D-Link 2014 Annual Report Download - page 42

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D-LINK CORPORATION AND SUBSIDIARIES
Notes to the consolidated financial statements
(Continued)
(1) Assets and liabilities that are initially recognized but are not related to the business combination
and have no effect on net income or taxable gains (losses) during the transactions.
(2) Temporary differences arising from investments in subsidiaries and it’s probable that the
temporary differences will not reverse in the foreseeable future.
(3) Initial recognition goodwill.
Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled based on tax rates that have been enacted or
substantively enacted by the end of the reporting period.
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if:
(1) The entity has a legally enforceable right to set off current tax assets against current tax liabilities;
and
(2) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same
taxation authority on either:
(i) the same taxable entity; or
(ii) different taxable entities which intend either to settle current tax liabilities and assets on a
net basis, or to realize the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or assets are expected to be
settled or recovered.
A deferred tax asset should be recognized for the carryforward of unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that future taxable profit will be
available against which the unused tax losses, unused tax credits and deductible temporary differences
can be utilized. The carrying amount of a deferred tax asset shall be reviewed at the end of each
reporting period and shall reduce the carrying amount of a deferred tax asset to the extent that it is no
longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that
deferred tax asset to be utilized.
(v) Earnings per share
The Consolidated Company discloses the Company’s basic and diluted earnings per share attributable
to ordinary equity holders. The calculation of basic earnings per share is based on the profit attributable
to the ordinary shareholders of the Company divided by the weighted-average number of ordinary
shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to
ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares
outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible
notes, employee stock options, and employee bonus settled using shares that have yet to be approved
by the shareholders’ meeting . The effect on net income per common share from the increase in stock
from the transfer of unappropriated earnings, capital surplus, and employee profit sharing is computed
retroactively.