To offset the potential impact from the implementation of stricter accounting rules on companies listed on the local bourse, the Cabinet yesterday said it will ask relevant government agencies to present a "buffer" mechanism shortly.
Cabinet Spokesman Chou Jung-tai (卓榮泰) yesterday said the government will work on supporting measures for the implementation of the Statements of Financial Accounting Standard 35, which went into effect this year and requires companies to restate the value of idle assets, including goodwill, or the amount a firm paid for an acquisition that exceeds market value.
Last Friday, the Bank of Overseas Chinese (華僑銀行) announced a downward adjustment of its earnings forecast for this year after writing off NT$864.9 million worth of depreciated assets, while China Life Insurance Co (中國人壽) said last Tuesday that it would report a net loss of NT$3.27 billion for last year. Yageo Corp (
The downward adjustments to financial reports has made investors nervous and dragged down stock prices, and has also prompted complaints, Chou said.
As for a plan to extend a 7 percent limit on share price movements to 15 percent in September, Chou said the government will ask related government agencies for more comments on the issue.
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