Property, Plant and Equipment Accounting Policy
Property, plant and equipment and assets leased to others are stated at cost less accumulated depreciation. Properties covered by agreements qualifying as capital leases are carried at the lower of the leased equipment's market value or the present value of the minimum lease payments at the inception date of the lease, with the corresponding amount recorded as obligations under capital leases. Borrowing costs directly attributable to the acquisition or construction of property, plant and equipment are capitalized as part of the cost of those assets. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the amount previously recognized as impairment would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of depreciation, as if no impairment loss had been recognized. Significant additions, renewals and betterments incurred during the construction period are capitalized. Maintenance and repairs are expensed as incurred.
Depreciation is computed using the straight-line method over the following estimated service lives: land improvements - 20 years; buildings - 10 to 20 years; machinery and equipment - 3 to 5 years; office equipment - 3 to 15 years; and leased assets - 20 years.
Upon sale or disposal of property, plant and equipment and assets leased to others, the related cost and accumulated depreciation are deducted from the corresponding accounts, with any gain or loss recorded as non-operating gains or losses in the year of sale or disposal.
When property, plant and equipment are determined to be idle or useless, they are transferred to idle assets at the lower of the net realizable value or carrying amount. Depreciation on the idle assets is provided continuously, and the idle assets are tested for impairment on a periodical basis.
Source: Taiwan Semiconductor Manufacturing Co., Annual Report
Property, Plant and Equipment Disclosure
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Taiwan Semiconductor Manufacturing Co., Statement of Financial Position, Property, Plant and Equipment
USD $ in thousands, translated from TWD NT$
Source: Based on data from Taiwan Semiconductor Manufacturing Co. Annual Reports
| Item |
Description |
The company |
| Land and land improvements |
Real estate assets held for productive use and depreciable assets that are an addition or improvement to real estate held for productive use. |
Taiwan Semiconductor Manufacturing Co.'s land and land improvements increased from 2009 to 2010 and from 2010 to 2011.
|
| Buildings |
Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing. |
Taiwan Semiconductor Manufacturing Co.'s buildings increased from 2009 to 2010 and from 2010 to 2011.
|
| Machinery and equipment |
Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. |
Taiwan Semiconductor Manufacturing Co.'s machinery and equipment increased from 2009 to 2010 and from 2010 to 2011.
|
| Office equipment |
Carrying amount at the balance sheet date for long-lived, depreciable asset commonly used in offices and stores. Examples include desks, chairs, and store fixtures. |
Taiwan Semiconductor Manufacturing Co.'s office equipment increased from 2009 to 2010 and from 2010 to 2011.
|
| Leased assets |
The total gross amount of assets subject to a lease meeting the criteria for capitalization. |
Taiwan Semiconductor Manufacturing Co.'s leased assets increased from 2009 to 2010 and from 2010 to 2011.
|
| Advance payments and construction in progress |
Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service. |
Taiwan Semiconductor Manufacturing Co.'s advance payments and construction in progress increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, cost |
Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation. |
Taiwan Semiconductor Manufacturing Co.'s property, plant and equipment, cost increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, net |
Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. |
Taiwan Semiconductor Manufacturing Co.'s property, plant and equipment, net increased from 2009 to 2010 and from 2010 to 2011.
|
Property, Plant and Equipment Ratios (Summary)
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Taiwan Semiconductor Manufacturing Co., Property, Plant and Equipment Ratios
| Ratio |
Description |
The company |
| Average age |
As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. |
Taiwan Semiconductor Manufacturing Co.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 and from 2010 to 2011.
|
| Estimated total useful life |
Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. |
Taiwan Semiconductor Manufacturing Co.'s estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
Taiwan Semiconductor Manufacturing Co.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level.
|
| Estimated remaining life |
|
Taiwan Semiconductor Manufacturing Co.'s estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 and from 2010 to 2011.
|
Average Age
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2011 Calculations
| Ratio |
Description |
The company |
| Average age |
As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. |
Taiwan Semiconductor Manufacturing Co.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 and from 2010 to 2011.
|
Estimated Total Useful Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated total useful life |
Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. |
Taiwan Semiconductor Manufacturing Co.'s estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
Estimated Age, Time Elapsed Since Purchase
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
Taiwan Semiconductor Manufacturing Co.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level.
|
Estimated Remaining Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
Taiwan Semiconductor Manufacturing Co.'s estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 and from 2010 to 2011.
|
