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Net Income and Other Comprehensive Income (Loss)
 12 Months Ended
Dec. 31, 2019
Analysis Of Income And Expense [Abstract]  
Net Income and Other Comprehensive Income (Loss)

30.

NET INCOME AND OTHER COMPREHENSIVE INCOME (LOSS)

 

a.

Other income and expenses

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Gain (loss) on disposal of property, plant and equipment

 

$

(107

)

 

$

142

 

 

$

(38

)

Impairment loss on property, plant and equipment

 

 

—

 

 

 

—

 

 

 

(93

)

Reversal of impairment loss on investment properties

 

 

11

 

 

 

19

 

 

 

57

 

Loss on disposal of intangible assets

 

 

—

 

 

 

—

 

 

 

—

 

Impairment loss on intangible assets

 

 

(9

)

 

 

(51

)

 

 

(9

)

Impairment loss on other assets

 

 

—

 

 

 

—

 

 

 

(44

)

 

 

$

(105

)

 

$

110

 

 

$

(127

)

 

 

b.

Other income

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

 

 

 

 

(In Millions)

 

 

 

 

 

Dividend income

 

$

328

 

 

$

396

 

 

$

296

 

Rental income

 

 

61

 

 

 

70

 

 

 

85

 

Others

 

 

447

 

 

 

234

 

 

 

150

 

 

 

$

836

 

 

$

700

 

 

$

531

 

 

 

c.

Other gains and losses

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Foreign currency exchange gain or loss, net

 

$

(88

)

 

$

37

 

 

$

16

 

Gain or loss on disposal of investments accounted for using equity method

 

 

—

 

 

 

—

 

 

 

151

 

Gain on disposal of financial instruments

 

 

3

 

 

 

6

 

 

 

4

 

Valuation gain or loss on financial assets and liabilities at fair value through profit or loss, net

 

 

1

 

 

 

(21

)

 

 

(38

)

Others

 

 

(48

)

 

 

(68

)

 

 

(49

)

 

 

$

(132

)

 

$

(46

)

 

$

84

 

The Company disposed non-listed available-for-sale financial assets with carrying amounts of $5 million and recognized the gains on disposal of $3 million for the year ended December 31, 2017.

 

 

d.

Interest expenses

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

 

 

 

 

(In Millions)

 

 

 

 

 

Interest on lease liabilities

 

$

—

 

 

$

—

 

 

$

85

 

Other interest expenses

 

 

22

 

 

 

18

 

 

 

19

 

 

 

$

22

 

 

$

18

 

 

$

104

 

 

e.

Impairment loss (reversal of impairment loss) on financial instruments

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Contract assets

 

$

—

 

 

$

19

 

 

$

(2

)

Trade notes and accounts receivable

 

$

578

 

 

$

805

 

 

$

(54

)

Other receivables

 

$

65

 

 

$

96

 

 

$

(69

)

Inventories

 

$

52

 

 

$

365

 

 

$

475

 

Property, plant and equipment

 

$

—

 

 

$

—

 

 

$

93

 

Investment properties

 

$

(11

)

 

$

(19

)

 

$

(57

)

Intangible assets

 

$

9

 

 

$

51

 

 

$

9

 

Other assets

 

$

—

 

 

$

—

 

 

$

44

 

 

 

f.

Depreciation and amortization expenses

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Property, plant and equipment

 

$

28,143

 

 

$

27,461

 

 

$

26,930

 

Right-of-use assets

 

$

—

 

 

$

—

 

 

$

3,968

 

Investment properties

 

 

21

 

 

 

21

 

 

 

25

 

Intangible assets

 

 

3,766

 

 

 

4,386

 

 

 

4,253

 

Incremental costs of obtaining contracts

 

 

—

 

 

 

1,941

 

 

 

1,173

 

Total depreciation and amortization expenses

 

$

31,930

 

 

$

33,809

 

 

$

36,349

 

Depreciation expenses summarized by functions

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

$

26,402

 

 

$

25,996

 

 

$

28,957

 

Operating expenses

 

 

1,762

 

 

 

1,486

 

 

 

1,966

 

 

 

$

28,164

 

 

$

27,482

 

 

$

30,923

 

Amortization expenses summarized by functions

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

$

3,473

 

 

$

6,085

 

 

$

5,196

 

Marketing expenses

 

 

154

 

 

 

113

 

 

 

96

 

General and administrative expenses

 

 

104

 

 

 

93

 

 

 

95

 

Research and development expenses

 

 

35

 

 

 

36

 

 

 

39

 

 

 

$

3,766

 

 

$

6,327

 

 

$

5,426

 

 

 

g.

Employee benefit expenses

 

 

Year Ended December 31

 

 

 

2017

 

 

2018

 

 

2019

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

 

 

 

 

(In Millions)

 

 

 

 

 

Post-employment benefit

 

 

 

 

 

 

 

 

 

 

 

 

Defined contribution plans

 

$

594

 

 

$

640

 

 

$

654

 

Defined benefit plans

 

 

2,834

 

 

 

2,953

 

 

 

2,859

 

 

 

 

3,428

 

 

 

3,593

 

 

 

3,513

 

Share-based payment

 

 

 

 

 

 

 

 

 

 

 

 

Equity-settled share-based payment

 

 

22

 

 

 

17

 

 

 

2

 

Other employee benefit

 

 

 

 

 

 

 

 

 

 

 

 

Salaries

 

 

25,760

 

 

 

26,204

 

 

 

25,464

 

Insurance

 

 

2,748

 

 

 

2,740

 

 

 

2,746

 

Others

 

 

15,449

 

 

 

14,470

 

 

 

14,430

 

 

 

 

43,957

 

 

 

43,414

 

 

 

42,640

 

Total employee benefit expenses

 

$

47,407

 

 

$

47,024

 

 

$

46,155

 

Summary by functions

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

$

24,725

 

 

$

24,367

 

 

$

23,587

 

Operating expenses

 

 

22,682

 

 

 

22,657

 

 

 

22,568

 

 

 

$

47,407

 

 

$

47,024

 

 

$

46,155

 

 

Chunghwa distributes employees’ compensation at the rates from 1.7% to 4.3% and remuneration to directors not higher than 0.17%, respectively, of pre-tax income.  As of December 31, 2019, the payables of the employees’ compensation and the remuneration to directors were $1,126 million and $35 million, respectively.  Such amounts have been approved by the Chunghwa’s Board of Directors on February 26, 2020 and will be reported to the stockholders in their meeting planned to be held on May 29, 2020.

If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in accounting estimate.

The compensation to the employees and remuneration to the directors of 2017 and 2018 approved by the Board of Directors on March 13, 2018 and March 19, 2019, respectively, were as follows.

 

 

2017

 

 

2018

 

 

 

Cash

 

 

Cash

 

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Compensation distributed to the

   employees

 

$

1,596

 

 

$

1,404

 

Remuneration paid to the directors

 

 

41

 

 

 

38

 

 

There was no difference between the initial accrual amounts and the amounts proposed in the Board of Directors in 2018 and 2019 of the aforementioned compensation to employees and the remuneration to directors.

 

h.

Reclassification adjustments of other comprehensive income or loss

 

 

Year Ended

December 31, 2017

 

 

 

NT$

 

 

 

(In Millions)

 

Unrealized gain or loss on available-for-sale financial assets

 

 

 

 

Arising during the year

 

$

605

 

Reclassification adjustments

 

 

 

 

Upon disposal

 

 

—

 

 

 

$

605

 

Cash flow hedges

 

 

 

 

Gain arising during the year

 

$

3

 

Reclassification adjustments included in profit

   or loss

 

 

(2

)

Adjusted against the carrying amount of

   hedged items

 

 

(2

)

 

 

$

(1

)