Accounting items shall be classified by financial statement elements.
A business entity may increase or decrease any accounting item based on actual operating needs.

（Content of Financial Statement）
The financial statements comprises of:
1. A statement of financial position
2. A statement of comprehensive income.
3. A statement of cash flows.
4. A statement of changes in equity.
The financial statements must be supplemented with necessary notes which are an integral part of the complete set of financial statements.

The balance sheet represents the financial position of the business entity as at the end of the period. The elements directly related to the measurements of financial position in the balance sheet are:
1. Assets: the resource controlled by the business entity as a result of past events and from which future economic benefits are expected to flow to the business entity.
2. Liabilities: the present obligation of the business entity arising from past events, the settlement of which is expected to result in an outflow from the business entity of resources embodying economic benefits.
3. Equity: the residual interest in the assts of the business entity after deducting all its liabilities.

The statement of comprehensive income represents the financil performance of the business entity for the period. The elements directly related to the measurement of financial performance are:
1. Income: increases in ecomomic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.
2. Expenses: decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

（Notes to Financial Statements）
A business entity presents following disclosures in the notes to financial statements:
1. Statement of compliance with this Act and legal orders determined pursuant to the authorization of this Act.
2. Measurement bases used in the prepartion of financial statemnets as well as other accounting policies used that are relevant to an understanding of the financail statements.
3. The nature of the chnage in accounting policy as well as the reasons of the change and the amount of adjustments.
4. Creditors’ rights on specified assets.
5. Critiria on the separate classification of current and non-current assets and liabilities.
6. Material contingent liabilities and unrecognized contractual commitments.
7. Restrictions on earnings distribution
8. Significant events affecting equity.
9. Significant subsequent events.
10. Other necessary disclosures that avoid users misinterpreting financial statements or help to achieve fair presentation.
Business entities may include supporting information for items presented in financial statements in the notes to the financial statements based upon the actual requirement of circumstances.

（Periodical and Non-periodical Statement）
Financial statements must be prepared based on fiscal years, provided that other periodical and non-periodical statements may be prepared. However, such limit does not apply to various additional periodical and non-periodical statements.

（Classification of Titles for Financial Statements）
Items in financial statements shall be classified in a manner appropriate to the requirements of circumstances or laws. Business entities shall retain the presentation and classification of items in the financial statements from one period to the next. When business entities change the presentation or classification of items in the financial statements, the comparative amounts shall be reclassified in addition to proper disclosure on the reclassification.

（Format of Financial Statement）
A business, unless newly established, must prepare comparative financial statement for two consecutive years by disclosing the amounts in both the current year and previous year.