（Actual Cost of Asset）
Initial recognition of assets and liabilities, as a matter of principle, shall be based on the cost.

An item that satisfies definition of an element of financial statements should be recognized in the balance sheet or statement of profit or loss and other comprehensive income if:
1. It is probable that any future economic benefit associated with the item will flow to or from the business entity; and
2. The item has a cost or value that can be measured with reliability.

Business entities shall select measurement bases for recognizing financial statement items in a manner appropriate to the requirements of circumstances. Common measurement bases include historical cost, fair value, realizable value, or other measurement bases.

（Asset Exchange and Donated Asset）
An asset acquired in exchange for non-monetary assets, a business shall measure the cost of the acquired asset at fair value. If the fair value cannot be measured reliably, the asset’s cost is measured at the carrying amount of the asset given up.
Donated assets must be recorded on the basis of fair value and classified as capital surplus, revenue or deferred revenue depending on their nature.

（Inventories）
Inventory cost may be calculated by using specific identification method, first-in first-out method or average method.
Inventories shall be measured at the lower of cost and net realizable value. If the cost of inventories is higher than net realizable value, inventories shall be written down below cost to net realizable value, and the amount of the write-down shall be recognized as cost of sales in the period the write-down occurs.

（Securities）
Financial instrument shall be measured by using fair value, cost, and amortized cost depending on the nature thereof.
Long-term securities investment with power of control or major influence shall be used the equity method.

（Allowance for Uncollectible Receivable）
Receivables must be measured by their amounts less the estimated allowance for uncollectible accounts, and items of allowance for uncollectible accounts must be respectively established. Where the receivable becomes definitely uncollectible, the relevant item must be written off.
Accounts receivable and notes receivable resulting from operating activities must be separately recorded from accounts receivable and notes receivable resulting from non-operating activities.

（Accumulated Depreciation）
For re-measurement of depreciable assets, accumulated depreciation items must be established and presented as deductions of the respective assets. Assets must be depreciated on annual basis.
When depreciation of assets is computed, the salvage value must be estimated. If the salvage value can be deducted according to the depreciation method, the balance after deduction of the salvage value must be used as the basis for the computation.
If an asset can continue to be used after expiration of its duration limit, it can continue to be depreciated using the salvage value thereof.

（Method of Depreciation）
Assets must be depreciated by using straight-line method, fixed percentage on diminishing book value method, sum-of-years’-digits method, production method, working-hour method or other depreciation methods approved by the central competent authority. Where the assets belong to different categories, the depreciation may be computed separately based on different categories.

（Capital Expenditure and Revenue Expenditure）
Expenditure that will benefit the subsequent periods is considered as an asset. Expenditure that benefits only the current period or has no benefit at all must be considered as an expense or loss.

（Depletable Asset）
An accumulated depletion item must be established for depletion assets, and the depletion expense must be recorded for each period.

（Intangible Asset）
For purchased goodwill, trademarks, patents, copyrights, franchises, and other intangible assets, the cost must be the acquisition cost.
If the intangible assets referred to in the preceding Paragraph are self-developed, only the cost for registration or finished creative work can be recorded as acquisition cost. The research and development costs incurred must be recorded as current expenses. However, in the event of stipulations provided otherwise by the competent authority, this limit does not apply.

（Reevaluation and Adjustment of Asset）
Business may revalue assets according to laws and regulations.

（Processing of Reevaluation）
The surplus incurred due to revaluation or adjustment of assets processed in accordance to the preceding Article must be recorded as unrealized reevaluation surplus.
The revalued assets must be recorded at the revalued amount. From the year following the year of revaluation, the depreciation, depletion, or amortization of the revalued assets must be calculated based on the revalued amount.

（Deferred Expenses）
Prepaid expenses are those which will bring future economic benefit and be charged to future periods. Prepaid expenses must be measured on the basis of the portion of amount covering the unexpired period.

（Liabilities）
Liabilities must be recorded based on the discounted value of the amount payable when due. However, liabilities incurred as a result of operation or trade or liabilities expected to be cleared within one year can be recorded using the amount to be paid back at maturity.
The premium or discount of corporate bonds must be recorded as an addition or deduction of the par value of the bonds.

（Evaluation of Capital Paid by Properties）
Capital paid by properties other than cash must be recorded on the basis of the fair value of such properties. If the fair value is not available, an estimate may be made.

（Accounting Consistent Principle）
The recording basis and processing method of accounting events must be consistent; in the event of modifications required by justified causes, explanations with regard to the cause, modification and impact thereof must be made in the financial statement.

（Merger, Dissolution, Termination or Transfer）
In case of mergers, spin-offs, acquisitions, dissolutions, terminations or transfers of business, as a matter of principle, assets shall be accounted for based on fair value, carrying amount, or transaction price.