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SFAS No.
19 Development Stage Accounting |
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 Status |
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Revised by the
Financial Accounting Standards Committee In Taiwan on 21
March 2002
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Summary |
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The purpose of this Statement is to
establish the accounting standards to be followed by development
stage enterprises. |
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The
term development stage refers to an enterprise that is devoting its
efforts to establishing a new business and either of the following
conditions exists: |
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(a)
Planned
primary operations have not commenced. |
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(b) Planned primary operations have commenced, but
there has been no significant |
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revenue
generated yet. |
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The incurrence of
organization costs makes possible the establishment and operating
activities of an enterprise. However, the future economic benefits
to the enterprise cannot be clearly identified. Therefore,
organization costs are recognized as expenses when they are
incurred. |
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The accounting principles
used by an enterprise to account for transactions taking place
during its development stage shall be the same as those applicable
to an established enterprise. |
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The
following financial statements and supplementary information should
be provided by development stage enterprise: |
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(a)
Balance sheet: In the event of cumulative net losses, the
cumulative losses should be |
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reported under the
caption of Deficit accumulated during the development stage
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in the stockholders' equity section. |
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(b)
Income statement: The income statement should
report on the current period |
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revenue
and expenses, and the revenue and expenses on a cumulative basis
since |
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the enterprise's inception. |
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(c) Statement of
cash flows: The statement shows cash flows resulting from
operating,
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investment, and financing activities for the current period and on a
cumulative basis |
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from the enterprise's inception. |
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(d) Statement of stockholders' equity: The statement shows the
following information |
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from the enterprise's
inception: |
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(i) for each issuance, explanation as to the number of shares and
issuance terms |
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relating to stock, stock rights, warrants, or other equity
securities issued; |
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(ii) for each issuance, the dollar amounts of cash or non-cash
assets received for |
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issuing equity securities (including total issue price and per share
issue price); and |
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(iii) in the event that stock is issued for non-cash assets, the
nature and valuation |
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basis of the assets received. |
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The financial statements issued during the development stage should
be labeled as such |
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in
the headings of the financial statements. In addition, the nature
of the developmental |
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activities should be stated in a footnote. |
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Effective
date
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This revised Statement becomes effective for financial statements
for the fiscal year |
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ending on and after December 31, 2002. Earlier adoption is allowed. |
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