In line with Taiwan’s adoption of IFRS 18,the FSC is amending the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” which will enhance the transparency and comparability of the presentation and disclosure of financial reports.The regulatory draft will be announced for public consultation.
2025-12-02
Starting from fiscal year 2028, Taiwan will implement IFRS 18 “Presentation and Disclosure in Financial Statements”. In response to this adoption and to external suggestions to adopt paperless filing for financial reports, the Financial Supervisory Commission (FSC) plans to amend certain provisions of the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the “Preparation Regulations”), which will be announced in the near future in accordance with the Administrative Procedure Act to solicit public opinions. The key points of this amendment are as follows:
I. Amendments in line with IFRS 18:
(I) Adjustments to the classification of revenues and expenses in the income statement:
1. The amendments specify that revenues and expenses in the statement of comprehensive income shall be presented separately by category, including operating, investing, financing, income taxes, and discontinued operations, to enable investors to more clearly understand the sources of profits and losses. In addition, considering that operating revenue and operating costs may include not only revenues and costs arising from the transfer of goods or services but also those generated from specific main business activities, the definitions of operating revenue and operating costs have been revised accordingly. Considering that operating revenue and operating costs may, in addition to including revenue and costs from the transfer of goods or services, also encompass income and costs arising from certain significant operating activities, the definitions of operating revenue and operating costs have been revised. The amendments also add or remove certain subtotal items; for example, new subtotals such as “interest income calculated using the effective interest method,” “operating profit or loss,” and “profit or loss before financing and income tax” are introduced, while line items such as “Other revenue” and “finance costs” are removed.
2. In addition, enterprises are required to assess the scope of their main business activities when classifying income and expenses. For example, for financial institutions whose main business is providing financing, interest income arising from lending activities shall be classified under operating category, which differs from general enterprises that are required to classify interest income under investing category. Similarly, for holding companies primarily engaged in investment activities, gains or losses related to investment property or financial instruments shall be classified as operating category, to reflect their business characteristics.
(II) Greater flexibility in classifying operating expenses: Current Preparation Regulations require enterprises to classify operating expenses by function (e.g., sales, administration, R&D). Following this amendment, enterprises may continue to use functional classification, or alternatively classify expenses by nature (e.g., employee benefits, depreciation, amortization, impairment), or use a combination of both. Enterprises may select the most appropriate presentation based on their operational characteristics.
(III) Minor revisions to the balance sheet and statement of cash flows:
1. Enterprises are required to present goodwill as a separate line item on the balance sheet.
2. To align with the changes in the classification of revenues and expenses in the income statement, the format of the statement of cash flows has been revised accordingly.
(IV) Enhanced note disclosures: The amendments introduce additional note disclosure requirements for nature-of-expense information, such as impairment losses and inventory write-downs. In addition, enterprises are required to disclose information related to management-defined performance measures (MPMs). For example, if a company uses measures such as “adjusted operating profit” or “EBITDA” in publicly disclosed materials for investor conferences, it must clearly explain how the measures be calculated and adjustment items in the notes to the financial statements to avoid misleading investors.
II. Promoting paperless submission of financial reports: To support carbon reduction and sustainability goals, financial reports and related attachments that are currently submitted and copied in paper form will, starting from the filing of first-quarter financial reports for fiscal year 2026, be fully transitioned to electronic submission via FSC-designated information disclosure website. Paper-based financial report submissions will no longer be required
According to the FSC, in order to fully consider stakeholder feedback to make the amendments more comprehensive, the draft amendments will be published in the official gazette of the Executive Yuan, together with a general description and a comparison table of the revised provisions. These materials will also be made available on the FSC website for public consultation. If you have any comments, please visit the FSC“Laws and Regulations Retrieving System”website (URL: http://law.fsc.gov.tw/) and submit your opinions within 30 days from the next day of the announcement or contact the Securities and Futures Bureau of the FSC.
Contact unit: Accounting and Auditing Division, Securities and Futures Bureau
Tel: (02)2774-7124 for Section Chief Huang
If you have any questions, please write to our public opinion box.
I. Amendments in line with IFRS 18:
(I) Adjustments to the classification of revenues and expenses in the income statement:
1. The amendments specify that revenues and expenses in the statement of comprehensive income shall be presented separately by category, including operating, investing, financing, income taxes, and discontinued operations, to enable investors to more clearly understand the sources of profits and losses. In addition, considering that operating revenue and operating costs may include not only revenues and costs arising from the transfer of goods or services but also those generated from specific main business activities, the definitions of operating revenue and operating costs have been revised accordingly. Considering that operating revenue and operating costs may, in addition to including revenue and costs from the transfer of goods or services, also encompass income and costs arising from certain significant operating activities, the definitions of operating revenue and operating costs have been revised. The amendments also add or remove certain subtotal items; for example, new subtotals such as “interest income calculated using the effective interest method,” “operating profit or loss,” and “profit or loss before financing and income tax” are introduced, while line items such as “Other revenue” and “finance costs” are removed.
2. In addition, enterprises are required to assess the scope of their main business activities when classifying income and expenses. For example, for financial institutions whose main business is providing financing, interest income arising from lending activities shall be classified under operating category, which differs from general enterprises that are required to classify interest income under investing category. Similarly, for holding companies primarily engaged in investment activities, gains or losses related to investment property or financial instruments shall be classified as operating category, to reflect their business characteristics.
(II) Greater flexibility in classifying operating expenses: Current Preparation Regulations require enterprises to classify operating expenses by function (e.g., sales, administration, R&D). Following this amendment, enterprises may continue to use functional classification, or alternatively classify expenses by nature (e.g., employee benefits, depreciation, amortization, impairment), or use a combination of both. Enterprises may select the most appropriate presentation based on their operational characteristics.
(III) Minor revisions to the balance sheet and statement of cash flows:
1. Enterprises are required to present goodwill as a separate line item on the balance sheet.
2. To align with the changes in the classification of revenues and expenses in the income statement, the format of the statement of cash flows has been revised accordingly.
(IV) Enhanced note disclosures: The amendments introduce additional note disclosure requirements for nature-of-expense information, such as impairment losses and inventory write-downs. In addition, enterprises are required to disclose information related to management-defined performance measures (MPMs). For example, if a company uses measures such as “adjusted operating profit” or “EBITDA” in publicly disclosed materials for investor conferences, it must clearly explain how the measures be calculated and adjustment items in the notes to the financial statements to avoid misleading investors.
II. Promoting paperless submission of financial reports: To support carbon reduction and sustainability goals, financial reports and related attachments that are currently submitted and copied in paper form will, starting from the filing of first-quarter financial reports for fiscal year 2026, be fully transitioned to electronic submission via FSC-designated information disclosure website. Paper-based financial report submissions will no longer be required
According to the FSC, in order to fully consider stakeholder feedback to make the amendments more comprehensive, the draft amendments will be published in the official gazette of the Executive Yuan, together with a general description and a comparison table of the revised provisions. These materials will also be made available on the FSC website for public consultation. If you have any comments, please visit the FSC“Laws and Regulations Retrieving System”website (URL: http://law.fsc.gov.tw/) and submit your opinions within 30 days from the next day of the announcement or contact the Securities and Futures Bureau of the FSC.
Contact unit: Accounting and Auditing Division, Securities and Futures Bureau
Tel: (02)2774-7124 for Section Chief Huang
If you have any questions, please write to our public opinion box.
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Update：
2026-01-12