This excerpt taken from the AUO 6-K filed May 9, 2005.
(1) Basis of Presentation
AU Optronics Corp. (AUO, formerly known as Acer Display
Technology Inc.) was founded in the Hsinchu Science-based Industrial Park of the
Republic of China on August 12, 1996. AUOs main activities are the research,
development, production and sale of thin film transistor liquid crystal displays
(TFT-LCDs), and other flat panel displays used in a wide variety of applications,
including notebook personal computers, desktop monitors, televisions, personal digital
assistants, car televisions, digital cameras and camcorders, car navigation systems
and mobile phones. AUO sells its products primarily in Asia and to a lesser extent,
Europe and North America. On May 10, 2001, the Companys stockholders approved a proposal to merge with Unipac
Optoelectronics Corp. (Unipac) which was principally engaged in the research,
development, design, manufacture and sale of TFT-LCD and LCD modules used in wide variety
of applications. Unipac was subsequently dissolved.
AU Optronics (L) Corp. (AUL) is a wholly owned subsidiary of AUO
and was incorporated in September 2000. AUL is a holding company investing in the wholly owned foreign
subsidiaries i n cluding AU Optronics Corporation America (AUA), AU Optronics (Suzhou) Corp.
(AUS), AU Optronics Europe B.V. (AUE), AU Optronics Korea Ltd. (AUK) and AU Optronics Corporation Japan
(AUJ). AUS is engaged in the assembly of TFT-LCD module products in Mainland China.
AUA, AUJ, AUE and AUK are mainly engaged in the sale of TFT-LCDs.
Konly Venture Corp.
(Konly), a wholly owned subsidiary of AUO,
was incorporated in August 2002. Konly is an investment holding company for future investments
AUO plans to make in other similar technology companies.
The condensed consolidated financial statements include the accounts
of AUO and the aforementioned subsidiaries, hereinafter, referred to individually or collectively as the
This Summary Annual Report contains only the condensed consolidated
financial statements of the Company. These consolidated financial statements are considered condensed because certain i n formation and note disclosures
normally included in financial statements prepared in accordance with ROC GAAP, have been
condensed or omitted. For a more complete discussion of accounting policies and recurring balance and transactions, these condensed consolidated financial
statements should be read in conjunction with our December 31, 2004 audited consolidated financial statements and related notes included in our 2004 Annual Report.
The accompanying condensed consolidated financial statements
have been derived from the originally issued Chinese version consolidated financial
statements. In preparing the condensed consolidated financial statements, the
Company is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities for the condensed consolidated balance sheets
as of December 31, 2003 and 2004, and amounts of revenues and expenses in the
condensed consolidated statements of operations for each of the years in the
two year periods ended December 31, 2004.
The condensed consolidated financial statements are
prepared in accordance with accounting principles generally accepted in the Republic
of China (ROC GAAP).
These condensed consolidated financial statements are not intended to present
the financial position of the Company and the related results of operations
and cash flows based on accounting principles and practices generally accepted
in countries and jurisdictions other than the Republic of China. All significant
inter-company balances and transactions are eliminated in the condensed consolidated