Asus 2011 Annual Report Download - page 158

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These financial assets are subsequently measured at fair value with changes in fair value
recognized in profit or loss. Stocks of listed companies, convertible bonds and closed-end
funds are measured at closing prices at the balance sheet date. Open-end funds are
measured at the unit price of the net assets at the balance sheet date.
(B) Available-for-sale financial assets
Available-for-sale financial assets are those non-derivative financial assets that are
designated as available for sale or not classified as financial assets at fair value through
profit or loss, held-to-maturity financial assets, or loans and receivables. These assets are
then measured at fair value. The difference adjustments arising from change in fair value,
excluding impairment loss and exchange gain or loss from the translation of monetary
financial assets denominated in foreign currencies which are recognized in current profit
or loss, are recognized in a separate component of stockholders’ equity until such
investment is reclassified or disposed of, upon which the cumulative separate component
of stockholders’ equity is transferred to current profit or loss.
(C) Financial assets carried at cost
Equity investments without reliable market prices, including emerging and other unlisted
stocks or private fund, are measured at cost. If objective evidence of impairment exists,
the Group recognizes impairment loss, which is not reversed in subsequent periods.
(D) Derivative financial assets and liabilities for hedging
The Group recognizes the offsetting effects on profit or loss of changes in the fair values
of the hedging instrument and the hedged item when hedging relationships meet the
criteria for hedge accounting which is accounted for as follows:
a. Fair value hedge: Changes in the fair value of a hedging instrument designated as a
fair value hedge are recognized in current profit or loss. The hedged item also is stated
at fair value in respect of the risk being hedged, with any gain or loss being recognized
in current profit or loss.
b. Cash flow hedge: Changes in the fair value of a hedging instrument designated as a
cash flow hedge are recognized directly in equity. If a hedge of a expected transaction
subsequently results in the recognition of an asset or a liability, then the amount
recognized in equity is reclassified into profit or loss in the same period or periods
during which the asset acquired or liability assumed affects profit or loss. For hedges
other than those covered by the preceding statement, the associated cumulative gain or
loss is removed from equity and recognized in profit or loss in the same period or
periods during which the hedged forecast transaction affects profit or loss.
C. Subsequent to initial recognition, the Group measures all financial liabilities at amortized cost
except for financial liabilities at fair value through profit or loss, which are measured at fair
value.