Diodes Incorporated and Subsidiaries notes to consolidated financial statements Note 1 – Summary of Operations and Significant  Accounting Policies (continued) 36 In December 2004, the FASB issued FASB Statement  No. 153,  Exchanges of Nonmonetary Assets – An Amend- ment of APB Opinion No. 29 . The amendments made  by Statement No. 153 are based on the principle that  exchanges of nonmonetary assets should be measured  based on the fair value of the assets exchanged. Further,  the amendments eliminate the narrow exception for  nonmonetary exchanges of similar productive assets  and replace it with a broader exception for exchanges of  nonmonetary assets that do not have “commercial sub- stance.” The provisions in Statement No. 153 are effec- tive for nonmonetary asset exchanges occurring in fiscal  periods beginning after June 15, 2005. Adoption of this  standard is not expected have a material impact on the  consolidated financial statements. In September 2004, the EITF reached a consensus on  EITF Issue No. 04-10,  Applying Paragraph 19 of FAS 131  in Determining Whether to Aggregate Operating Segments  That Do Not Meet the Quantitative Thresholds.  The con- sensus states that operating segments that do not meet  the quantitative thresholds can be aggregated only if  aggregation is consistent with the objective and basic  principles of SFAS No. 131,  Disclosures about Segments  of an Enterprise and Related Information , the segments  have similar economic characteristics, and the segments  share a majority of the aggregation criteria (a)-(e) listed  in paragraph 17 of SFAS No. 131. The effective date  of the consensus in this Issue is for fiscal years ending  after October 13, 2004. If the Financial Accounting  Standards Board (FASB) ratifies EITF Issue No. 04-10,  the Company does not anticipate a material impact on the  financial statements. In March 2004, the EITF reached a consensus on  the remaining portions of EITF 03-01,  The Meaning of  Other-Than-Temporary Impairment and Its Application  to Certain Investments,  with an effective date of June 15,  2004. EITF 03-01 provides new disclosure requirements  In December 2004, the FASB also issued SFAS No.  151,  “Inventory Costs, an amendment of ARB No. 43,  Chapter 4,”  which will become effective for the Company  beginning January 1, 2006. This standard clarifies that  abnormal amounts of idle facility expense, freight, han- dling costs and wasted material should be expensed as  incurred and not included in overhead. In addition, this  standard requires that the allocation of fixed production  overhead costs to inventory be based on the normal  In January 2003, the FASB issued Interpretation No. 46,  Consolidation of Variable Interest Entities – an  Interpretation of ARB No. 51 , which provides guidance on the identification of and reporting for variable inter- est entities. Interpretation No. 46 expands the criteria for  consideration in determining whether a variable interest  Interpretation No. 46 is effective immediately for vari- able interest entities created after January 31, 2003, and  to variable interest entities in which an enterprise obtains  an interest after that date. Interpretation No. 46 was  effective for the Company in 2004 because the Company  entered into a joint venture for Diodes-Shanghai. The  Company has a 95% interest. The Interpretation requires  unconsolidated variable interest entities to be consoli- dated by their primary beneficiaries. The primary ben- eficiary is the party that assumes the majority of the risk,  which includes, but is not limited to, the entity’s expected  losses. Management concluded that its investment in  Diodes-Shanghai did not meet the criteria for consolida- tion under the standard. Based upon our review, we con- cluded that management’s analysis and the conclusions  contained therein appeared reasonable. for other-than-temporary impairments on debt and  equity investments. Investors are required to disclose  quantitative information about: (i) the aggregate amount  of unrealized losses, and (ii) the aggregate related fair  values of investments with unrealized losses, segregated  into time periods during which the investment has been  in an unrealized loss position of less than 12 months  and greater than 12 months. In addition, investors are  required to disclose the qualitative information that sup- ports their conclusion that the impairments noted in the  qualitative disclosure are not other-than temporary. The  Company determined that EITF 03-01 would not have a  material impact on the financial statements.