This excerpt taken from the CHT 20-F filed Jun 23, 2005.
Research and development costs are charged to income as incurred.
Employee Stock Compensation
In connection with the privatization plan of the Company, employees may be offered to purchase shares of common stock of the Company at less than fair market value. The Company records the difference between the quoted market price of the stock on the date of purchase and the purchase price as compensation expense and charges to income in the period of the purchase.