Asus 2010 Annual Report Download - page 154

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and supervisors’ remuneration are significantly different from the actual distributed amounts
resolved by the stockholders at their annual stockholders’ meeting subsequently, the
differences shall be recognized as gain or loss in the following year. In addition, according to
Interpretation (97) 127 issued by the ARDF, the Company calculates the number of shares of
employees’ stock bonus based on the closing price of the Company’s common stock at the
previous day of the stockholders’ meeting held in the year following the financial reporting
year, and after taking into account the effects of ex-rights and ex-dividends. The Company
adopts R.O.C. SFAS No. 39 to account for the transfer of equity instruments from
shareholders to the Group’s employees.
19) Earnings per share
(1) 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 prior period is
retroactively adjusted to reflect the effects of new shares issued from the capitalization of
additional paid-in capital or retained earnings.
(2) 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 dilutive 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.
20) Revenues, costs and expenses
The Group recognizes revenue when the revenue earning process has been significantly
completed, which means the revenue has been realized or is readily realizable and earned.
Cost is recognized when the related revenue is accrued; expenses are recognized as current
expenses when incurred.
21) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts of
assets and liabilities and the disclosures of contingent assets and liabilities at the date of the
financial statements and the amounts of revenues and expenses during the reporting period.
Actual results could differ from those assumptions and estimates.
22) Spin-off transaction
The Company resolved to spin off its OEM assets and businesses. The Group adopted
Interpretation (91) 128, Interpretation (91) 106 and 107 issued by the ARDF to account for its
spin-off transactions. Since the transferee company continues the transferor company’s
economic activities, the Company did not record any gain or loss from the said spin-off
transaction but has adjusted the net assets and long-term equity investment related additional
paid-in capital and other equity account against retained earnings or other components.