Asus 2011 Annual Report Download - page 108

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retained earnings. An excess of the sum of the par value and premium on stock of treasury
stock over its carrying value should be credited to additional paid-in capital from the same
class of treasury stock transactions.
C. The cost of treasury stock is accounted for on a weighted-average basis.
(14) Employees’ bonuses and directors’ and supervisors’ remuneration and share-based payment
Pursuant to Interpretation (96) 052 issued by the ARDF, the costs of employees’ bonuses and
directors’ and supervisors’ remuneration are accounted for as expenses and liabilities, provided
that such recognition is required under legal or constructive obligation and the amounts can be
estimated reasonably. However, if the accrued amounts for employees’ bonuses and directors’ and
supervisors’ remuneration are significantly different from the distributed amounts resolved by the
Board of Directors, then the differences shall be adjusted in current year’s gain or loss (the year of
recognition) and, if the accrued amounts for employees’ bonus and directors’ 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 treated as accounting estimate difference. 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 SFAS No. 39 to account for the transfer of equity instruments from
shareholders to the Group’s employees.
(15) Earnings per share
A. 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 from the capitalization of
additional paid-in capital or retained earnings.
B. 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.
(16) Revenues, costs and expenses
The Company recognizes revenue when the 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.