LG 2004 Annual Report Download - page 85

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LG Electronics Inc.
Notes to Non-Consolidated Financial Statements
December 31, 2004 and 2003
LG ELECTRONICS ANNUAL REPORT 2004
084
085
(in millions of Korean won)
42,906
3,910
-
2,649
5,621
5,411
4,096,263
2004
46,437
8,215
952
3,027
5,621
5,411
4,598,247
53,378
8,749
7,139
2,649
5,621
5,411
3,226,666
31.82
60.00
100.00
100.00
100.00
100.00
Percentage
of ownership (%)
at December
31, 2004
Net asset
value
Acquisition
cost
Carrying
value
44,496
2,973
-
-
-
-
2,621,879
2003
38,554
1,223
-
-
-
-
3,080,042
38,523
2,973
-
-
-
-
2,969,805
Net asset
value
Acquisition
cost
Carrying
value
LG Holdings (HK) Ltd. 4
Qingdao LG Langchao Digital
Communication Co., Ltd. 4
LG Goldstar France S.A.R.L.(LGEFS) 6
Kunshan LGMS Computer Co., Ltd.
(LGEKS) 6
Goldstar Mobilecomm
France SASU(LGEMF) 5
LG Electronics RUS, LLC(LGERA) 5
1. The equity method of accounting has been suspended due to the investee’s accumulated losses.
2. Investments in small-sized subsidiaries and affiliates whose total assets as of the previous year-end
amounted to less than 7,000 million, or which have just been established in the current period are stated at cost,
in accordance with accounting principles generally accepted in the Republic of Korea.
3. The operations of this subsidiary were suspended as of December 31, 2004.
4. During 2004, the Company purchased additional shares of these subsidiaries.
5. This subsidiary has just been established during 2004.
6. The Company newly purchased the shares of these subsidiaries during 2004.
7. The Company disposed of all the shares of LG Sports Ltd., resulting in a loss amounting to 598 million.
8. During 2004, the Company’s investments in LGEAI, LGICUS and Zenith were all contributed in kind to LGEUS,
making LGEUS the new parent company of the three investees and resulting in a gain of 38,336 million.
However, there was no effect on earnings because the amount was charged to valuation loss using equity method as intercompany transactions.
9. The Company’s percentage of ownership in LG.Philips LCD Co., Ltd. decreased from 50% to 44.57%
because the Company did not participate in issuance of stock for LG.Philips LCD Co., Ltd. A valuation gain of 300,891 million
for the year ended December 31, 2004 using equity method due to the change in percentage of ownership was recorded as capital adjustments.
10. The Company merged a part of PC Division of LG IBM PC Co., Ltd., a joint venture with IBM Korea Inc.
This merger is aimed to optimize business efficiency, align operational strategies, and maximize profitability.
The equity method of accounting is applied based on the affiliates’ most recent available financial statements which have been
audited or which have not been audited.