Crucial 2011 Annual Report Download - page 201

50
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
Under U.S. GAAP, a valuation allowance is not provided on tax assets to the extent that it is not “more likely than not”
that
such deferred tax assets will be realized. Also, if a company has experienced cumulative losses in recent years, it is not
generally able to consider projections of future operating profits for the purpose of determining the valuation allowance for
deferred income tax assets. A change in tax rate or law requires an adjustment to such deferred tax assets and liabilities in
the period of enactment and is reported as part of the results of operations.
Under U.S. GAAP, income tax expense related to the 10% retained profit tax is recorded in the statement of operations in
the year that the profits were earned based on management’
s estimate of the amount of profits to be retained. The income
tax expense, including the tax effects of temporary differences, is measured by using the rate that includes the estimated tax
on undistributed earnings.
Under ROC GAAP, transaction costs are deducted from the initial measurement of financial instruments that are not
measured at fair value through profit or loss. Transaction costs are those incremental costs directly attributable to acquiring
or issuing a financial instrument, and exclude internal administrative or holding costs.
Under U.S. GAAP, directly related transaction costs for financial instruments not measured at fair value upon initial
recognition are included in the determination of cost. Unlike ROC GAAP, certain internal costs of originating loans that are
related directly to specified activities performed by the lender are included in capitalized initial direct costs. However, for
financial liabilities, the transaction costs are deferred as an asset, unlike ROC.
Under ROC GAAP, capital increase in cash for which government approval is obtained specifically for the construction or
expansion of plant facilities and for purposes of availing an investment tax credit thereof is deducted from the total capital
expenditures relating to such construction or expansion for purposes of capitalizing the interest expense incurred from
existing borrowings.
Under U.S. GAAP, capital increase in cash for which government approval is obtained specifically for the construction or
expansion of plant facilities and for purposes of availing an investment tax credit thereof is not deducted from the total
capital expenditures relating to such construction or expansion for purposes of capitalizing the interest expense incurred
from existing borrowings.
(Continued)
(o)
Deferred charge
(p)
Capitalization of interest expense