Consolidated Financial Statements - Acer Group

9ACER INCORPORATED AND SUBSIDIARIESNotes to Consolidated Financial Statements (continued)(Note) On December 31, 2010, ALA was owned by Broadwalk. In 2011, the ownership of ALA wastransferred to GWI after the organization restructuring in the Pan America region.The Company established new subsidiaries namely AICQ, APL, LONG and SURE in 2011.In 2011, the subsidiaries namely PBSV, PBAN, PBFR, PBIT, PBES, GAI, GEBV, GCA, GSMX,ACI and NIC were liquidated, and were excluded from consolidation since the Company ceasedcontrol thereof.(2) Use of estimatesThe preparation of the accompanying consolidated financial statements requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosures ofcontingent assets and liabilities at the date of the consolidated financial statements and reportedamounts of revenues and expenses during the reporting periods. Economic conditions and eventscould cause actual results to differ significantly from such estimates.(3) Foreign currency transactions and translationsThe Company‟s reporting currency is expressed in New Taiwan dollar. The ConsolidatedCompanies record transactions in their respective local currencies of the primary economicenvironment in which these entities operate. Non-derivative foreign currency transactions arerecorded at the exchange rates prevailing at the transaction date. At the balance sheet date, monetaryassets and liabilities denominated in foreign currencies are translated into New Taiwan dollars usingthe exchange rates on that date. The resulting unrealized exchange gains or losses from suchtranslations are reflected in the accompanying statements of operations. Non-monetary assets andliabilities denominated in foreign currency that are measured in terms of historical cost are translatedusing the exchange rate at the date of the transaction. Non-monetary assets and liabilitiesdenominated in foreign currency that are measured at fair value are reported at the rate that was ineffect when the fair values were determined. Subsequent adjustments to carrying values of suchnon-monetary assets and liabilities, including the effects of changes in exchange rates, are reported inprofit or loss for the period, except that if movement in fair value of a non-monetary item isrecognized directly in equity, any foreign exchange component of that adjustment is also recognizeddirectly in equity.In preparing the consolidated financial statements, the foreign subsidiaries‟ financial statements areinitially remeasured into the functional currency and the remeasuring differences are accounted for asexchange gains or losses in the accompanying statements of operations. Translation adjustmentsresulting from the translation of foreign currency financial statements into the Company‟s reportingcurrency and a monetary item that forms part of the Company‟s net investment in a foreign operationare accounted for as cumulative translation adjustment, a separate component of stockholders‟ equity.(4) Classification of current and non-current assets and liabilitiesCash or cash equivalents, and assets that are held primarily for the purpose of being traded or areexpected to be realized within 12 months after the balance sheet date are classified as current assets;all other assets are classified as non-current.(Continued)