Page 168 - 2017 TSMC Annual Report

Allocate the transaction price to the performance obligations in the contract; and Recognize revenue when the entity satisfies a performance obligation.
The Company elects only to retrospectively apply IFRS 15 to contracts that were not completed on January 1, 2018 and elects not to restate prior reporting period with the cumulative effect of the initial application recognized at the date of initial application.
The anticipated impact on assets, liabilities and equity when retrospectively applying IFRS 15 on January 1, 2018 is detailed below:
Carrying Amount as of December 31, 2017
(IAS 18 and Revenue-related Interpretations)
Inventories $ 73,880,747 Other financial assets-current 7,253,114 Investments accounted for using
equity method 17,861,488 Total effect on assets
Provisions - current 13,961,787 Accrued expenses and other
current liabilities 65,588,396
Total effect on liabilities
Retained earnings 1,233,362,010 Non-controlling interests 702,110
Total effect on equity
Adjustments Arising from Initial Application
Carrying Amount as of January 1, 2018
(IFRS 15) Note
$ (19,746) $ 73,861,001 (1) 34,177 7,287,291 (1)
19,483 17,880,971 (1) $ 33,914
$ (13,961,787) - (2) 13,961,787 79,550,183 (2)
$ -
$ 32,029 1,233,394,039 (1) 1,885 703,995 (1)
$ 33,914
(1) Prior to the application of IFRS 15, the Company recognizes revenue based on the accounting treatment of the sales of goods. Under IFRS 15, certain subsidiaries and associates accounted for using equity method will change to recognize revenue over time because customers are deemed to have control over the products when the products are manufactured. As a result, the Company will recognize contract assets (classified under other financial assets) and adjust related assets and equity accordingly.
(2) Prior to the application of IFRS 15, the Company recognized the estimation of sales returns and allowance as provisions. Under IFRS 15, the Company recognizes such estimation as refund liability (classified under accrued expenses and other current liabilities).
Except for the aforementioned impact, as of the date the accompanying consolidated financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the other standards or interpretations. The related impact will be disclosed when the Company completes the evaluation.
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