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Annual Report 2015
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Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the parent by the weighted-average number
of ordinary shares in issue during the period.
For the years ended December 31,
2015
2014
NT$
US$
NT$
Weighted-average number of shares outstanding common
stock (Unit: Thousands)
7,870,609
7,700,000
Profit attributable to ordinary shareholders of the Bank and its
subsidiaries
$
25,708,445 $
781,697 $
25,990,682
Basic earnings per share (in dollars)
$
3.27 $
0.10 $
3.37
7.
FAIR VALUE INFORMATION OF FINANCIAL INSTRUMENTS
(1)
Overview
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Financial instruments are recorded at fair value upon their initial recognition, where often fair value refers to the
transaction price; for subsequent measurements, other than a portion of financial instruments being measured at amortized cost, fair value is
elected for measurements. The best evidence for fair value is a public quote in an active market. If the market of a financial instrument is not
active, the Bank elects valuation techniques or references Bloomberg or the quotes of counterparties to measure the fair value of the financial
instrument. In addition, through the valuation process, information on the counterparty’s and the Bank’s credit risk is also considered.
(2)
Fair value information of financial instruments
Except for those listed in the table below, the carrying amounts of certain financial instruments held by the Bank and its subsidiaries (such as
cash and cash equivalents, due from Central Bank and call loans to other banks, investments in bills and bonds under resale agreement,
accounts receivable, bills discounted and loans, held-to-maturity financial assets-Central Bank time deposits, due to Central Bank and other
banks, funds borrowed from the Central Bank and other banks, bills and bonds payable under repurchase agreements, accounts payable,
deposits and remittances, financial bonds payable, and other financial liabilities) are approximate to their fair values (please refer to Note
7(4)). The fair value information of financial instruments measured at fair value is provided in Note 7(5).
NT$
Book Value
Fair Value
December 31, 2015
Held-to-maturity financial assets - investments in bonds
$
28,158,540 $
28,111,006
US$
Book Value
Fair Value
December 31, 2015
Held-to-maturity financial assets - investments in bonds
$
856,195 $
854,750
NT$
Book Value
Fair Value
December 31, 2014
Held-to-maturity financial assets - investments in bonds
$
18,595,040 $
18,618,174
The fair values of the above-mentioned held-to-maturity financial assets are classified as Level 1 and Level 2.
(3)
Financial instruments measured at fair value
If the market quotation from the Taiwan Stock Exchange Corporation, brokers, underwriters, Industrial Trade Unions, pricing service agencies
or competent authorities can be frequently obtained on time, and the price represents the actual and frequent transactions at arm’s length, then
a financial instrument is deemed to have an active market. If the above condition cannot be met, the market is deemed inactive. In general,
significant price variance between the purchase price and selling price, significantly increasing price variance or extremely low trading volume
are all indicators of an inactive market.
If the quoted market price of a financial instrument is available in an active market, the quoted price is the fair value, usually the fair value is
measured using the market price, interest rate, foreign exchange central parity rate shown in Reuters quotation system, partially using the
quoted prices from Bloomberg, OTC, and the basis for valuation is maintained consistently. If there is no quoted market price for reference,
a valuation technique or quoted price offer by the counterparties will be adopted to measure the fair value. Fair value measured by a valuation
technique is usually estimated by reference to the fair values of other financial instruments with similar terms and characteristics, or by using
cash flows discounting method, or using model calculation based on the market information (such as yield rate curves from OTC, average
interest rate of commercial papers from Reuters) available on the balance sheet date.
When assessing non-standardized financial instruments with lower complexity, derivative financial instruments such as interest rate swap
contracts, foreign exchange swap contracts, options, the Bank and its subsidiaries use valuation techniques and models which are extensively
used by the market to estimate their fair value. The parameters used in the valuation model for these kinds of financial instruments usually
use the observable information as the input.
For more complicated financial instruments, such as debt instruments with embedded derivative instruments or securitization products, the
Bank and its subsidiaries develop its own valuation models to estimate fair value by reference to the valuation techniques and methods which
are extensively used by the same trade. Parts of parameters used in these valuation models are not observable from the market; they must
be estimated by using some assumptions.