43
2013
CPC
Notes to Financial Statements
1. ORGANIZATION AND OPERATIONS
CPC Corporation, Taiwan (the “Corporation” or CPC) was established on June 1, 1946 and engages
mainly in oil and gas exploration, refining, procurement, transport, storage and marketing.
As of December 31, 2012 and 2011, the Corporation had 14,977 and 15,219 employees, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
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Basis of Presentation
CPC is operated and managed by the Government of the Republic of China (ROC). CPC’s accounts
are maintained generally in accordance with the accounting laws and regulations governing state-owned
enterprises. The Corporation’s significant accounting policies conform to the Guidelines Governing the
Preparation of Financial Reports by Securities Issuers, Business Accounting Law, Guidelines Governing
Business Accounting, and accounting principles generally accepted in the ROC.
The Corporation’s annual financial statements are required to be examined by the Executive Yuan
and the Ministry of Audit of the Control Yuan. The examinations are primarily aimed at determining
the extent to which the Corporation meets its budget as approved by the Legislative Yuan. The
Corporation’s financial statements are finalized on the basis of the results of these examinations. The
Ministry of Audit’s adjustments should be reflected in the financial statements audited by independent
certified public accountants. The opening balance of the following year of the Corporation’s books of
accounts is based on the balance after adjustments made by the Ministry of Audit. The examinations
of the Corporation’s financial statements as of and for the year ended December 31, 2011 by these
government agencies had already been completed.
For readers’ convenience, the accompanying financial statements have been translated into English
from the original Chinese version prepared and used in the ROC. If inconsistencies arise between the
English version and the Chinese version or if differences arise in the interpretations between the two
versions, the Chinese version of the financial statements shall prevail.
Significant accounting policies are summarized as follows:
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Foreign Currencies
Nonderivative foreign-currency transactions are recorded in New Taiwan dollars at the rates of
exchange in effect when the transactions occur. Exchange differences arising from the settlement of
foreign-currency assets and liabilities are recognized in profit or loss.
At the balance sheet date, foreign-currency monetary assets and liabilities are revalued using prevailing
exchange rates, and the exchange differences are recognized in profit or loss.
At the balance sheet date, foreign-currency nonmonetary assets and liabilities that are measured at fair
value are revalued using prevailing exchange rates, with the exchange differences treated as follows:
a.Recognized in shareholders’ equity if the changes in fair value are recognized in shareholders’ equity;
b.Recognized in profit and loss if the changes in fair value are recognized in profit or loss.
Foreign-currency nonmonetary assets and liabilities that are carried at cost continue to be stated at
exchange rates at trade dates.
If the functional currency of an equity-method investee is a foreign currency, translation adjustments
will result from the translation of the investee’s financial statements into the reporting currency of
the Corporation. Such adjustments are accumulated and reported as a separate component of
shareholders’ equity.
