Asus 2011 Annual Report Download - page 163

159
~31~
C. The cost of treasury stock is accounted for on a weighted-average basis.
(17) 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 of the Company and domestic subsidiaries 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 Group adopts SFAS No. 39 to account for the transfer of equity
instruments from shareholders to the Group’s employees.
(18) 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 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.
(19) Revenues, costs and expenses
The Group 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.
(20) Use of estimates
The preparation of consolidated 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 consolidated financial statements and the amounts of revenues and expenses during the
reporting period. Actual results could differ from those assumptions and estimates.