HTC 2007 Annual Report Download - page 89

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AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
173172
4. ACCOUNTING CHANGES
a. SFAS Nos. 37 and 38
Effective January 1, 2007, the Company
adopted the newly released Statements of
Financial Accounting Standards ("Statements"
or SFAS) No. 37 - "Intangible Assets" and No.
38 -"Noncurrent Assets Held for Sale and
Discontinued Operations." These accounting
changes had no material effect on the
Company's financial statements as of and for
the year ended December 31, 2007.
b. SFAS Nos. 34 and 36
On January 1, 2006, the Company adopted
the newly released SFAS No. 34 -
"Accounting for Financial Instruments" and
No. 36 - "Disclosure and Presentation of
Financial Instruments" and related revisions of
previously released Statements.
The Company recategorized its financial
assets and liabilities upon adopting SFAS
Nos. 34 and 36. As shown below, the
adjustments of the carrying amounts of the
financial instruments categorized as financial
assets or financial liabilities at fair value
through profit or loss were included in the
cumulative effect of changes in accounting
principles. On the other hand, the adjustments
made to the carrying amounts of financial
instruments categorized as available-for-sale
financial assets were recognized as
adjustments to stockholders' equity.
As Cumulative Effect ofChange As Adjustments of
in Accounting Principles Stockholders' Equity
(After Tax) (After Tax)
Available-for-sale financial assets $ - $ 48
The accounting changes had no material
effect on the Company's financial statements
as of and for the year ended December 31,
2006.
c. SFAS Nos. 1, 5 and 25
Effective January 1, 2006, the Company
adopted the newly revised SFAS No. 1 -
"Conceptual Framework for Financial
Accounting and Preparation of Financial
Statements," No. 5 - "Long Term Investments
in Equity Securities" and No. 25 - "Business
Combinations - Accounting Treatment under
the Purchase Method," which prescribe that
investment premiums, representing goodwill,
be assessed for impairment at least annually
instead of being amortized. This accounting
change had no material effect on the
Company's financial statements as of and for
the year ended December 31, 2006.
VI
a. Under stockholders' equity if the changes in
fair value are recognized in stockholders'
equity;
b. As gain or loss if the change in fair value is
recognized as gain or loss.
Foreign-currency nonmonetary assets and
liabilities that are carried at cost continue to be
stated at exchange rates at the trade dates.
If the functional currency of an equity-method
investee is a foreign currency, translation
adjustments will result from the translation of the
investee's financial statements into the reporting
currency of the Company. These adjustments
are accumulated and reported as a separate
component of stockholders' equity.
> M
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The Company's acquisition of IA Style, Inc. was
accounted for using the Statement of Financial
Accounting Standards No. 25 - "Business
Combinations - Accounting Treatment under the
Purchase Method," and measured at the fair
value of the business acquired. The net assets
and net liabilities of the acquired entity were
accounted for in the balance sheet as an
increase in additional paid-in capital from
merger (credit) and as a decrease in retained
earnings (debit), respectively.
> R
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ons
Certain 2005 and 2006 accounts have been
reclassified to be consistent with the
presentation of the consolidated financial
statements as of and for the year ended
December 31, 2007.
3. TRANSLATION INTO U.S. DOLLARS
The financial statements are stated in New Taiwan
dollars. The translation of the 2007 New Taiwan
dollar amounts into U.S. dollar amounts are included
solely for the convenience of readers, using the
noon buying rate of NT$32.43 to US$1.00 quoted by
the Bank of Taiwan on December 31, 2007. The
convenience translation should not be construed as
representations that the New Taiwan dollar amounts
have been, could have been, or could in the future
be, converted into U.S. dollars at this or any other
exchange rate.
FINANCEI CONSOLIDATED REPORT
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