D-Link 2014 Annual Report Download - page 36

13
D-LINK CORPORATION AND SUBSIDIARIES
Notes to the consolidated financial statements
(Continued)
(j) Investment in associates
Associates are those entities in which the Consolidated Company has significant influence, but not
control, over the financial and operating policies. Significant influence is presumed to exist when the
Consolidated Company holds between 20% and 50% of the voting power of another entity.
Investments in associates are accounted for using the equity method and are recognized initially at cost.
The cost of the investment includes transaction costs. The carrying amount of the investment in
associates includes goodwill arising from the acquisition less any accumulated impairment losses.
The consolidated financial statements include the Consolidated Company’s share of the profit or loss
and other comprehensive income of equity-accounted investees, after adjustments to align the
accounting policies with those of the Consolidated Company from the date that significant influence
commences until the date that significant influence ceases.
Unrealized profits resulting from the transactions between the Consolidated Company and an associate
are eliminated to the extent of the Consolidated Company’s interest in the associate.
If an associate issues new shares and the Consolidated Company does not acquire new shares in
proportion to its original ownership percentage but still have significant effect, the change in the equity
shall be used to adjust the capital surplus or retained earnings, and investments are accounted for using
equity method. If it resulted in a decrease in the ownership interest, except for the adjustments
mentioned above, the related amount previously recognized in other comprehensive income in reation
to the assocate will be reclassified proportionately on the same basis as if the Consolidated Company
had directly disposed of the related assets or liabilities.
(k) Investment property
Investment property is the property held either to earn rental income or for capital appreciation or for
both, but not for sale in the ordinary course of business, for use in the production or supply of goods or
services, or for administrative purposes. Investment property is measured at cost on initial
recognition and subsequently the depreciation expense of investment property is determined based on
the depreciable amount, where the depreciation methods useful lives and its residual value are in
consistent with the standards in property, plant and equipments.
(l) Property, plant and equipment
!
(1) Recognition and measurement
Items of property, plant and equipment are measured at cost, less, accumulated depreciation and
accumulated impairment losses. Cost includes expenditure that is directly attributed to the
acquisition of the asset.
Properties in the course of construction are carried at cost, less, any recognized impairment loss.
Such properties are depreciated and classified to the appropriate categories of property, plant and
equipment by the method used by the accounts of the same category when completed and ready
for intended use.
Each part of an item of property, plant and equipment with a cost that is significant in relation to
the total cost of the item shall be depreciated separately, unless, the useful life and the
depreciation method of a significant part of an item of property, plant and equipment are the
same as the useful life and depreciation method of another significant part of that same item.