Page 52 - CPC 2018 Annual Report

50 CPC Corporation, Taiwan 2018
The Company is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Company completes its evaluation.
(4) Summary of significant accounting policies
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 Company’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 Company’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 Company meets its budget as approved by the Legislative Yuan. The Company’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 Company’s books of accounts is based on the balance after the adjustments made by the Ministry of Audit. The examination of the Company’s financial statements as of and for the year ended December 31, 2016 had already been completed.
The examinations of the Company’s financial statements as of and for the year ended December 31, 2017 by these government agencies were not yet completed as of the auditor’s report date. The financial statements were compiled in conformity with Guidelines Governing the Preparation of Financial Reports by Securities Issuers, IFRSs and related regulations.
(a) Statement of compliance
The financial statements have been prepared in accordance with the accounting laws and regulations governing state-owned enterprises, the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.
(b) Basis of preparation
1. Basis of measurement
Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:
(i) Financial instruments measured at fair value through profit or loss are measured at fair value;
(ii) Available-for-sale financial assets are measured at fair value;
(iii) Hedging derivative financial instruments are measured at fair value;
(iv) The defined benefit liability (asset) is recognized as the fair value of the plan assets less the present value of the defined benefit obligation.
2. Functional and presentation currency
The functional currency is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan dollars, which is the Company’s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.
(c) Foreign currencies
1. Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Company at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign