Financial Reporting Requirements for Foundations in Taiwan, Province of China

To ensure transparency and accountability, foundations in Taiwan, Province of China are required to handle their accounting and prepare financial reports in accordance with the Foundations Act and these regulations.

Establishing an Accounting System

According to Article 2 of the regulations, foundations overseen by the Central Bank of the Republic of China (Taiwan) must establish an accounting system based on the nature of their accounting affairs, actual business status, and development and management needs. The system should contain particulars such as:

A general description
Chart of journals and ledgers
Account titles
Accounting documents
Accounting books
Financial reports
Treatment of accounting affairs
Internal audit

Fiscal Year and Accounting Method

Article 4 specifies that foundations must use the calendar year as their fiscal year, adopt accrual-based accounting, and use the New Taiwan Dollar (NTD) as their basic monetary unit. Financial reports must be presented fairly and without being misleading to interested parties in making judgments and decisions.

Retention and Destruction of Accounting Documents

Under Article 6, foundations are required to retain and destroy accounting documents, account books, significant memorandum books, and financial reports according to specific provisions. For example:

All accounting documents must be retained for at least five years from the date annual financial reports are submitted to the Bank for record.

Accounting Documents and Vouchers

Article 7 states that accounting documents include source documents and vouchers. Foundations must produce vouchers based on source documents and make entries into account books based on vouchers. However, events without a source document may be handled separately.

Account Titles and Financial Reports

Article 8 requires foundations to establish account titles based on the Reference Account Titles for Foundations Overseen by the Central Bank of the Republic of China (Taiwan). Financial reports must contain information such as:

Financial statements
Statement details of major accounts
Other disclosures helpful to decision-making users
The format of financial reports follows a prescribed format.

Explanatory Notes on Subsequent Events

Article 17 specifies that financial reports should include explanatory notes on subsequent events that occur between the balance sheet date and the date when the financial reports are authorized for issue. Examples of such events include:

Changes in net worth or fund structure
Major long-term or short-term borrowings
Significant changes in business scale or policy
Other major events or measures capable of affecting future financial position, financial performance, and cash flows

Effective Date

These regulations took effect on February 1, 2019.