47
2013
CPC
the investee, all the profits are eliminated. Profits from upstream transactions with an equity-method
investee, whether or not the Corporation has control over the investee, are eliminated in proportion to
the Corporation’s percentage of ownership in the investee.
When the Corporation subscribes for its investee’s newly issued shares at a percentage different
from its percentage of ownership in the investee, the Corporation records the change in its equity in
the investee’s net assets as an adjustment to investments, with a corresponding amount credited or
charged to capital surplus. When the adjustment should be debited to capital surplus, but the capital
surplus arising from long-term investments is insufficient, the shortage is debited to retained earnings.
When the Corporation’s share in losses of an investee over which it has significant influence equals
its investment in that investee plus any advances made to the investee, the Corporation discontinues
applying the equity method. The Corporation continues to recognize its share in losses of the investee
if (a) the Corporation commits to provide further financial support to the investee or (b) the losses of the
investee are considered to be temporary and sufficient evidence shows imminent return to profitability.
■
Properties
Properties are stated at cost plus revaluation increment less accumulated depreciation and accumulated
impairment losses. Major additions and improvements to properties are capitalized, while costs of
repairs and maintenance are expensed currently.
Interest expenses for construction in progress are capitalized. Interest capitalized each month is
calculated using the following formula:
Interest capitalized = Accumulated payments × Budgeted financing ratio of individual capital expenditure
plans × Actual interest rate of loans
The total interest capitalized each month may not exceed the interest expense recognized in that month.
Depreciation is computed using the fixed-percentage-on-declining-balance method over the following
estimated service lives prescribed by the Executive Yuan:
Machinery and equipment
Main part of the distillation equipment
Main part of the reforming feedstock prefraction equipment
Main part of the reforming equipment
Main part of the fluidized catalytic cracking equipment
Main part of the alkylation equipment
Main part of the visbreaking equipment
Main part of the vacuum distillation and bitumen equipment
Main part of the defat equipment
Main part of the chemical refining equipment
Main part of the hydro desulfurization equipment
Main part of the lube oil blending equipment
Main part of the light oil rectifying equipment
Main part of the cracking equipment
Main part of the boiler type heater and other heating equipment
Main part of the machine and equipment for oil transportation and storage
Main part of the oil storage tank
Main part of the submarine pipeline for natural gas
Main part of the main land-pipeline for natural gas
Main part of the LNG storage tank
Transportation equipment
Motor vehicles
Oil tankers
Buildings
Factory building
Office building
15 years
15 years
15 years
10-15 years
8-25 years
15 years
7-15 years
3-15 years
4-10 years
5-15 years
8-20 years
12 years
7-10 years
10-25 years
15-20 years
8-15 years
15 years
15 years
20 years
5-15 years
14 years
30-45 years
35-60 years
