Acer 2007 Annual Report Download - page 77

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74
used in operations” and are stated at the lower of
cost or market value. The market value of land
is determined by independent appraisers.
Property leased to others and property not in use
are classied to other assets and continue to be
depreciated and tested for impairment.
Depreciation is provided for property, plant
and equipment, property leased to others, and
property not in use over the estimated useful life
using the straight-line method. The estimated
useful lives of the respective classes of assets are
as follows :
1. Buildings and improvements: 20~50 years
2. Computer equipment and machinery: 3~5years
3. Transportation equipment: 3~5 years
4. Ofce and other equipment: 3~10 years
5. Leasehold improvement: 1~10 years
(n) Intangible assets
Goodwill arising from a business combination
was previously amortized using the straight-line
method over five years. Effective January 1,
2006, and in accordance with the amended SFAS
No. 1 “Conceptual Framework for Financial
Accounting and Preparation of Financial
Statements”, goodwill is no longer amortized but
is tested for impairment annually.
Other intangible assets are stated at cost.
Intangible assets with a finite useful life are
amortized using the straight-line method over
the expected useful lives. The estimated useful
lives are as follows:
1. Patents: 10~16 years
2. Purchased software: 3~7 years
3. Customer relationships: 10 years
4. Trademarks and trade names: 20 years
The Gateway trademark and trade name are an
intangible asset with an indefinite useful life
and shall not be amortized, but it is subject to
annual impairment test. The useful life of an
intangible asset that is not being amortized shall
be reviewed each period to determine whether
events and circumstances continue to support
an indefinite useful life assessment for that
asset. If they do not, the change in the useful
life assessment from indefinite to finite shall
be accounted for as a change in accounting
estimate.
Effective January 1, 2007, the Consolidated
Companies adopted SFAS No. 37 “Intangible
Assets”. At initial adoption, the Consolidated
Companies reassessed the useful lives and
amortization methods of the recognized
intangible assets. No change has been made.
(o) Non-nancial asset impairment
The Consolidated Companies assess at each
balance sheet date whether there is any indication
that long-lived assets and certain identifiable
intangible assets may have been impaired. If
any such indication exists, the Consolidated
Companies estimate the recoverable amount
of the assets. The Consolidated Companies
recognize impairment loss for an asset whose
carrying value is higher than the recoverable
amount. An impairment loss recognized in prior