Samsung 1999 Annual Report Download - page 52

Income Tax Expense -
In accordance with the revised generally accepted accounting
principles in Korea, during the current fiscal year the
Company has adopted the deferred method of accounting for
income taxes. Under this method, the future tax effects of
temporary differences between the financial and tax bases of
assets and liabilities are reflected in the balance sheet as of
December 31, 1999. As a result of this change, shareholders’
equity as of December 31, 1999 is approximately 1,080,527
million greater and net income for the year ended December
31, 1999 is approximately 199,039 million less than that
which would have been reported under the previous
accounting method.
Valuation of Assets and Liabilities at Present Value -
Pursuant to the revised generally accepted financial accounting
standards effective January 1, 1999, assets acquired and
liabilities incurred through long-term installment transactions
and accounts and notes receivables under rescheduled debt
payments approved by the court are stated at present value.
As a result of this change, shareholder’s equity as of
December 31, 1999 and net income for the year ended
December 31, 1999 are approximately 2,452 million and
8,729 million, respectively, less than that which would have
been reported under the previous method.
Earnings Per Share -
Earnings per share is computed based on earnings available to
common shareholders, using the weighted average number of
common shares outstanding during the period.
Product Warranties and Performance Guarantees -
In conformity with accounting practices prevailing in the
Republic of Korea, costs related to repairs, service and other
work required in accordance with product warranties and
performance guarantees are charged to expense when
incurred.
Derivative Instruments -
The Company utilized derivative instruments to reduce its
exposure to fluctuations in interest and foreign currency
exchange rates. Pursuant to the revised generally accepted
accounting standards effective January 1, 1999, rights or
obligations derived from derivative instruments are recorded
as assets or liabilities at fair value on an accrual basis. Gain or
loss on valuation of derivative instruments is recognized as a
component of current operations, except for gains or losses
on valuation of derivative instruments used to hedge cash
flows, which are recorded as a capital adjustment. As a result
of this change, shareholders' equity as of December 31, 1999
is approximately 13,101 million less and net income for the
year ended December 31, 1999 is approximately 12,876
million greater than that which would have been reported
under the previous accounting method.
3. Amounts Stated in U.S. Dollars:
The Company operates primarily in Korean Won and its
official accounting records are maintained in Korean Won.
The U.S. Dollar amounts are provided herein as
supplementary information solely for the convenience of the
reader. Won amounts are expressed in U.S. Dollars at the
rate of 1,145: US$1, the rate in effect on December 31,
1999. This presentation is not in accordance with accounting
principles generally accepted in either the Republic of Korea
or the United States, and should not be construed as a
representation that the Won amounts shown could be
converted, realized or settled in U.S. Dollars at this rate.
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