Net Income and Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2018

Analysis Of Income And Expense [Abstract]

Net Income and Other Comprehensive Income (Loss)

31. NET INCOME AND OTHER COMPREHENSIVE INCOME (LOSS)

a. Other income and expenses

	Year Ended December 31
	2016			2017			2018
	NT$			NT$			NT$
	(In Millions)
Gain or loss on disposal of property, plant and equipment	$	(48	)	$	(107	)	$	142
Reversal of impairment loss on investment properties		148			11			19
Loss on disposal of intangible assets		—			—			—
Impairment loss on intangible assets		—			(9	)		(51	)
Impairment loss on property, plant and equipment		(596	)		—			—
	$	(496	)	$	(105	)	$	110

b. Other income

	Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$
			(In Millions)
Dividend income	$	391	$	328	$	396
Rental income		41		61		70
Income from Piping Fund		202		—		2
Others		438		447		232
	$	1,072	$	836	$	700

c. Other gains and losses

	Year Ended December 31
	2016			2017			2018
	NT$			NT$			NT$
	(In Millions)
Net foreign currency exchange gains or losses	$	181		$	(88	)	$	37
Gain on disposal of financial instruments		—			3			6
Gain or loss on disposal of investments accounted for using equity method		(2	)		—			—
Valuation gain or loss on financial assets and liabilities at fair value through profit or loss, net		(1	)		1			(21	)
Impairment loss on available-for-sale financial assets		(577	)		—			—
Others		(49	)		(48	)		(68	)
	$	(448	)	$	(132	)	$	(46	)

d. Impairment loss (reversal of impairment loss) on financial instruments

	Year Ended December 31
	2016			2017			2018
	NT$			NT$			NT$
	(In Millions)
Contract assets	$	—		$	—		$	19
Trade notes and accounts receivable	$	943		$	578		$	805
Available-for-sale financial assets	$	577		$	—		$	—
Other receivables	$	(2	)	$	65		$	96
Inventories	$	192		$	52		$	365
Property, plant and equipment	$	596		$	—		$	—
Investment properties	$	(148	)	$	(11	)	$	(19	)
Intangible assets	$	—		$	9		$	51

e. Depreciation and amortization expenses

	Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$
	(In Millions)
Property, plant and equipment	$	29,087	$	28,143	$	27,461
Investment properties		19		21		21
Intangible assets		3,379		3,766		4,386
Incremental costs of obtaining contracts		—		—		1,941
Total depreciation and amortization expenses	$	32,485	$	31,930	$	33,809
Depreciation expenses summarized by functions
Operating costs	$	27,214	$	26,402	$	25,996
Operating expenses		1,892		1,762		1,486
	$	29,106	$	28,164	$	27,482
Amortization expenses summarized by functions
Operating costs	$	3,042	$	3,473	$	6,085
Marketing expenses		173		154		113
General and administrative expenses		126		104		93
Research and development expenses		38		35		36
	$	3,379	$	3,766	$	6,327

f. Employee benefit expenses

	Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$
			(In Millions)
Post-employment benefit
Defined contribution plans	$	544	$	594	$	640
Defined benefit plans		2,822		2,834		2,953
		3,366		3,428		3,593
Share-based payment
Equity-settled share-based payment		17		22		17
Other employee benefit
Salaries		25,985		25,760		26,204
Insurance		2,652		2,748		2,740
Others		15,730		15,449		14,470
		44,367		43,957		43,414
Total employee benefit expenses	$	47,750	$	47,407	$	47,024
Summary by functions
Operating costs	$	25,190	$	24,725	$	24,367
Operating expenses		22,560		22,682		22,657
	$	47,750	$	47,407	$	47,024

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, 2018, the payables of the employees’ compensation and the remuneration to directors were $1,404 million and $38 million, respectively.  Such amounts have been approved by the Chunghwa’s Board of Directors on March 19, 2019 and will be reported to the stockholders in their meeting planned to be held on June 21, 2019.

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 2016 and 2017 approved by the Board of Directors on March 7, 2017 and March 13, 2018, respectively, were as follows.

	2016		2017
	Cash		Cash
	NT$		NT$
	(In Millions)
Compensation distributed to the    employees	$	1,702	$	1,596
Remuneration paid to the directors		42		41

There was no difference between the initial accrual amounts and the amounts proposed in the Board of Directors in 2017 and 2018 of the aforementioned compensation to employees and the remuneration to directors.

g. Reclassification adjustments of other comprehensive income or loss

	Year Ended December 31
	2016			2017
	NT$			NT$
	(In Millions)
Unrealized gain or loss on available-for-sale financial assets
Arising during the year	$	(721	)	$	605
Reclassification adjustments
Upon disposal		—			—
Upon impairment		577			—
	$	(144	)	$	605
Cash flow hedges
Gain arising during the year	$	15		$	3
Reclassification adjustments included in profit    or loss		(1	)		(2	)
Adjusted against the carrying amount of    hedged items		(15	)		(2	)
	$	(1	)	$	(1	)