Asus 2014 Annual Report Download - page 240

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(22) Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to
settle on a net basis or realize the asset and settle the liability simultaneously.
(23) Derivative financial instruments
Derivatives are initially recognized at fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value. Any changes in the fair value are recognized
in profit or loss.
(24) Provisions for liabilities
Provisions are recognized when the Company has a present legal or constructive obligation as a
result of past events, and it is probable that an outflow of economic resources will be required to
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.
(25) 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 rate used to
discount is determined by using interest rates of government bonds (at the end of the
financial reporting period).
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.