Consolidated Financial Statements - Acer Group

43ACER INCORPORATED AND SUBSIDIARIESNotes to Consolidated Financial Statements (continued)(d) According to the Statue for Industrial Innovation, the domestic Consolidated Companies may applyfor investment tax credits from research and development expenditures, which are deductible fromincome tax payable only in the year when these expenditures are incurred. The amount of the taxcredit is limited to 30% of the income tax payable for that year. Additionally, according to theStatue for Upgrading Industries, which has been repealed on December 31, 2009, the domesticConsolidated Companies were granted investment tax credits for the purchase of automaticmachinery and equipment, for research and development expenditures, and for employee trainingexpenditures. These tax credits may be applied over a period of five years. The amount of thecredit that may be applied in any year is limited to 50% of the income tax payable for that year,except for the final year when such tax credit expires.As of December 31, 2011, investment tax credits available to the Consolidated Companies were asfollows:Expiration date NT$ US$December 31, 2012 34,367 1,135December 31, 2013 12,464 41146,831 1,546(e) The tax effects of net operating loss carryforwards available to the Consolidated Companies as ofDecember 31, 2011, were as follows:Expiration date NT$ US$December 31, 2012 4,877 161December 31, 2013 34,959 1,154December 31, 2014 182,653 6,030December 31, 2015 50,339 1,662Thereafter 7,320,602 241,6847,593,430 250,691(f) Information about the integrated income tax systemBeginning in 1998, an integrated income tax system was implemented in the Republic of China.Under the tax system, the income tax paid at the corporate level can be used to offset Republic ofChina resident stockholders‟ individual income tax. The Company is required to establish animputation credit account (ICA) so that a record shall be maintained for corporate income taxespaid and imputation credit that can be allocated to each stockholder. The credit available toRepublic of China resident stockholders is calculated by multiplying the dividend by the creditableratio. The creditable ratio is calculated based on the balance of the ICA divided by earningsretained by the Company since January 1, 1998.(Continued)