Asus 2009 Annual Report Download - page 164

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ASUSTeK COMPUTER INC. AND SUBSIDIARIES
Notes to Financial Statements
(Continued)
When treasury stock is retired, the weighted-average cost of the retired treasury stock is written off
against the par value of the shares and the paid-in capital derived from the issuance of shares in
excess of par value. If the weighted-average cost written off exceeds the sum of the par value and
the paid-in capital in excess of par value, the difference is debited to additional paid-in capital –
treasury stock arising from the same class of stock or to retained earnings, and if vice versa, the
difference is credited to additional paid-in capital – treasury stock.
(21) Earnings per share
Earnings per share of common stock is computed based on the weighted-average number of
common shares outstanding during the period. Earnings per share for the prior period is
retroactively adjusted to reflect the effects of new shares issued by transferring additional paid-in
capital, retained earnings, and employees’ bonuses approved in the annual stockholders’ meetings
held before and in 2008.
The convertible bonds and employee stock bonuses which have not yet been approved in the
stockholders’ meeting are potential common shares. Only basic earnings per share is disclosed if
there is no dilution effect. Otherwise, both basic and diluted earnings per share are disclosed.
For the purpose of calculating diluted earnings per share, the potential common shares are deemed
to have been converted into common stock at the beginning of the period, and the effect on net
income of the additional common shares outstanding is considered accordingly.
3. Changes in Accounting Policy and Their Influence
(1) Effective from January 1, 2009, the initial recognition and subsequent measurement of inventories
are made in accordance with R.O.C. SFAS No. 10 “Inventories”. Accordingly, net income
decreased by $1,053,208 and basic earnings per share decreased by 0.25 dollars for the year ended
December 31, 2009.
(2) Effective from January 1, 2008, the Group adopted R.O.C. SFAS No. 39 and Interpretation (96)
052 issued by the ARDF for share-based payment transaction. The adoption of these new
accounting principles decreased net income by $2,033,489 and basic earnings per share by NTD
0.48 for the year ended December 31, 2008. In accordance with Interpretation (97) 169 issued by
the ARDF, the new shares issued as employees’ bonuses in 2008 and later years are no longer
retroactively adjusted when calculating basic earnings per share and diluted earnings per share.
Employees’ bonuses issued in form of stock with dilutive effect are considered in the calculation
of diluted earnings per share. The Group adopted R.O.C. SFAS No. 39 “Share-based payment”
to account for the transfer of equity instruments from the Group and its shareholders to the
Company’ s or affiliated companies’ employees. Accordingly, net income decreased by $290,298
and basic earnings per share decreased by 0.07 dollars for the year ended December 31, 2008.