The Ministry of Transportation and Communications is expected to demand within a few days that aviation rights be listed among the assets of Taiwanese airlines in a bid to correct current practices which tend to underestimate the value of companies' net assets, sources said yesterday.
The demand will be made in line with a 2006 revision to the financial accounting standards by Taiwan's Accounting Research and Development Foundation (ARDF), which stipulated that intangibles be listed as business assets.
Although the rule became effective on Jan. 1 last year, most Taiwan businesses still did not include intangibles in their financial statements for the first half of last year, mainly because most Taiwan accountants have refused to attest to the assessed value of intangibles such as aviation rights in light of the great risks involved.
UNDERESTIMATED
The situation has resulted in the net value of the assets of Taiwanese airlines being underestimated, raising concerns in Cabinet that the companies could be bought out by foreign investors attracted to their artificially low prices.
In an internal report released recently, the Cabinet pointed to a plan by Singapore Airlines and Singapore's Temasek Sovereign Fund to jointly spend HK$7.2 billion (US$923.12 million) buying stock in China Eastern Airlines (中國東方航空).
As the state-owned Chinese airlines did not include the value of its aviation rights in its net asset value, the incident was described by critics as tantamount to selling the country's property at a discount, the report said.
EXCLUDING RIGHTS
In Taiwan, the international carriers China Airlines Ltd (CAL, 中華航空) and EVA Airways Corp (長榮航空) are estimated to be worth only NT$60 billion (US$1.86 billion) each, excluding the values of their aviation rights, while the domestic carrier Far Eastern Air Transport (FAT, 遠東航空) is worth NT$5 billion, meaning any foreign buyer would need to spend barely half the cost of an Airbus A380 to acquire all 16 aircraft and aviation rights currently owned by FAT, according to the report.
According to the revision adopted by the ARDF, the criteria for the recognition of an intangible asset are: it is probable that expected future economic benefits are attributable to the asset will flow to the entity; and the cost of the asset can be measured reliably.
An unidentified accountant said that if the aviation rights obtained by Taiwanese airlines meet the criteria set forth in the rule, they should be counted as part of the companies' assets as long as they were acquired on, or after, Jan. 1 last year.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS