1. Financial Supervisory Commission Vice Chairperson Dr. Tien-Mu Huang September 3, 2014 IFRSs Adoption in Taiwan 1

2. Outline  Background of IFRSs adoption in Taiwan  Benefits of adopting IFRSs  Strategies for adopting IFRSs  Future 2

3. Background of IFRSs adoption in Taiwan 3

4. Capital markets overview Equity issuance by public companies No. of listed companies Authorized capital Market capitalization TWSE-listed companies 846 US$223.21 billion US$888.74 billion GTSM-listed companies 669 US$22.39 billion US$89.64 billion As of the end of July 2014 4

5. Capital markets overview Foreign investment on the Taiwan Stock Exchange Total accumulated net inward remittances Share of market held by foreign investors Dec. 1992 to end of July 2014 US$194.84 billion 35.05% 5

6. The offering and issuance of overseas securities Overseas securities issues by public companies GDR/ADR Overseas corporate bonds With new shares With seasoned shares Total approvals (2004 – July 2014) 5123128 6

7. Development of accounting standards in Taiwan 1982-1999: followed US GAAP 1999 1999-2012: converged to IFRSs 2009 2009: announced full adoption of IFRSs from 2013 1982 From convergence to full adoption 7

8. Benefits of adopting IFRSs 8

9. The adoption of IFRSs is beneficial to investors, business enterprises and government 9

10. The global trend towards full adoption of IFRSs Internationalizat ion of capital markets Demand for high quality financial reporting Demand for high quality financial reporting IFRSs 10

11. Primary features of IFRSs Principles-based Fair value measurement Disclosures of business management information All-inclusive income 11

12. More transparency is leading the way IFRSs Local accounting standards The FSC's major policy 12

13. Strategies for adopting IFRSs 13

14. Strategies for adopting IFRSs InitiativeProcessAchievements 14

15. To adopt or to converge, that is not a question! Low cost of conversion High benefit Cost-benefit Analysis Increasing competitive advantage Policy Objective 15

16. Process Planning Supervision Organization Promotion Challenges 16

17. Planning On 14 May, 2009 FSC announced the “Roadmap toward IFRS Adoption in Taiwan” On 28 January, 2014 FSC announced the “Roadmap for Full Adoption of the Updated IFRS” The FSC has announced two roadmaps: 17

18. Domestic companies to adopt IFRS version 2010 in two-phase mandatory process. Roadmap toward IFRS adoption in Taiwan Planning 18

19. All public companies will fully adopt the latest version of the IFRSs according to a two-phase timetable. Roadmap for full adoption of the updated IFRSs Planning 19

20. Supervision Supervision of the implementation The FSC has required companies to file : - transition plans - implementation report 20

21. Organization IFRSs taskforce Communications platform 21

22. Organization Roadmap Work Plans IFRSs Taskforce 22

23. Communications platform - The FSC set up an IFRSs service center Organization 23

24. Promotion Education and outreach of IFRSs Insurance Other industries Banking Senior management Investors Accountants Staff Media Securities and futures 24

25. Challenges Cross-border communication 1 Regulatory system adjustments 2 25

26. Cross-border communication Examination Yuan Ministry of Finance Ministry of Education Ministry of Economic Affairs Income tax issues IFRSs for non-public companies National exams now based on the IFRS standards IFRSs education 26

27. Regulatory system adjustments The FSC has amended relevant laws and regulations, such as the: Securities and Exchange Act Securities and Exchange Act Enforcement Rules Regulations Governing the Preparation of Financial Reports by Securities Issuers 27

28. Achievements Phase I companies – Have filed IFRSs financial reports Phase I companies – Have filed IFRSs financial reports Phase II companies – Have completed the dry run Phase II companies – Have completed the dry run 28

29. Benefits After adopting IFRS 29

30. Benefits after adoption Companies’ responses 30

31. Benefits after adoption Taiwan’s capital markets have changed 31

32. Benefits after adoption Operating RevenueProfit Before Tax 20132012%20132012% Listed Companies 952.97 billion 935.86 billion 1.83% 62.83 billion 42.76 billion 46.93% 32

33. Future 33

34. Future Keep Enhancing the transparency of financial reports Keep amending relevant laws and regulations in response to revisions of the IFRSs 34

35. Thank you for your attention IFRSs Adoption in Taiwan ブリーフィング完成 ありがとう 35