PART I 86 U.S. GAAP Reconciliation  In January 2010, the FASB issued an accounting update that amended guidance and clarified the disclosure  requirements about fair market value measurement. These amended standards require new disclosures for  significant transfers of assets or liabilities between Level 1 and Level 2 in the fair value hierarchy; separate  disclosures for purchases, sales, issuance and settlements of Level 3 fair value items on a gross, rather than net  basis; and more robust disclosure of the valuation techniques and inputs used to measure Level 2 and Level 3  assets and liabilities. Except for the detailed disclosures of changes in Level 3 items, which will be effective for  us as of January 1, 2011, the remaining new disclosure requirements were effective for us as of January 1, 2010.  In April 2010, the FASB issued an accounting update that provides guidance on defining a milestone  and determining when it may be appropriate to apply the milestone method of revenue recognition for certain  research and development transactions. Under this new standard, a company can recognize as revenue  consideration that is contingent upon achievement of a milestone in the period in which it is achieved, only if the  milestone meets all criteria to be considered substantive. This standard will be effective for us on a prospective  basis as of January 1, 2011. We are currently evaluating the impact of the adoption of the update.  In April 2010, the FASB issued an accounting update to clarify that a share-based payment award with  an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity  securities trades must not be considered to contain a market, performance, or service condition. Therefore,  an entity should not classify such an award as a liability if it otherwise qualifies for classification in equity.  This guidance is effective for annual periods beginning on or after December 15, 2010, and will be applied  prospectively. Affected entities will be required to record a cumulative catch-up adjustment to the opening  balance of retained earnings for all awards outstanding as of the beginning of the annual period in which the  guidance is adopted. Earlier application is permitted. We are currently evaluating the impact of the adoption of  the update.  In December 2010, the FASB issued an accounting update to require that supplemental pro forma  information disclosures pertaining to acquisitions should be presented as if the business combination(s) occurred  as of the beginning of the prior annual period when comparative financial statements are presented. This  guidance also expands the supplemental pro forma disclosures to include a description of the nature and amount  of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the  reported pro forma revenue and earnings. This guidance is effective for business combinations consummated in  periods beginning after December 15, 2010. Early adoption is permitted. We will make the required disclosures  prospectively as of the date of the adoption for any material business combinations or series of immaterial  business combinations that are material in the aggregate. We do not expect the new accounting standard will have  a material impact on our financial statements.  In December 2010, the FASB issued an accounting update to modify Step 1 of the goodwill impairment  test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required  to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists.  In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider  whether there are any adverse qualitative factors indicating that an impairment may exist. For public entities, this  guidance is effective for impairment tests performed during entities’ fiscal years that begin after December 15,  2010. Early application will not be permitted. Based on our analysis, we currently do not anticipate that the new  guidance will have a material effect on our financial statements  Our consolidated financial statements are prepared in accordance with R.O.C. GAAP, which differ in  certain material respects from U.S. GAAP. The following table sets forth a comparison of our net income and  stockholders’ equity in accordance with R.O.C. GAAP and U.S. GAAP as of and for the periods indicated. 