Asus 2012 Annual Report Download - page 137

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(13) Treasury stock
A. When the Company acquires its outstanding shares as treasury stock, the acquisition cost
should be debited to the treasury stock account (a contra account under stockholders’ equity).
B. When the Company’s treasury stock is retired, the treasury stock account should be credited,
and the capital surplus-premium on stock account and capital stock account should be debited
proportionately according to the share ratio. An excess of the carrying value of treasury stock
over the sum of its par value and premium on stock should first be offset against capital
surplus from the same class of treasury stock transactions, and the remainder, if any, debited to
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 (costs) 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.