Asus 2010 Annual Report Download - page 100

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over the re-estimated useful lives. The estimated useful lives of buildings are 3~50 years,
machinery and equipment are 3~8 years and other equipment are 2~15 years.
(9) Intangible assets and deferred expenses
Intangible assets represent computer software, which are amortized using the straight-line
method over 3 years. Deferred expenses represent office decorations, which are amortized
using the straight-line method over 2 ~ 5 years.
(10) Impairment of non-financial assets
A. The Company assesses all applicable assets subject to R.O.C. Statement of Financial
Accounting Standards (‘SFAS’) No. 35 for indication of impairment on the balance sheet
date. If any indication of impairment exists, the Company then compares the carrying
amount with the recoverable amount of the assets or the cash-generating unit (“CGU”)
and writes down the carrying amount to the recoverable amount. If the recoverable
amount of an asset other than goodwill has increased as a result of the increase in its
estimated service potential, the Company reverses the impairment loss to the extent that
the carrying amount after the reversal would not exceed the amount (net of amortization
or depreciation) that would otherwise result had no impairment loss been recognized in
prior periods.
B. The Company assesses the goodwill and intangible assets that have indefinite lives or that
are not yet available for use periodically on an annual basis and recognizes an impairment
loss on the carrying value in excess of the recoverable amount. The loss is first recorded
against the goodwill allocated to the CGU, with any remaining loss allocated to other
assets on a pro rata basis proportionate to their carrying amounts. The write-down of
goodwill cannot be reversed in subsequent periods under any circumstances.
(11) Convertible bonds payable
A. According to R.O.C. SFAS No. 36, “Financial Instruments: Disclosure and Presentation”
and Interpretation (95) 078 by the Accounting Research and Development Foundation
(ARDF), convertible bonds with a put option issued by the Company before December 31,
2005, are accounted for in accordance with SFAS No. 21. The derivative instrument
embedded in a non-derivative host debt instrument is not separated from the equity
component of the instrument. Costs incurred for the issuance of redeemable convertible
bonds are deferred and amortized during the period between the issuance date and the last
redeemable date.
B. Bonds issued after January 1, 2006 are accounted for in accordance with R.O.C. SFAS No.
36 and Interpretations (95) 290, (97) 331 and (98) 046 by the ARDF as follows:
(A) The issuance costs are allocated to the related liability and equity components in
proportion of the initially recognized amounts.
(B) Convertible bonds bearing a clause on conversion price adjustment based on stock
market price do not include the equity component. For the liability components, the
fair value of the conversion right and call/put option is determined first, and then the
book value of main debt component is determined based on the net amount of the