Asus 2015 Annual Report Download - page 187

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at the date of dividends declared.
(D) For restricted stocks where employees have to pay to acquire those stocks, if employees
resign during the vesting period, they must return the stocks to the issued subsidiaries and
the issued subsidiaries must refund their payments on the stocks, the issued subsidiary
recognizes the payments from the employees who are expected to resign during the vesting
period as liabilities at the grant date, and recognizes the payments from the employees who
are expected to be eventually vested with the stocks in ‘‘capital surplus – others’’.
(29) 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 sheets liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, the deferred income tax is not accounted for if
it arises from initial recognition of goodwill or of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred income tax is determined using
tax rates (and laws) that have been enacted or substantially enacted by the end of the financial
reporting period and are expected to apply when the related deferred income tax asset is
realized or the deferred income tax liability is settled.
D. Deferred income tax assets are recognized only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilized. At the
end of the financial reporting period, unrecognized and recognized deferred income tax assets
are reassessed.