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Pursuant to the related regulation, Chunghwa revalued its land owned as of April 30, 2000 based on the publicly announced value on July 1, 1999. These revaluations which were approved by the Ministry of Auditing resulted in increases in the carrying values of property, plant and equipment of NT$5,986 million, liabilities for land value incremental tax of NT$211 million, and stockholders’ equity - other adjustments of NT$5,775 million. 

The amendment to the Land Tax Act, relating to the article to permanently lower land value incremental tax, went effective from February 1, 2005. In accordance with the lowered tax rates, Chunghwa recomputed its land value incremental tax, and reclassified the reserve for land value incremental tax of NT$116 million to stockholders’ equity - other adjustments. As of December 31, 2011, the unrealized revaluation increment was decreased to NT$5,763 million by disposal of revaluation assets. 

Depreciation expense on property, plant and equipment was NT$35,114 million, NT$32,737 million and NT$30,889 million for the years ended December 31, 2009, 2010 and 2011, respectively. Interest expense capitalized for the years ended December 31, 2009, 2010 and 2011 were NT$1 million, NT$0.01 million, and NT$0.08 million, respectively. The capitalized interest rates were 1.165%-1.604%, 1.1% and 1.10%-1.25%, respectively, for the years ended December 31, 2009, 2010 and 2011. 

Chunghwa reclassified the unused property, plant and equipment amounting to NT$61 million to idle assets and recognized the impairment loss of NT$61 million on those assets for the year ended December 31, 2010. 

Losses on property, plant and equipment arising from natural calamities such as earthquakes and typhoons were recorded in non-operating expenses. 

