Financial Crime World

Taiwan’s Financial Reporting Requirements Take Shape Amid Global Convergence Efforts

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In a significant move towards global financial reporting standards, Taiwan’s Financial Supervisory Commission (FSC) has announced a roadmap for the full adoption of International Financial Reporting Standards (IFRSs) in the country. The phased implementation plan aims to bring Taiwanese companies in line with international best practices and enhance transparency and comparability across financial markets.

Phased Implementation Plan

Phase I (2012-2013)

  • Listed companies and financial institutions, excluding credit cooperatives, credit card companies, and insurance intermediaries, were required to prepare their financial reports using IFRSs as endorsed by the FSC.
  • Early adoption was permitted in 2012 for selected companies that met specific criteria and received FSC approval.

Phase II (2015-Present)

  • The scope of mandatory IFRS adoption expanded to unlisted public companies, credit cooperatives, credit card companies, and insurance intermediaries.
  • These entities are now required to prepare their financial reports using IFRSs as endorsed by the FSC, with permission to apply them since 2013.

Key Modifications

The FSC has made some adjustments to accommodate local needs, including:

  • Eliminating options for revaluing property, plant and equipment, intangible assets, and exploration and evaluation assets through other comprehensive income.
  • Deferring the effective dates of certain new/modified standards.

Applicability of IFRSs

Companies covered under Phases I and II are required to apply IFRSs as endorsed by the FSC. However, domestic companies whose equity securities trade in another country may opt for using IFRSs as issued by the International Accounting Standards Board (IASB), provided they disclose a reconciliation of their IFRS financial statements with those prepared under Taiwanese standards.

Private Companies

Private companies not subject to Securities and Exchange Act or FSC supervision but regulated by the Ministry of Economic Affairs have the flexibility to choose between local standards (ROC GAAP) or IFRSs as endorsed by the FSC.

IFRS Resources

Deloitte & Touche in Taiwan has been translating selected issues of our IFRS in Focus Newsletter and its predecessor, the IAS Plus Update Newsletter, into traditional Chinese. The newsletters provide valuable insights on IFRS implementation and interpretation, and are available for download from the Deloitte Taiwan IFRS website.

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