HTC 2008 Annual Report Download - page 121

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Financial Information
| 107
106 |
2008 Annual Report
31.OTHER EVENTS
In December 2008, the Company’s board of
directors resolved to buy a land near the Company
in Taoyuan for NT$791,910 thousand (US$24,144
thousand) from a related party, Syuda
Construction Company, to have more office space,
parking lots, dormitory, etc. Both parties agreed to
pay and transfer the ownership of the land at the
same time before January 31, 2009.
32.SEGMENT INFORMATION
Industry Type
The Company mainly manufactures and sells
smart handheld devices.
Foreign Operations
Because sales to unaffiliated customers and
identifiable assets of foreign segments were less
than 10 percent of that of the Company, the
Company was exempt from disclosing information
on foreign operations.
Export Revenues
Export revenues in 2006, 2007 and 2008 were as
follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Asia
$
7,683,450
$
11,697,068
$
22,772,833
$
694,294
America
48,865,122
49,395,639
53,916,578
1,643,798
Europe
38,873,000
47,018,610
60,176,261
1,834,642
Others
6,771,781
7,770,119
11,532,155
351,590
$
102,193,353
$
115,881,436
$
148,397,827
$
4,524,324
Major Customers
Sales to major customers were as follows:
2006
2007
2008
Customer
NT$
NT$
NT$
US$
(Note 3)
A
$
13,372,184
$
19,710,823
$
26,859,037
$
818,873
B
12,326,693
15,942,551
21,639,592
659,744
C
10,335,852
12,592,997
21,375,563
651,694
D
17,839,399
16,931,462
4,414,395
134,585
$
53,874,128
$
65,177,833
$
74,288,587
$
2,264,896
6. The Company should disclose the financial
impact to the Company if the Company and its
affiliated companies have incurred any financial
or cash flow difficulties in 2008 and as of the
Date of This Annual Report
None.
7. Other matters requiring supplementary
explanation
Explanation of significant accounting policies:
1.Financial assets/liabilities at fair value through profit
or loss
The financial products whose change in fair value is
recognized in earnings are forward foreign exchange
contracts. Because of the small differences in buying
prices, selling prices, and mid-market prices, estimated
fair value for outstanding contracts at period end is
generally based on the public market quotes of
financial institutions (usually the mid-market price).
2.Available-for-sale financial assets
The available-for-sale financial assets are listed stocks.
Estimates of fair value are based on the closing price
for exchange- or OTC-listed securities on the balance
sheet date.
3.Revenue recognition and allowance for doubtful
accounts
Revenue is measured at fair value as the transaction
price agreed between HTC and buyers (considering
trade discounts and volume discounts). As HTC
operations have shifted toward primarily non-ODM
work, added trade discounts have included price
protection, marketing development fund, and mail-in
rebate.
Allowances for doubtful accounts are
estimated using aging analysis, which is
reviewed and updated regularly by
assessing the probability of recovering
outstanding receivables, credit ratings and
general economic factors. HTC assigns a
rating to each customer based on their
financial health. The allowance accounts
of customers with good credit ratings are
accrued by 1% ~ 5% when such are 31~90
days overdue and by 5% ~ 100% when such
exceed 91 days overdue. Individual
determinations are made for customers with
poor credit, as well as reasonable estimates
of allowances for receivables not yet due.
4.Inventory write-downs
Assessments of allowances for loss on
decline in inventory value or loss on items
retired are based on analysis of inventory
age and of slow moving or obsolete
inventory items. HTC began on 1 January
2008 to adopt newly released Statement of
Financial Accounting Standards No. 10 to
assess inventory value on a category by
category basis and allows companies to
write off as losses currently-held inventory
with no practical market value. Also, HTC
applies inventory aging analysis to products
stored in HTC’s main warehouse facility,
with items stored from 60~180 days
depreciated by 25~75% and those stored
more than 180 days depreciated by 100%.
Items stored in other warehouse facilities
are held to depreciation ratios appropriate to
their situations. Changes in the business