Last checked at 31 Mar 2014 10:05
Subject: Cathay Financial Holdings Co., Ltd. announced to change the accounting
policy starting from January 1, 2014
Date of events:2014/03/31
Contents:
1. Date of the board of directors resolution: 2014/03/31
2. The nature of the change: Change in accounting policy
3. Reason for the change: Cathay Financial Holdings Co., Ltd. announced to change
the accounting policy regarding subsequent measurement of investment
properties from cost model to fair value model.
4. The prior periods affected by retrospective application of the new accounting
policy: 2014/01/01
5. The line items affected and the actual effect for the immediately preceding
financial year: The affected items are as follows.
2013/01/01 Balance sheet (NT$): Investment property increased 78.76billion,
Deferred tax assets increased 0.02billion, Deferred tax liabilities increased
3.54billion and Total shareholders' equity increased 75.24billion.
2013/12/31 Balance sheet (NT$): Investment property increased 100.13billion,
Property, Plant, and Equipment and Assets Held for Sale increased 0.26billion,
Deferred tax assets increased 0.02billion, Deferred tax liabilities increased
6.16billion and Total shareholders' equity increased 94.25billion.
Statement of comprehensive income 2013 (NT$): Change in fair value of
investment properties increased 9.25billion, Operating expenses decreased
1.58billion, Income tax expense increased 1.83billion, Net profit increased
9.00billion, Other comprehensive income increased 10.01 billion and Total
comprehensive profit increased 19.01billion.
Since the properties rented to a parent, subsidiary, or fellow subsidiary
are not recognized as investment property in consolidated financial
statements, the effects on equities of those Inter-company rental properties
are NT$ 21.96billion on January 1st, 2013 and NT$31.66billion on December 31st,
2013.
6. The actual effect on the opening balance of retained earnings for the
immediately preceding financial year: NT$75.24billion increased in the opening
balance of retained earnings for 2013.
7. The reasonableness and necessity for the change in accounting policy or
accounting estimate after the beginning of the financial year:
"Regulations Governing the Preparation of Financial Reports by Financial
Holding Companies" was amended by the Taiwan FSC on January 9th, 2014. The
financial holding is permitted to choose either cost model or fair value model
when subsequently accounting for investment properties in 2014. To improve the
reliability and relevance of financial reporting and to enhance financial
disclosure transparency, The Company concluded that the subsequent measurement of investment properties changes from cost model to fair value model on 2014/1/1.
8. If retrospective application is impracticable, specify the reasons, how and
from when the accounting policy change be applied: N/A
9. If retrospective application is impracticable, CPA provides the opinion about
the impact of the audit opinion for the financial year preceding the
accounting change :N/A
10. About the reasonableness of the item 2 to 9, the itemized analysis and
reviewed opinion from CPA: The CPA has reviewed in accordance with Article 6
of the Regulations Governing the Preparation of Financial Reports by Financial
Holding Companies, and issued an opinion on the CFH's changes in accounting
policy that the abovementioned items 2 to 9 are fair and reasonable.
11. Objection or reservation opinion from the independent directors: N/A
12. Countermeasures: The Company elected to subsequently measure investment
properties at fair value from January 1st, 2014 in accordance with
"Regulations Governing the Preparation of Financial Reports by Financial
Holding Companies". This accounting policy change approved by the Company's
Board on March 31st , 2014.
13. Any other matters that need to be specified: N/A