Income Tax Share-based Compensation Revenue Recognition PART III F-21 The measurement of benefit obligations and net periodic cost (income) is based on estimates and assumptions approved by  the Company’s management such as compensation, age and seniority, as well as certain assumptions, including estimates of  discount rates, expected return on plan assets and rate of compensation increases. For employees under defined contribution pension plans, pension costs are recorded based on the actual contributions made to  employees’ individual pension accounts during their service periods. The Company applies inter-period allocations for its income tax, whereby deferred income tax assets and liabilities are  recognized for the tax effects of temporary differences and unused tax credits. Valuation allowances are provided to the extent,  if any, that it is more likely than not that deferred income tax assets will not be realized. A deferred tax asset or liability is  classified as current or noncurrent in accordance with the classification of its related asset or liability. However, if a deferred  tax asset or liability does not relate to an asset or liability in the financial statements, then it is classified as either current or  noncurrent based on the expected length of time before it is realized or settled.  Any tax credits arising from purchases of machinery, equipment and technology, research and development expenditures,  personnel training, and investments in important technology based enterprises are recognized using the flow-through method.  Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision. Income taxes (10%) on undistributed earnings is recorded in the year of stockholders approval which is the year subsequent to  the year the earnings are generated. Employee stock options granted on or after January 1, 2008 are accounted for using fair value method in accordance with SFAS  No. 39, “Accounting for Share-based Payment.” The adoption of SFAS No. 39 did not have any impact on the Company. Employee stock options granted between January 1, 2004 and December 31, 2007 were accounted for under the interpretations  issued by the Accounting Research and Development Foundation (the “ARDF”). The Company adopted the intrinsic value  method, under which compensation cost was amortized over the vesting period.  Revenues are recognized when they are realized or realizable and earned. Revenues are realized or realizable and earned when  the Company has persuasive evidence of an arrangement, the goods have been delivered or the services have been rendered to  the customer, the sales price is fixed or determinable and collectibility is reasonably assured. Revenue is measured at the fair value of the consideration received or receivable and represents amounts agreed between the  Company and the customers for goods sold in the normal course of business, net of sales discounts and volume rebates. For  trade receivables due within one year from the balance sheet date, as the nominal value of the consideration to be received  approximates its fair value and transactions are frequent, fair value of the consideration is not determined by discounting all  future receipts using an imputed rate of interest. Usage revenues from fixed-line services (including local, domestic long distance and international long distance), cellular  services, Internet and data services, and interconnection and call transfer fees from other telecommunications companies and  carriers are billed in arrears and are recognized based upon minutes of traffic processed when the services are provided in  accordance with contract terms.