Asus 2009 Annual Report Download - page 105

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ASUSTEK COMPUTER INC.
Notes to Financial Statements
When the equity of long-term equity investment under the equity method including unrealized gain
on financial instruments, foreign currency translation adjustments, net loss not recognized as
pension cost, and unrealized losses on cash flow hedges is changed, the changes in percentage of
ownership are reflected in those related accounts and long-term equity investment under the equity
method.
Unrealized inter-company profits or losses resulting from transactions between the Company and
its subsidiaries and investees accounted for under the equity method are deferred until realized.
The investees over which the Company has control are consolidated into the Company’ s financial
statements. The Company prepares consolidated financial statements on a quarterly basis.
(9) Property, plant and equipment, leased assets, idle assets, and depreciation
Property, plant and equipment are stated at cost. Cost associated with significant additions,
improvements, and replacements to property, plant and equipment are capitalized. Expenditures
for regular repairs and maintenance are charged against operating income.
Depreciation of property, plant and equipment is provided over the estimated useful lives of the
assets by using the straight-line method. If the property, plant and equipment have reached the
end of their estimated useful lives but are still in use, the Company will estimate their remaining
useful lives and residual value, and depreciate the residual value using the same method.
Property, plant and equipment leased to other parties under operating leases are classified as leased
assets. The related depreciation is accounted for as a reduction of rental income. The useful
lives of fixed assets, leased assets and idle assets are as follows:
A. Buildings and equipment: 3 to 50 years.
B. Machinery and equipment: 3 to 8 years.
C. Other equipment: 2 to 15 years.
Property, plant and equipment not currently used in operations are transferred to idle assets. The
cost, accumulated depreciation, and accumulated impairment of the original assets not currently
used in operations are all transferred to idle assets or other assets, and depreciated.
(10) Intangible assets and deferred expenses
Intangible assets represent computer software, which i s amortized using the straight-line method
over 3 years.
Deferred expenses represent office decorations, which are amortized using the straight-line
method over 2 to 5 years.