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ACER INCORPORATED
2010 ANNUAL REPORT
108
FINANCIAL STANDING
109
agreed days. As of December 31, 2009 and 2010, the Company was in compliance with all such nancial
covenants.
(19) Retirement plans
The following table sets forth the actuarial information related to the Consolidated Companies’ defined
benet retirement plans:
(a) Reconciliation of funded status of the retirement plans to prepaid pension cost (accrued pension
liabilities):
2009
Plan assets in excess of
accumulated benet obligation
Accumulated benet obligation in
excess of plan assets
NT$ NT$
Benet obligation:
Vested benet obligation (180,819) (22,077)
Non-vested benet obligation (392,082) (38,627)
Accumulated benet obligation (572,901) (60,704)
Projected compensation increases (389,885) (44,955)
Projected benet obligation (962,786) (105,659)
Plan assets at fair value 724,116 21,861
Funded status (238,670) (83,798)
Unrecognized pension loss 433,063 45,370
Unrecognized transition obligation 15,891 3,316
Minimum pension liability adjustment - (3,731)
Prepaid pension cost (accrued pension liabilities) 210,284 (38,843)
2010
Plan assets in excess of accumulated
benet obligation
Accumulated benet obligation
in excess of plan assets
NT$ US$ NT$ US$
Benet obligation:
Vested benet obligation (156,087) (5,358) (15,463) (531)
Non-vested benet obligation (551,322) (18,926) (48,745) (1,673)
Accumulated benet obligation (707,409) (24,284) (64,208) (2,204)
Projected compensation increases (843,628) (28,961) (50,197) (1,723)
Projected benet obligation (1,551,037) (53,245) (114,405) (3,927)
Plan assets at fair value 860,013 29,523 23,268 799
Funded status (691,024) (23,722) (91,137) (3,128)
Unrecognized pension loss 978,940 33,606 62,732 2,154
Unrecognized transition obligation 20,672 709 2,947 101
Minimum pension liability adjustment - - (15,482) (532)
Prepaid pension cost (accrued pension liabilities) 308,588 10,593 (40,940) (1,405)
Accrued pension liabilities are included in “other liabilities” in the accompanying consolidated balance
sheets. Prepaid pension cost is included in “deferred charges and other assets” in the accompanying
consolidated balance sheets.
(b) The components of the net periodic pension cost were as follows:
2009 2010
NT$ NT$ US$
Service cost 51,634 44,870 1,540
Interest cost 26,954 26,801 920
Actual return on plan assets (6,087) (9,856) (338)
Amortization and deferral 7,222 7,134 245
Effect of pension plan curtailments 52,502 - -
Net periodic pension cost 132,225 68,949 2,367
(c) The principal actuarial assumptions used were as follows:
2009 2010
Discount rate 2.25% 1.75%
Rate of increase in future compensation 3.00% 3.00%~5.00%
Expected rate of return on plan assets 2.25% 1.75%
In 2009 and 2010, pension cost under the dened contribution retirement plans amounted to NT$331,469
and NT$439,411, respectively.
(20) Income taxes
(a) Income tax returns of the Consolidated Companies are led individually by each entity and not on a
combined basis. The components of income tax expense from continuing operations were as follows:
2009 2010
NT$ NT$ US$
Current income tax expense 4,581,450 5,154,886 176,961
Deferred income tax benet (951,327) (943,639) (32,394)
3,630,123 4,211,247 144,567
(b) The 2010 statutory corporate income tax rate for prot-seeking enterprises was reduced from 25% to
20% according to the amended ROC Income Tax Act announced issued on May 27, 2009, and was
further reduced from 20% to 17%, according to the amended ROC Income Tax Act announced on
June 15, 2010. Therefore, the statutory income tax rates applicable to the Company and its domestic
subsidiaries which are subject to the ROC Income Tax Act for the years ended December 31, 2009
and 2010 were 25% and 17%, respectively. In addition, an alternative minimum tax (“AMT”) in
accordance with the Income Basic Tax Act is calculated. Other foreign subsidiaries calculated income
tax in accordance with tax laws and regulations of the countries and jurisdictions where the respective
subsidiaries were incorporated.
The income tax calculated on the pre-tax income at the Company’s statutory income tax rate was
reconciled with the income tax expense reported in the accompanying consolidated statements of income
as follows.