The Company evaluated its cost method investees for impairment by using valuation models based on discounted future cash flows because there are no quoted fair value for such investments. Cost method investees held with a carrying amount of NT$44 million were written down to their fair value of NT$24 million, resulting in an impairment charge of NT$20 million, which was included in earnings for year ended December 31, 2009, and cost method investees held with a carrying amount of NT$99 million were written down to their fair value of NT$40 million, resulting in an impairment charge of NT$59 million, which was included in earnings for year ended December 31, 2010. 

Certain non-financial assets and non-financial liabilities measured at fair value on a recurring basis include reporting units measured at fair value in the first step of a goodwill impairment test, other non- financial long-lived assets and idle assets measured at fair value for impairment assessment. The Company calculates these fair values using the market approach which includes recent market condition and other economic factors as their fair value inputs. Other assets held with a carrying amount of NT$5 million were written down to their fair value of nil, resulting in an impairment charge of NT$5 million, which was included in earnings for year ended December 31, 2009, and other assets held with a carrying amount of NT$94 million were written down to their fair value of NT$28 million, resulting in an impairment charge of NT$66 million, which was included in earnings for year ended December 31, 2010. 

## e. Advertising and promotion expenses 

Advertising and promotional expenses are charged to income as incurred. These expenses were NT$3,689 million, NT$3,413 million and NT$3,227 million for the years ended December 31, 2008, 2009 and 2010, respectively. 

## f. Income tax 

Effective from January 1, 2007, the Company adopted the guidance of income taxes uncertainties. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also provides guidance on derecognition, classification, interest and penalties, disclosure and transition. The evaluation of a tax position in accordance with the guidance is a two step process. The first step is recognition, where we evaluate whether an individual tax position has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, zero tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, we perform the second step of measuring the benefit to be recorded. The actual benefits ultimately realized may differ from the Company’s estimates. The adoption of the guidance did not have a material impact on the Company. 

The Company did not identify significant unrecognized tax benefits for the year ended December 31, 2008, 2009 and 2010. The Company did not incur any interest or penalties related to potential underpaid income tax expenses. 

