Asus 2011 Annual Report Download - page 160

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C. When the equity of long-term equity investments under the equity method including unrealized
gain on financial instruments, foreign currency translation adjustments, net loss not recognized
as pension cost, and unrealized losses on cash flow hedges is changed, the changes in
percentage of ownership are reflected in those related accounts and long-term equity
investments under the equity method.
D. Unrealized inter-company profit or loss resulting from transactions between the Group and
investees accounted for under the equity method are accounted in unrealized gain on
inter-affiliate accounts and deferred until realized.
(8) Investment - land use right
Investment - land use right is stated at cost, and amortized using the average method over the
contract period. If an objective evidence of impairment exists and the recovery is remote, an
impairment loss is recognized.
(9) Property, plant and equipment, leased assets and idle assets
A. Property, plant and equipment are stated at cost. Cost associated with significant additions,
improvements, and replacements to property, plant and equipment are capitalized.
Expenditures for regular repairs and maintenance are charged against operating income.
B. Property, plant and equipment leased to other parties under operating leases are classified as
leased assets. The related depreciation is provided under the straight-line method based on the
assets’ estimated useful lives and accounted for as a reduction of rental income. Property, plant
and equipment not currently used in operations are transferred to idle assets. The cost,
accumulated depreciation, and accumulated impairment of the original assets not currently
used in operations are all transferred to idle assets and depreciated.
C. Depreciation is provided under the straight-line method over the estimated useful 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 are 3~60 years for buildings, 2~10 years
for machinery and equipment and 1~20 years for other property, plant and equipment.
(10) Intangible assets and deferred expenses
Intangible assets represent goodwill, trademarks, technology know-how, computer software and
land use rights. Goodwill and intangible assets with indefinite useful lives are subject to tests of
impairment every year, while others are amortized using the straight-line method over their
estimated economic lives. Deferred expenses represent office decoration, molds and fixtures
which are amortized using the straight-line method over 1~5 years.
(11) Impairment of non-financial assets
A. The Group assesses all applicable assets subject to SFAS No. 35 for indication of impairment
at 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