Asus 2012 Annual Report Download - page 136

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E. If the bondholder is eligible to exercise the put option within one year, the bonds payable are
reclassified as current liability. When the put option expires, those bonds payable are
reclassified as long-term liability if the liability meets the definition of long-term liability.
(11) Pension
A. Under the defined benefit pension plan, net periodic pension costs are recognized in
accordance with the actuarial calculations. Net periodic pension costs include service cost,
interest cost, expected return on plan assets, and amortization of unrecognized net transition
obligation and gain or loss on plan assets. Unrecognized net transition obligation is amortized
on a straight-line basis over the employees’ remaining service period.
B. Under the defined contribution pension plan, net periodic pension costs are recognized as
incurred.
(12) Income tax
A. Income tax is calculated on the basis of accounting income. The differences between the tax
bases and the book values of assets and liabilities are recorded as deferred tax using the
enacted tax rates for the periods in which the deferred tax is expected to be reversed. The tax
effects from taxable temporary differences are recognized as deferred tax liabilities, while the
deductible temporary differences and investment tax credits are accounted for as deferred tax
assets, which are assessed for an allowance for deferred tax assets based on future realization.
B. Deferred income tax assets or liabilities are classified as current or non-current based on the
classification of items that resulted in the deferred item or based on the timing of the expected
reversal, for certain transactions not directly related to an asset or liability. When a change in
the tax laws is enacted, the deferred tax liability or asset is recomputed accordingly in the
period of change. The difference between the new amount and the original amount, that is, the
effect of changes in the deferred tax liability or asset, is recognized as an adjustment to current
income tax expense (benefit).
C. Over or under provision of prior years’ income tax liabilities is included in current year’s
income tax.
D. The 10% additional income tax on unappropriated earnings is recorded as current income tax
expense in the year when the shareholders resolve not to distribute the earnings.
E. Current income tax is the higher of current income tax payable or the Alternative Minimum
Tax (“AMT”) calculated by applying the Income Basic Tax Act (IBTA). The Company has
taken into consideration the impact of the AMT in the determination of its current income tax
expense and its future impact when estimating the realizable value of the deferred tax assets.