Investment Properties

12 Months Ended

Dec. 31, 2020

17.	INVESTMENT PROPERTIES

For the year ended December 31, 2018

	Land		Buildings and Improvements			Total
	NT$		NT$			NT$

Cost

Balance at January 1, 2018	$	35,965	$	8,406,785		$	8,442,750
Additions		-		125,853			125,853
Reclassification		-		14,891			14,891
Effects of foreign currency exchange differences		-		(137,739	)		(137,739	)

Balance at December 31, 2018	$	35,965	$	8,409,790		$	8,445,755

Accumulated depreciation and impairment

Balance at January 1, 2018	$	-	$	323,314		$	323,314
Depreciation expenses		-		392,667			392,667
Reclassification		-		265			265
Effects of foreign currency exchange differences		-		(8,870	)		(8,870	)

Balance at December 31, 2018	$	-	$	707,376		$	707,376

Carrying amount at December 31, 2018	$	35,965	$	7,702,414		$	7,738,379

For the year ended December 31, 2019

	Land		Buildings and Improvements			Right-of-use Assets			Total
	NT$		NT$			NT$			NT$

Cost

Balance at January 1, 2019	$	35,965	$	8,409,790		$	6,891,947		$	15,337,702
Additions		-		2,532			-			2,532
Disposals		-		(1,843	)		-			(1,843	)
Reclassification		-		(490,130	)		(21,069	)		(511,199	)
Effects of foreign currency exchange differences		-		(209,980	)		(303,086	)		(513,066	)

Balance at December 31, 2019	$	35,965	$	7,710,369		$	6,567,792		$	14,314,126

Accumulated depreciation and impairment

Balance at January 1, 2019	$	-	$	707,376		$	292,722		$	1,000,098
Depreciation expenses		-		377,536			216,574			594,110
Disposals		-		(1,240	)		-			(1,240	)
Reclassification		-		(210,455	)		543			(209,912	)
Effects of foreign currency exchange differences		-		99,354			(22,355	)		76,999

Balance at December 31, 2019	$	-	$	972,571		$	487,484		$	1,460,055

Carrying amount at December 31, 2019	$	35,965	$	6,737,798		$	6,080,308		$	12,854,071

For the year ended December 31, 2020

	Land		Buildings and Improvements			Right-of-use Assets		Total
	NT$		NT$			NT$		NT$

Cost

Balance at January 1, 2020	$	35,965	$	7,710,369		$	6,567,792	$	14,314,126
Additions		-		6,352			-		6,352
Disposals		-		(1,902	)		-		(1,902	)
Reclassification		-		(3,884	)		46,201		42,317
Effects of foreign currency exchange differences		-		111,870			124,920		236,790

Balance at December 31, 2020	$	35,965	$	7,822,805		$	6,738,913	$	14,597,683

	Land		Buildings and Improvements			Right-of-use Assets		Total
	US$ (Note 4)		US$ (Note 4)			US$ (Note 4)		US$ (Note 4)

Cost

Balance at January 1, 2020	$	1,281	$	274,586		$	233,896	$	509,763
Additions		-		226			-		226
Disposals		-		(68	)		-		(68	)
Reclassification		-		(138	)		1,645		1,507
Effects of foreign currency exchange differences		-		3,984			4,449		8,433

Balance at December 31, 2020	$	1,281	$	278,590		$	239,990	$	519,861

Accumulated depreciation and impairment

Balance at January 1, 2020	$	-	$	34,636		$	17,360	$	51,996
Depreciation expenses		-		12,573			7,450		20,023
Disposals		-		(46	)		-		(46	)
Reclassification		-		(53	)		378		325
Effects of foreign currency exchange differences		-		699			351		1,050

Balance at December 31, 2020	$	-	$	47,809		$	25,539	$	73,348

Carrying amount at December 31, 2020	$	1,281	$	230,781		$	214,451	$	446,513

Right-of-use assets included in investment properties were leasehold land located in Shanghai and were subleased under operating leases.

The abovementioned investment properties were leased out for 1 to 15 years, with an option to extend for an additional lease term. The lease contracts contain market review clauses in the event that the lessees exercise their options to extend. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease term.

In addition to fixed lease payments, some of the lease contracts also indicated that the lessees should make variable payments determined at a specific percentage of the excess of respective lessee’s monthly revenues over a specific amount.

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

	December 31
	2019		2020
	NT$		NT$		US$ (Note 4)

Year 1	$	921,649	$	880,929	$	31,372
Year 2		744,366		688,123		24,506
Year 3		623,326		471,966		16,808
Year 4		408,634		383,307		13,651
Year 5		320,611		335,706		11,955
Year 6 onwards		830,091		664,259		23,656

	$	3,848,677	$	3,424,290	$	121,948

The investment properties were depreciated on a straight-line basis over the following useful lives:

Main buildings		10-40 years
Right-of-use assets		15-50 years

Because of the market conditions severely affected by COVID-19 in 2020, the Group agreed to provide unconditional rent reduction for some lease contracts. The rent concessions were accounted for as adjustments to related income over the remaining lease term. For the year ended December 31, 2020, total amount from the rent concessions was NT$54,139 thousand (US$1,928 thousand).

The fair value of the investment properties was measured using the market approach and the income approach based on level 3 inputs by independent professional appraisers. The significant unobservable inputs were discount rates. The fair value of the investment properties was as follows:

	December 31
	2019		2020
	NT$		NT$		US$ (Note 4)

Fair value	$	19,586,287	$	19,799,714	$	705,118

Refer to Note 36 for the carrying amount of the investment properties that had been pledged by the Group to secure borrowings.