Mega Bank Annual Report 2017

43 Annual Report 2017 -43- The management has to make certain significant accounting estimates based on their professional judgment and decide the accounting policy according to the IFRSs as endorsed by the FSC. Any change in the assumption could result in a significant change in the financial statements. The management of the Bank and subsidiaries believes that the assumptions used in the consolidated statements are appropriate. For highly complicated matters, matters requiring high level of judgments, significant judgments that could have an impact on the consolidated financial statements and estimates and key sources of assumption uncertainty, please refer to Note 5 for further details. (3) Basis for preparation of consolidated financial statements A. All subsidiaries are included in the Bank and subsidiaries’ consolidated financial statements. Subsidiaries are all entities controlled by the Bank. The Bank controls an entity when the Bank is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Bank obtains control of the subsidiaries and ceases when the Bank loses control of the subsidiaries. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Bank and subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Bank. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent. Total comprehensive income is also attributed to the owners of the parent. B. Subsidiaries included in the consolidated financial statements: Name of investor Name of subsidiaries Major business activities Percentage of holding shares (%) December 31, 2017 December 31, 2016 The Bank Mega International Commercial Bank (Canada) Commercial Banking 100.00 100.00 The Bank Mega International Commercial Public Co., Ltd.(Thailand) Commercial Banking 100.00 100.00 C. Subsidiaries not included in the consolidated financial statements: Name of investor Name of subsidiaries Major business activities Percentage of holding shares (%) December 31, 2017 December 31, 2016 The Bank Cathay Investment & Development Corporation (Bahamas) International Investment & Exploration 100.00 100.00 The Bank Mega Management Consulting Co., Ltd. Venture capital and management consulting etc. 100.00 100.00 The Bank Cathay Investment & Warehousing Co., S.A. 1.Storage and warehousing of imported commodities 2.Manage and make the investment for the business in foreign trade business 100.00 100.00 The Bank Ramlett Finance Holdings Inc. Real estate investment industry 100.00 100.00 The Bank Yung-Shing Industries Co. Packaging, printing and agency of manpower service 99.56 99.56 The Bank China Products Trading Company Investments in products businesses, storage businesses and other businesses 68.27 68.27 Yung-Shing Industries Co. Win Card Co., Ltd Corporate management consulting, data processing business and general advertising services 100.00 100.00 Yung-Shing Industries Co. ICBC Asset Management & Consulting Co., Ltd Investment consulting, corporate management consulting and venture investment management consulting 100.00 100.00 As the individual total assets or operating revenue amounts of the above subsidiaries are immaterial, the accounts of these subsidiaries are not included in the Bank’s consolidated financial statements although the Bank holds more than 50% equity interest in the se subsidiaries. The investments of certain subsidiaries are accounted for under equity method. D. Adjustments for subsidiaries with different balance sheet dates Ǻ None. E. Nature and extent of the restrictions on fund remittance from subsidiaries to the parent company:None. (4) Foreign currency translations A. Functional and presentation currency Items included in the financial statements of each of the Bank and subsidiaries’ entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated f inancial statements are presented in New Taiwan Dollars, which is the Bank’s functional and the Bank and subsidiaries’ presentation currency. B. Transactions and balances The transactions denominated in foreign currency or to be settled in foreign currency are translated into a functional currency at the spot exchange rate between the functional currency and the underlying foreign currency on the date of the transaction. Foreign currency monetary items should be reported using the closing rate (market exchange rate) at the date of each balance sheet. When multiple exchange rates are available for use, they should be reported using the rate that would be used to settle the future cash