Page 61 - 2023 CPC Corporation,Taiwan

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the

use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a

sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.
(j) Investment property
Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties also include land held for a currently undetermined future use.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.
On derecognition of an investment property, the difference between the net disposal proceeds and the

(k) Intangible assets

subsequently measured at cost less accumulated amortization and accumulated impairment loss.
Amortization is recognized on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a zero unless the Company expects to dispose of the intangible asset before the end of its economic life.
(l) Oil and gas interests and exploration expenses
All geological and geophysical exploration costs are charged to current income.
The costs of drilling exploratory wells (“exploration well expenses”) in sites that have not yet proven to contain reserves of commercial quantities (“unproven sites”) are initially charged to current income. Exploration well expenses are subsequently capitalized as part of “oil and gas interests” accounts when (i) sites are proven to contain mineral reserves of commercial quantities and (ii) the construction of the to income in prior years are recognized as assets and as “non-operating income.”
The costs of drilling commercial wells, which are constructed after the sites are proven to contain mineral reserves of commercial quantities, are capitalized as assets. However, if the commercial wells turn out to be dry, such costs are charged to current income.
For oil site acquisitions, the Company’s payments for this purchase or investments in foreign joint ventures involving interest in oil sites-including the Company’s share in the costs of drilling commercial wells, production, transport and storage equipment but excluding the Company’s share in the costs of drilling exploratory wells and other exploration expenses-are capitalized as oil and gas interests. The Company’s share in joint ventures’ net earnings (or net losses) is recognized as other operating revenues (or other operating costs). The Company recognizes earnings remitted by joint ventures as a reduction of oil and gas interests. These costs are amortized at the ratio of the actual quantity of minerals extracted from the wells for the year to the estimated mineral reserve. The amortized costs and operating expenses paid to joint ventures are regarded as the cost of the Company’s share of the oil and gas extracted. The Company’s share of the oil and gas sold by the joint ventures.
For domestic sites and sites of product-sharing contracts, the Company amortizes the amount recognized in oil and gas interests by the ratio of actual quantity produced in the period over total estimated production quantity of the site. The Company accounts for minerals produced at amortized cost plus the site operation expenses paid, and recognizes crude oil inventory and natural gas inventory by the output value method. The Company recognizes sales and cost of goods sold on the sale of inventory.
For sites of Provision of Services Contract, the Company amortized the amount recognized in oil and gas interests in the same method of that of domestic sites and sites of product-sharing contract. The Company accounts for the amortized amount and the site operation expenses paid as other operating costs. On the other hand, the Company recognized other operating income by multiplying produced quantity to a revenue rate contracted with local oil site governments.
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