Asus 2010 Annual Report Download - page 151

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assets not currently used in operations are all transferred to idle assets, and depreciated.
(3) Depreciation is provided under the straight-line method over the estimated lives of the
assets. Salvage value of the fully depreciated assets that are still in use is depreciated
over the re-estimated useful lives. The estimated useful lives of buildings are 3~60
years, machinery and equipment are 2~10 years and other equipment are 1~20 years.
11) Intangible assets and deferred expenses
Intangible assets represent trademarks, technological know-how, computer software and land
use rights, which are amortized using the straight-line method over their estimated economic
lives. Deferred expense represents office decoration, molds and fixtures which are amortized
using the straight-line method over 1 ~ 5 years.
12) Impairment of non-financial assets
(1) The Group 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 Group 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 Group 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.
(2) The Group 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.
13) Convertible bonds payable
(1) 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 Group 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.
(2) 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.