Asus 2014 Annual Report Download - page 178

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settle the obligation and the amount of the obligation can be reliably estimated. Provisions are
measured at the present value of the expenditures expected to be required to settle the obligation
on the end of the financial reporting period, which is discounted using a pre-tax discount rate that
reflects the current market assessments of the time value of money and the risks specific to the
obligation. When discounting is used, the increase in the provision due to passage of time is
recognized as interest expense. Provisions are not recognized for future operating losses.
(27) Employee benefits
A. Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits
expected to be paid in respect of service rendered by employees in a period and should be
recognized as expenses in that period when the employees render service.
B. Pensions
(A) Defined contribution plans
For defined contribution plans, the contributions are recognized as pension expenses
when they are due on an accrual basis. Prepaid contributions are recognized as an asset to
the extent of a cash refund or a reduction in the future payments.
(B) Defined benefit plans
a. The liability recognized in the balance sheet in respect of defined benefit pension plans
is the present value of the defined benefit obligation at the end of the financial
reporting period less the fair value of plan assets, together with adjustments for
unrecognized past service costs. The defined benefit obligation is calculated annually
by independent actuaries using the projected unit credit method. The present value of
the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds that are denominated in
the currency in which the benefits will be paid, and that have terms to maturity
approximating to the terms of the related pension liability; when there is no deep
market in such corporate bonds, the Group uses interest rates of government bonds (at
the end of the financial reporting period) instead.
b. Actuarial gains and losses arising on defined benefit plans are recognized in other
comprehensive income in the period in which they arise.
c. Past service costs are recognized immediately in profit or loss if vested immediately; if
not, the past service costs are amortised on a straight-line basis over the vesting period.
(C) Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of
employment as a result from either the Group’s decision to terminate an employee’s
employment before the normal retirement date, or an employee’s decision to accept an
offer of redundancy benefits in exchange for the termination of employment. The Group
recognizes termination benefits when it is demonstrably committed to a termination,