In accordance with the "Basic Standards of Accounting Standards for Business Enterprises," the Ministry of Finance issued the revised Accounting Standard for Business Enterprises No. 33 — Consolidated Financial Statements on 2014/1/27, effective from 2014/7/1.
1. Overview of Guidelines
This standard prescribes the preparation and presentation of consolidated financial statements. A parent shall prepare consolidated financial statements, incorporating its subsidiaries into the consolidation scope, based on the separate financial statements of the parent and its subsidiaries and other relevant information.
Definition of Control
Control exists when an investor has power over the investee, is exposed to variable returns from its involvement with the investee, and has the ability to use that power to affect the amount of those returns.
II. Scope of Consolidation
Included in the scope
The parent shall include all its subsidiaries in the consolidation scope, including investees it controls (such as separately identifiable portions and structured entities).
Excluded from consolidation
If the parent is an investment entity, only subsidiaries that provide services related to its investment activities should be consolidated and included in the consolidated financial statements; other subsidiaries shall not be consolidated.
III. Merge Program
Key Consolidation and Elimination Items
- • The long-term equity investment of the parent company in its subsidiary shall be offset against the parent's share of the subsidiary's equity.
- • Intercompany receivables and payables between the parent company and its subsidiaries, and among subsidiaries themselves, shall be eliminated.
- • Eliminate intercompany revenue and costs resulting from sales of goods (or provision of services) between the parent company and its subsidiaries, or among subsidiaries.
- • Unrealized internal transaction gains or losses arising from assets held between the parent company and its subsidiaries, or among subsidiaries themselves, shall be eliminated.
IV. Special Matters
Business combination under common control
The combined reporting entity is deemed to have existed since the date when the ultimate controlling party began exercising control, and comparative financial statements are adjusted accordingly.
Non-controlling interest
The portion of a subsidiary's equity not attributable to the parent shall be presented separately as non-controlling interest under equity in the consolidated balance sheet.
Regulatory Document Attachment
Accounting Standards for Business Enterprises No. 33 — Consolidated Financial Statements (PDF)