HTC 2007 Annual Report Download - page 85

AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
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asset or a financial liability held for trading. If the
fair value of the derivative is positive, the
derivative is recognized as a financial asset;
otherwise, the derivative is recognized as a
financial liability.
Fair values of financial assets and financial
liabilities at the balance sheet date are
determined as follows: publicly traded stocks - at
closing prices; open-end mutual funds - at net
asset values; bonds - at prices quoted by the
Taiwan GreTai Securities Market; and financial
assets and financial liabilities without quoted
prices in an active market - at values determined
using valuation techniques.
> Av a il a b l e - f or-S a l e F i n a n c i a l Ass e t s
Available-for-sale financial assets are initially
measured at fair value plus transaction costs that
are directly attributable to the acquisition. After
the initial recognition, available-for-sale financial
assets are remeasured at fair value at the
balance sheet date, with changes in fair value
recognized in equity until the financial assets are
disposed of. On asset disposal, the cumulative
gain or loss previously recognized under equity
is included in gain or loss for the year.
The recognition, derecognition and the fair value
bases of available-for-sale financial assets are
similar to those of financial assets at FVTPL.
Cash dividends are recognized on the
stockholders' declaration under resolutions,
except for dividends distributed from the pre-
acquisition earnings, which are treated as a
reduction of investment cost. Stock dividends are
not recognized as investment income but are
recorded as an increase in the number of shares.
The total number of shares held after this
increase is used to recalculate cost per share.
The difference between the initial cost of a debt
instrument and its maturity amount is amortized
using the effective interest method, with the
amortized interest recognized as gain or loss.
If there is objective evidence that a financial asset
is impaired, a loss is recognized. If the
impairment loss decreases, the previously
recognized impairment loss is reversed to the
extent of the decrease and recorded as an
adjustment to stockholders' equity.
> R e v e nu e R e c ogn i t i on, A cc oun t s R e c e i v a b l e a nd
A ll ow a n c e f or Doub tf u l A cc oun t s
Revenue from the sale of goods is recognized
when the Company has transferred to the buyer
the significant risks and rewards of ownership of
the goods, primarily upon shipment, because the
earnings process has been completed and the
economic benefits associated with the transaction
have been realized or are realizable.
VI
2007
NT$ US$(Note 3)
Cash on hand and in banks $ 39,961 $ 1,232
Other current assets 40,201 1,240
Property 175,940 5,425
Intangible assets 174,253 5,373
Other assets 3,913 121
Current liabilities ( 63,315) ( 1,952)
Long-term bank loans ( 90,050) ( 2,777)
Other liabilities ( 903) ( 28)
Total consideration $ 280,000 $ 8,634
Cash consideration $ 280,000 $ 8,634
Cash on hand and in banks ( 39,961) ( 1,232)
Net cash outflow on the acquisition of a subsidiary $ 240,039 $ 7,402
As m entioned in N ote 1, H TC and the foregoing subsidiaries are hereinafter referred to
collectively as the
" Co m pany. "
> Curr e n t /Non c urr e n t Ass e t s a nd L i a b ili t i e s
Current assets include cash, cash equivalents,
and those assets held primarily for trading
purposes or to be realized, sold or consumed
within one year from the balance sheet date. All
other assets such as property, plant and
equipment and intangible assets are classified
as noncurrent. Current liabilities are obligations
incurred for trading purposes or to be settled
within one year from the balance sheet date. All
other liabilities are classified as noncurrent.
> F i n a n c i a l Ass e t s/L i a b ili t i e s a t Fa i r V a l u e t hrough
Pro f i t or Loss
Financial instruments classified as financial
assets or financial liabilities at fair value through
profit or loss (FVTPL) include financial assets or
financial liabilities held for trading and those
designated as at FVTPL on initial recognition.
The Company recognizes a financial asset or a
financial liability in the balance sheet when the
Company becomes a party to a financial
instrument contract. A financial asset is
derecognized when the Company loses its
contractual rights to the financial asset. A
financial liability is derecognized when the
relevant contract ends or is discharged or
canceled.
Financial instruments at FVTPL are initially
measured at fair value. Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at FVTPL are
recognized immediately in profit or loss. After
the initial recognition, financial assets or
financial liabilities at FVTPL are remeasured at
fair value at the balance sheet date, with
changes in fair value recognized as current
gains or losses. Cash dividends received are
recognized as income for the year. On the
derecognition of a financial asset or a financial
liability, the difference between its carrying
amount and the sum of the consideration
received or receivable or consideration paid or
payable is recognized as gain or loss.
A derivative that does not meet the criteria for
hedge accounting is classified as a financial
FINANCEI CONSOLIDATED REPORT l