1) Non-demand-deposits with maturity over a year shall be
(2) Time deposits (including negotiable certificates of deposit)
shall be reclassified as other assets if provided as lien for
a long-term liability or as other current liabilities if
provided as lien for a current liability, and shall be
specified in the notes for the fact of collateralization.
Refundable deposit shallbe classified as a current or other
asset by the long- or short-term nature, and shall be
specified in the notes.
(3) Compensating balances shall be classified as current assets if
arising from short-term loans, or reclassified as other assets
or long-term investments if arising from long-term liabilities.
2. Short-term investment: defined as investment that is short-term;
the nature of titles and evaluation thereof and the required
explanatory notes are as follows:
(1) Financial asset with change in fair value being recorded as
gains or losses and financial asset available for sale shall
be valued using the fair value on the balance sheet date; the
fair value of listed or OTC stock and depository receipts
indicate the closing price on the balance sheet date.
(2) Financial assets which need to be sold within a short period
of time, thus changing in fair value and incurring a gain or
loss, must be reflected in the financial assets records or
when determining how to measure the gains or losses, you
decided on using fair value to reflect these changes in fair
value, these figures must also be reflected in your financial
(3) Financial asset available for sale shall mean the...
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