4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
CPC is operated and managed by the Government of the Republic of China (ROC). CPC’s accounts are maintained generally
in accordance with the accounting laws and regulations governing state-owned enterprises. The Corporation’s significant
accounting policies conform to the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, and the
following International Financial Reporting Standards, International Accounting Standards (IASs), Interpretations of International
Financial Reporting Standards (IFRIC), and Interpretations of IAS (SIC) (collectively, “IFRSs”) endorsed by the Financial
Supervisory Commission (FSC).
The Corporation’s annual financial statements are required to be examined by the Executive Yuan and the Ministry of Audit of
the Control Yuan. The examinations are primarily aimed at determining the extent to which the Corporation meets its budget
as approved by the Legislative Yuan. The Corporation’s financial statements are finalized on the basis of the results of these
examinations. The Ministry of Audit’s adjustments should be reflected in the financial statements audited by independent
certified public accountants. The opening balance of the following year of the Corporation’s books of accounts is based on the
balance after the adjustments made by the Ministry of Audit. The examination of the Corporation’s financial statements as of
and for the year ended December 31, 2013 had already been completed.
The examinations of the Corporation’s financial statements as of and for the year ended December 31, 2014 by these government
agencies had not yet been completed as of the audit report date. The financial statements were compiled in conformity with
Guidelines Governing the Preparation of Financial Reports by Securities Issuers.
On May 14, 2009, the Financial Supervisory Commission (FSC) announced the “Framework for the Adoption of IFRSs by the
Companies in the ROC.” Under this framework, starting from 2013, companies listed on the Taiwan Stock Exchange or traded
on the Taiwan GreTai Securities Market or Emerging Stock Market should prepare their financial statements in accordance
with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC and SIC (the
“IFRSs”) endorsed by the FSC. On the other hand, public traded companies that are not listed on the Taiwan Stock Exchange
or the Taiwan GreTai Securities Market, credit cooperatives, and credit card companies should adopt IFRSs in 2015.
Under the original IFRS adoption timetable announced by the FSC, CPC should adopt IFRSs in 2015. However, the Directorate-
General of Budget of the Executive Yuan, Accounting, and Statistics (DGBAS) soon became concerned that the differences
in the timing of the application of IFRSs and budgeting basis by the numerous state-owned companies could result in
inconsistencies in these companies’ presentation of financial position and financial performance in the Consolidated Table
of State-Owned Subordinate Unit Businesses. Thus in 2010, DGBAS announced the “IFRSs Adoption Plan for State-Owned
Entities,” stipulating that all state-owned entities should adopt IFRSs in 2013.
For readers’ convenience, the accompanying financial statements have been translated into English from the original Chinese
version prepared and used in the ROC. If inconsistencies arise between the English version and the Chinese version or if
differences arise in the interpretations between the two versions, the Chinese version of the financial statements shall prevail.
Statement of Compliance
The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial
Reports by Securities Issuers and IFRSs as endorsed by the FSC.
Basis of Preparation
The financial statements have been prepared on the historical cost basis, except for financial instruments that are measured at
fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
When preparing its financial statements, the Corporation uses equity method to account for its investment in associates.
Classification of Current and Non-current Assets and Liabilities
Current assets include:
a. Assets held primarily for the purpose of trading;
b. Assets to be realized within twelve months after the reporting period; and
c. Cash and cash equivalents, unless the asset is restricted from being exchanged or used to settle a liability for at least 12
months after the reporting period.
Current liabilities include:
a. Liabilities held primarily for the purpose of trading;
b. Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance or to reschedule
