Acer 2007 Annual Report Download - page 104

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101
- 94 -
2. Notes and accounts receivable from:
December 31, 2006 December 31, 2007
NT$ NT$ US$
eLIFE 156,988 190,277 5,866
COWIN 149,738 86,676 2,672
SAL 73,020 82,230 2,535
WPH 64,837 395 12
WEKS 244,308 - -
WIKS 122,012 - -
WKS 78,165 - -
Others (individually less than 5%) 51,882 88,903 2,742
940,950 448,481 13,827
(2) Purchases and related notes and accounts payable
1. Purchases from:
2006 2007
NT$ NT$ US$
Wistron 9,936,483 14,788,985 455,958
AU 4,067,105 - -
Others 101,491 296,079 9,128
14,105,079 15,085,064 465,086
Trading terms with related parties are not significantly different from the terms with
third-party suppliers.
In 2006 and 2007, the Consolidated Companies sold raw material to Wistron and
purchased back the finished goods after manufacture. To avoid overstating the
revenues, sales of raw material to Wistron amounting to NT$36,730,724 and
NT$58,666,096 for the years ended December 31, 2006 and 2007, respectively, were
excluded from the consolidated revenues. Having legally enforceable rights, the
Consolidated Companies offset the outstanding receivables and payables resulting
from the above-mentioned transactions. The offset resulted in a payable balance.
2. Notes and accounts payable to:
December 31, 2006 December 31, 2007
NT$ NT$ US$
Wistron 787,654 4,510,376 139,059
Others 36,634 73,239 2,258
824,288 4,583,615 141,317
(3) Spin-off of assets
On February 28, 2002, AI spun off its design, manufacturing and services business from
its Acer-brand business and transferred the related operating assets and liabilities to
Wistron. The Company agreed with Wistron that Wistron is obligated to pay for the
deferred income tax assets being transferred only when they are actually utilized. In
2006, the ROC income tax authorities examined and rejected Wistron’s claim of
investment credits transferred from the spin-off in the income tax returns for 2002, 2003,
and 2004. Wistron disagreed with the assessment and filed a request with the tax
authorities for a recheck of its 2002, 2003 and 2004 income tax returns. To be
conservative, the Company recognized income tax expense of NT$875,802 based on total
tax impact estimated in 2006 and provided a valuation allowance of NT$385,043 against
the receivables from Wistron as of December 31, 2006 and 2007. The remaining balance
of $490,759 was recorded as other payables to related parties.
(4) Other expenses
In 2006 and 2007, the Consolidated Companies paid iD Soft Capital Inc. management
service fees amounting to NT$78,500 and NT$69,333, respectively.