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12) Impairment of Non-financial Assets
The TaiwanICDF recognizes impairment loss when there is indication that the recoverable amount of an asset is
less than its book value. The recoverable amount is the higher of the fair value less costs to sell and value in use.
The fair value less costs to sell is the amount obtainable from the sale of the asset in an arm’s length transaction
after deducting any direct incremental disposal costs. The value in use is the present value of estimated future
cash flows to be derived from continuing use of the asset and from its disposal at the end of its useful life. When the
impairment no longer exists, the impairment loss recognized in prior years may be recovered.
13) Retirement Plan
A.The TaiwanICDF had a non-contributory pension plan originally, covering all regular employees, which was
defined by the Fund. The TaiwanICDF contributed monthly an amount based on 7% of the employees’ monthly
salaries and wages to the retirement fund deposited with a financial institution. This fund balance was not
reflected in the financial statements. Effective September 1, 2009, the TaiwanICDF has established a funded
defined contribution pension plan (the “New Plan”) under the Labor Pension Act. Under the New Plan, the
TaiwanICDF contributes monthly an amount based on 7% of the payroll grades corresponding to the employees’
monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. No
further contributions are made to the TaiwanICDF’s retirement fund.
B.Under the defined contribution pension plan, net periodic pension costs are recognized as incurred.
14) Income Tax
Income tax is accounted in accordance with the Standard for Non-profit Organizations Exempt from Income Tax
promulgated by the Executive Yuan, and ROC Statement of Financial Accounting Standards No. 22 (“Accounting
for Income Taxes”). Under- or over-provision of income tax in the previous year is accounted for as an adjustment
of income tax expense in the current year.
15) Reserve for Contingencies of Guarantee Loss
The TaiwanICDF issues guarantees for private enterprises to secure loans in compliance with the Regulation for the
TaiwanICDF in Providing Guarantee for Credit Facilities Extended to Private Enterprises Which Invest in Countries
with Formal Diplomatic Relationships promulgated by the MOFA. The reserve is accrued in accordance with the
Regulation for the TaiwanICDF Dealings with Past-Due/Non-Performing Loans and Bad Debts.
16) Revenues, Costs and Expenses
Revenues (including government donations) are recognized when the earning process is substantially completed
and is realized or realizable. Costs and expenses are recognized as incurred.
17) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of assets and liabilities and the
disclosures of contingent assets and liabilities at the date of the financial statements and the amounts of revenues
and expenses during the reporting period. Actual results could differ from those assumptions and estimates.
18) Settlement Date Accounting
The TaiwanICDF adopted settlement date accounting for the financial assets. For financial asset or financial liability
classified as at fair value through profit or loss, the change in fair value is recognized in profit or loss.
3. CHANGES IN ACCOUNTING PRINCIPLES
None.