Asus 2014 Annual Report Download - page 241

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(C) Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of
employment as a result from either the Company’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
Company recognizes termination benefits when it is demonstrably committed to a
termination, when it has a detailed formal plan to terminate the employment of current
employees and when it can no longer withdraw the plan. In the case of an offer made by
the Company to encourage voluntary termination of employment, the termination
benefits are recognized as expenses only when it is probable that the employees are
expected to accept the offer and the number of the employees taking the offer can be
reliably estimated. Benefits falling due more than 12 months after end of the financial
reporting period are discounted to their present value.
(D) Employees’ bonus and directors’ and superviso rs’ remuneration
Employees’ bonus and directors’ and supervisors’ remuneration are recognized as
expenses and liabilities, provided that such recognition is required under legal or
constructive obligation and those amounts can be reliably estimated. However, if the
accrued amounts for employees’ bonus and directors’ and supervisors’ remuneration are
different from the actual distributed amounts as resolved by the shareholders at their
shareholders’ meeting subsequently, the differences should be recognized based on the
accounting for changes in estimates. The Company calculates the number of shares of
employees’ stock bonus based on the fair value per share at the previous day of the
shareholders’ meeting held in the year following the financial reporting year, and after
taking into account the effects of ex-rights and ex-dividends.
(26) Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit
or loss, except to the extent that it relates to items recognized in other comprehensive income
or items recognized directly in equity, in which cases the tax is recognized in other
comprehensive income or equity.
B. The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the end of the financial reporting period in the countries where the
Company and its subsidiaries operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in accordance with
applicable tax regulations. It establishes provisions where appropriate based on the amounts
expected to be paid to the tax authorities. An additional 10% tax is levied on the
unappropriated retained earnings and is recorded as income tax expense in the year the
shareholders resolve to retain the earnings.
C. Deferred income tax is recognized, using the balance sheet liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts
in the separate financial statements. However, the deferred income tax is not accounted for if