26 Diodes Incorporated and Subsidiaries management ’ s discussion and analysis of financial condition  and results of operations 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  substance.” The provisions in Statement No. 153 are  effective 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  consensus 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  for other-than-temporary impairments on debt and  equity investments. Investors are required to  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 Com- pany beginning January 1, 2006. This standard clarifies  that abnormal amounts of idle facility expense, freight,  handling costs and wasted material should be expensed  as incurred and not included in overhead. In addition,  this standard requires that the allocation of fixed pro- duction overhead costs to inventory be based on the  In January 2003, the FASB issued Interpretation No.  46,  Consolidation of Variable Interest Entities – an Inter- pretation of ARB No. 51 , which provides guidance on  the identification of and reporting for variable interest  entities. Interpretation No. 46 expands the criteria for  consideration in determining whether a variable inter- est Interpretation No. 46 is effective immediately for  variable 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 Com- pany entered into a joint venture for Diodes-Shanghai.  The Company has a 95% interest. The Interpretation  requires unconsolidated variable interest entities to be  consolidated by their primary beneficiaries. The primary  beneficiary is the party that assumes the majority of the  risk, which includes, but is not limited to, the entity’s ex- pected losses. Management concluded that its investment  in Diodes-Shanghai did not meet the criteria for consoli- dation under the standard. Based upon our review, we  concluded that management’s analysis and the conclu- sions contained therein appeared reasonable. disclose quantitative information about: (i) the aggre- gate amount of unrealized losses, and (ii) the aggregate  related fair values of investments with unrealized losses,  segregated into time periods during which the invest- ment has been in an unrealized loss position of less than  12 months and greater than 12 months. In addition, in- vestors are required to disclose the qualitative informa- tion that supports 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 state- ments.