Asus 2015 Annual Report Download - page 252

248
(27) Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are
approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock
dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares
on the effective date of new shares issuance.
(28) Revenue recognition
Sales of goods
The Company is primarily engaged in the selling of 3C products. Revenue is measured at the fair
value of the consideration received or receivable taking into account value-added tax, returns,
rebates and discounts for the sale of goods to customers in the ordinary course of the Company’s
activities. Revenue arising from the sales of goods is recognized when the Company has delivered
the goods to the customer, the amount of sales revenue can be measured reliably and it is probable
that the future economic benefits associated with the transaction will flow to the entity. The
delivery of goods is completed when the significant risks and rewards of ownership have been
transferred to the customer, the Company retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods sold, and the
customer has accepted the goods based on the sales contract or there is objective evidence
showing that all acceptance provisions have been satisfied.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF
ASSUMPTION UNCERTAINTY
The preparation of these separate financial statements requires management to make critical
judgements in applying the Company’s accounting policies and make critical assumptions at the end of
the financial reporting period and estimates concerning future events. The resulting accounting
estimates and assumptions might be different from the actual results, and will be continually evaluated
and adjusted based on historical experience and other factors; and the related information is addressed
below:
Critical accounting estimates and assumptions – Evaluation of inventories
Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory
consumption, obsolete inventories or inventories without market selling value at the end of the
financial reporting period, and writes down the cost of inventories to the net realizable value. Such an
evaluation of inventories is principally based on the demand for the products within the specified
period in the future. Therefore, there might be material changes to the evaluation.
As of December 31, 2015, the carrying amount of inventories was $41,442,033.