Page 58 - 2024 CPC Corporation,Taiwan

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2) Derecognition of financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
(iii) Derivative financial instruments
The Company enters into a variety of derivative financial instruments to manage its exposure to price changes and foreign exchange rate risks, including foreign exchange forward contracts and petroleum swap contracts.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.
(f) Inventories
Inventories include raw materials, finished goods, work in process, semi-finished goods, merchandise, construction in progress, merchandise in transit - crude oil, and merchandise in transit - fuel oil. Inventories are stated at the lower of cost or net realizable value or replacement cost. Inventory write- downs are made by item, except where it may be appropriate to Company similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.
Inventories are recorded at weighted-average cost on the balance sheet date.
(g) Investment in associates
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture.
The Company uses the equity method to account for its investments in associates.
Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in the Company’s share of equity of associates.
If the cost of acquisition exceeds the Company’s share of the net fair value of the identifiable assets and liabilities of an associate recognized at the date of acquisition, this excess is recognized as goodwill, which is included in the carrying amount of the investment and is not amortized. If the Company’s share of the net fair value of the identifiable assets and liabilities exceeds the cost of acquisition, after reassessment, this excess is recognized immediately in profit or loss.
The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.
When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s financial statements only to the extent of interests in the associate that are not related to the Company.
(h) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes professional fees and borrowing costs eligible for capitalization.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately unless the useful life and depreciation method of that significant part are the same as those of another significant part of that same item.
The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized in profit or loss.
(ii) Subsequent cost
Subsequent expenditure is capitalized only when it is probable that future economic benefits