ACER — Annual Report 2021

Nov 4, 2021

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Stock Code:2353

ACER INCORPORATED AND SUBSIDIARIES Consolidated Financial Statements With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) Organization and business (2) Authorization of the consolidated financial statements (3) Application of new and revised accounting standards and interpretations (4) Summary of significant accounting policies (5) Critical accounting judgments and key sources of estimation and assumption uncertainty (6) Significant account disclosures (7) Related-party transactions (8) Pledged assets (9) Significant commitments and contingencies (10) Significant loss from disaster (11) Significant subsequent events (12) Others (13) Additional disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Major shareholders (14) Segment information

Page

1 2 3 4 5 6 7 8 9 9 9～10 11～38 38 39～84 85～88 88 89 89 89 90 90, 94～110 90, 111～113 91, 114～115 91 91～93

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Representation Letter

The entities that are required to be included in the combined financial statements of Acer Incorporated as of and for the year ended December 31, 2021 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Acer Incorporated and Subsidiaries do not prepare a separate set of combined financial statements.

Hereby declare

Acer Incorporated Jason Chen Chairman March 16, 2022

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電 話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳 真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網 址 Web home.kpmg/tw

Independent Auditors’ Report

To the Board of Directors Acer Incorporated:

Opinion

We have audited the consolidated financial statements of Acer Incorporated and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Acer Incorporated and its subsidiaries as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), and interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits of the consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of Acer Incorporated and its subsidiaries in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (the “ Code” ), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

4-1

Key audit matters for the consolidated financial statements for the year ended December 31, 2021 are stated as follows:

1. Revenue recognition

Refer to Note 4(p) for the accounting policies on recognizing revenue and Note 5(a) for uncertainty of accounting estimations and assumptions for sales returns and allowances.

Description of key audit matter:

Acer Incorporated and its subsidiaries engaged primarily in the sale of brand-name IT products. Revenue is recognized depending on the various trade terms agreed with customers. This exposes Acer Incorporated and its subsidiaries to the risk that the sales transactions made close to the balance sheet date are not recorded in the appropriate period. Furthermore, the accrual of sales allowances and returns based on business practice is subject to management’ s judgment, which involves significant uncertainty. Consequently, the revenue recognition and accrual of sales allowances and returns have been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matters above, we have performed certain audit procedures including, among others, testing the design and operating effectiveness of Acer Incorporated and its subsidiaries’ internal controls over the timing of revenue recognition; performing a sample test of sales transactions taking place before and after the balance sheet date to ensure that revenue was recognized in the appropriate period; assessing the methodology used by management in estimating sales allowances and returns, including the reasonableness of key assumptions; and inspecting the historical payments of sales allowances and returns to evaluate the reasonableness of the sales allowances and returns estimated by management.

2. Valuation of inventories

Refer to Note 4(h) for the accounting policies on inventory valuation, Note 5(b) for uncertainty of accounting estimations and assumptions for inventory valuation and Note 6(e) for the details of the write-down of inventories.

Description of key audit matter:

Inventories are measured at the lower of cost and net realizable value. Due to the rapid innovation of computech industry and fierce market competition, Acer Incorporated and its subsidiaries’ product price may fluctuate rapidly. Furthermore, the stocks for products and components may exceed customers’ demands thus becoming obsolete. These factors expose Acer Incorporated and its subsidiaries to significant level of uncertainty particularly in the area of estimating net realizable value, which is subject to management’ s judgments. Therefore, the valuation of inventories has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain audit procedures including, among others, evaluating whether valuation of inventories was accounted for in accordance with Acer Incorporated and its subsidiaries’ accounting policies; obtaining the inventory aging report, analyzing the fluctuation of inventory aging and selecting samples to verify the accuracy of inventory aging classification; and testing the net realizable value of inventories to evaluate the reasonableness of inventory provisions.

3. Impairment of goodwill

Refer to Note 4(n) for the accounting policies on impairment of non-financial assets, Note 5(c) for uncertainty of accounting estimations and assumptions for goodwill impairment and Note 6(k) for the evaluation of goodwill impairment.

4-2

Description of key audit matter:

Goodwill arising from acquisition of subsidiaries is subject to impairment test annually or at the time there are indications that goodwill may have been impaired. The assessment of the recoverable amount of the cash-generating unit of goodwill involves management’s judgment and estimation with respect to the future cash flows and key assumptions which are complex and involve significant uncertainty. Accordingly, the assessment of impairment of goodwill has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain audit procedures including, among others, assessing the basis used by management for identifying the cash-generating units and whether book value of assets belonging to respective cash-generating units have been completely covered; assessing the appropriateness of the estimation base and key assumptions (in particular projected sales growth rate and weighted-average cost of capital) used by the management in measuring the recoverable amount; assessing the historical reasonableness of management’s estimates of business forecasts, and performing a sensitivity analysis of key assumptions. In addition to the above audit procedures, we have also involved a valuation specialist to evaluate the appropriateness of the weighted-average cost of capital used and its underlying assumptions; and inspecting the adequacy disclosures of related information on impairment evaluation of goodwill.

Other Matter

Acer Incorporated has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2021 and 2020, on which we have issued an unmodified audit opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs, IASs, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing Acer Incorporated and its subsidiaries’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Acer Incorporated and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing Acer Incorporated and its subsidiaries’ financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or aggregated, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

4-3

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Acer Incorporated and its subsidiaries’ internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Acer Incorporated and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause Acer Incorporated and its subsidiaries to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Acer Incorporated and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

4-4

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Huei-Chen Chang and Ching-Wen Kao.

KPMG

Taipei, Taiwan (Republic of China) March 16, 2022

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 44,619,541 21 1110 Financial assets measured at fair value through profit or loss－ current (note 6(b)) 3,222,868 2 1120 Financial assets measured at fair value through other comprehensive income－current (note 6(c)) - - 1140 Contract assets－current (note 6(x)) 451,354 - 1170 Notes and accounts receivable, net (notes 6(d) & (x)) 64,039,437 30 1180 Accounts receivable from related parties (notes 6(d) & (x) and 7) 1,329 - 1200 Other receivables (notes 6(d) and 7) 505,914 - 1220 Current income tax assets 486,468 - 130X Inventories (note 6(e)) 58,703,827 27 1470 Other current assets (note 6(l)) 3,064,500 1 Total current assets 175,095,238 81 Non-current assets: 1517 Financial assets measured at fair value through other comprehensive income－non-current (note 6(c) and 7) 7,806,702 4 1550 Investments accounted for using the equity method (note 6(f) and 7) 937,129 - 1600 Property, plant and equipment (notes 6(h)) 4,055,870 2 1755 Right-of-use assets (note 6(i)) 1,736,642 1 1760 Investment property (note 6(j)) 819,591 - 1780 Intangible assets (note 6(k)) 16,527,283 8 1840 Deferred income tax assets 3,671,634 2 1900 Other non-current assets (notes 6(l) & (s)) 2,943,066 1 1980 Other financial assets－non-current (note 8) 1,195,156 1 Total non-current assets 39,693,073 19 Total assets $ 214,788,311 100

December 31, 2020

Amount % 39,181,023 21 5,841,103 3 98,818 - 514,369 - 55,170,110 30 27,419 - 548,016 - 365,493 - 42,983,432 24 4,006,693 3 148,736,476 81 6,109,592 3 1,008,312 1 3,865,909 2 1,857,520 1 749,843 - 16,292,729 9 2,480,776 1 1,748,559 1 1,058,956 1 35,172,196 19 183,908,672 100

(Continued)

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets (Continued)

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(m) and 8) 2120 Financial liabilities measured at fair value through profit or loss－ current (note 6(b) & (g)) 2130 Contract liabilities－current (note 6(x)) 2170 Notes and accounts payable (note 7) 2200 Other payables (notes 6(y) and 7) 2230 Current tax liabilities 2250 Provisions－current (notes 6(q) and 9) 2280 Lease liabilities－current (note 6(p)) 2322 Current portion of long-term debt (notes 6(n) and 8) 2365 Refund liabilities－current 2399 Other current liabilities (note 6(s)) Total current liabilities Non-current liabilities: 2500 Financial liabilities measured at fair value through profit or loss－ non-current (note 6(b) & (g)) 2527 Contract liabilities－non-current (note 6(x)) 2531 Bonds payable (notes 6(o)) 2540 Long-term debt (notes 6(n) and 8) 2550 Provisions－non-current (note 6(q) and 9) 2570 Deferred income tax liabilities 2580 Lease liabilities－non-current (note 6(p)) 2600 Other non-current liabilities Total non-current liabilities Total liabilities Equity (note 6(u)): 3110 Common stock 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity 3500 Treasury stock Equity attributable to shareholders of the Parent 36XX Non-controlling interests Total equity Total liabilities and equity	December 31, 2021		December 31, 2020 Amount % 1,029,117 1 1,526,494 1 2,269,409 1 49,405,634 27 29,810,924 16 3,371,032 2 5,948,144 3 602,656 - 18,113 - 15,074,621 8 1,664,174 1 110,720,318 60 - - 827,783 - - - 3,395,102 2 33,121 - 3,555,113 2 1,353,697 1 2,081,574 1 11,246,390 6 121,966,708 66 30,478,538 17 27,378,068 15 853,852 1 3,976,265 2 6,038,916 3 (5,517,452) (3) (2,914,856) (2) 60,293,331 33 1,648,633 1 61,941,964 34 183,908,672 100

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

4000 Net revenue (notes 6(x), 7 and 14) 5000 Cost of revenue (notes 6(e), (h), (i), (k), (p), (q) & (s), 7 and 12) Gross profit Operating expenses(notes 6(d), (h), (i), (j), (k), (p), (q), (s), (v), (y), 7 and 12): 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses Total operating expenses 6500 Other operating income and expenses, net (notes 6(r) & (z) and 7) Operating income Non-operating income and loss: 7100 Interest income(note 6(aa)) 7010 Other income(note 6(aa)) 7020 Other gains and losses(notes 6(aa) and 7) 7050 Finance costs(notes 6(p) & (aa)) 7060 Share of profits (losses) of associates and joint ventures(note 6(f)) Total non-operating income and loss 7900 Income before taxes 7950 Income tax expense(note 6(t)) Net income Other comprehensive income (loss)(notes 6(f), (u), (ab)): 8310 Items that will not be reclassified subsequently to profit or loss 8311 Remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates 8349 Income tax related to items that will not be reclassified subsequently to profit or loss Total items that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of foreign operations 8370 Share of other comprehensive gains (losses) of associates 8399 Income tax related to items that may be reclassified subsequently to profit or loss Total items that may be reclassified subsequently to profit or loss Other comprehensive income (loss), net of taxes Total comprehensive income for the year Net income (loss) attributable to: 8610 Shareholders of the Parent 8620 Non-controlling interests Total comprehensive income (loss) attributable to: 8710 Shareholders of the Parent 8720 Non-controlling interests Earnings per share (in New Taiwan dollars) (note 6(w)): 9750 Basic earnings per share 9850 Diluted earnings per share		2021	% 100 (88) 12 (5) (2) (1) (8) - 4 - - - - - - 4 (1) 3 - - - - - (1) - - (1) (1) 2 3 - 3 2 - 2 3.63 3.60	2020 Amount % 277,112,477 100 (246,992,862) (89) 30,119,615 11 (14,397,099) (5) (4,632,802) (2) (2,382,649) (1) (21,412,550) (8) 228,773 - 8,935,838 3 315,460 - 243,073 - (437,479) - (155,301) - 3,512 - (30,735) - 8,905,103 3 (2,759,493) (1) 6,145,610 2 37,203 - 635,743 - 42 - 162 - 673,150 - (1,841,430) - (3,271) - - - (1,844,701) - (1,171,551) - 4,974,059 2 6,029,287 2 116,323 - 6,145,610 2 4,850,535 2 123,524 - 4,974,059 2 2.01 1.99

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Attributable to shareholders of the Parent

Balance at January 1, 2020 Net income for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Appropriation approved by the stockholders: Legal reserve Special reserve Cash dividends Cash distributed from capital surplus Adjustments of capital surplus for the cash dividends distributed to subsidiaries Purchase of treasury stock Retirement of treasury stock Share of changes in equity of associates Change in ownership interests in subsidiaries Acquisition and disposal of interests in subsidiaries Difference between consideration and carrying amount of subsidiaries disposed Stock option compensation cost of subsidiaries Reorganization under common control Increase in non-controlling interests Cash dividends paid to non-controlling interests by subsidiaries Disposal of financial assets measured at fair value through other comprehensive income by subsidiaries Balance at December 31, 2020 Net income for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Appropriation approved by the stockholders: Legal reserve Special reserve Cash dividends Adjustments of capital surplus for the cash dividends distributed to subsidiaries Share of changes in equity of associates Changes in ownership interests in subsidiaries Acquisition and disposal of interests in subsidiaries Difference between consideration and carrying amount of subsidiaries acquired or disposed Stock option compensation cost of subsidiaries Acquisition of subsidiaries Increase in non-controlling interests Cash dividends paid to non-controlling interests by subsidiaries Disposal of financial assets measured at fair value through other comprehensive income by subsidiaries Balance at December 31, 2021	Common stock	Capital surplus 28,152,962		Retain	ed earnings			Other	equity		Treasury stock (2,914,856)	Total equity attributable to shareholders of theparent 57,841,473	Non- controlling interests 1,353,766	Total equity 59,195,239
			Legal reserve 587,602	Special reserve 2,940,572	Unappropriated retained earnings 2,668,082	Total 6,196,256	Foreign currency translation differences	Unrealized gain (loss) from financial assets measured at fair value through other comprehensive income	Remeasurements of defined benefit plans (287,903)	Total (4,342,227)
	$ 30,749,338						(4,187,394)	133,070
	- -	- -	- -	- -	6,029,287 -	6,029,287 -	- (1,855,833)	- 632,065	- 45,016	- (1,178,752)	- -	6,029,287 (1,178,752)	116,323 7,201	6,145,610 (1,171,551)
	-	-	-	-	6,029,287	6,029,287	(1,855,833)	632,065	45,016	(1,178,752)	-	4,850,535	123,524	4,974,059
	- - - - - - (270,800) - - - - - - - - -	- - - (1,014,728) 36,416 - (91,143) 76,443 43,604 - 174,404 110 - - - -	266,250 - - - - - - - - - - - - - - -	- 1,035,693 - - - - - - - - - - - - - -	(266,250) (1,035,693) (1,352,971) - - - - - - - - - (12) - - (3,527)	- - (1,352,971) - - - - - - - - - (12) - - (3,527)	- - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - 3,527	- - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - 3,527	- - - - - (361,943) 361,943 - - - - - - - - -	- - (1,352,971) (1,014,728) 36,416 (361,943) - 76,443 43,604 - 174,404 110 (12) - - -	- - - - - - - 33,556 (43,604) 301,669 (174,404) 71 12 135,581 (76,181) (5,357)	- - (1,352,971) (1,014,728) 36,416 (361,943) - 109,999 - 301,669 - 181 - 135,581 (76,181) (5,357)
	30,478,538	27,378,068	853,852	3,976,265	6,038,916	10,869,033	(6,043,227)	768,662	(242,887)	(5,517,452)	(2,914,856)	60,293,331	1,648,633	61,941,964
	- -	- -	- -	- -	10,897,427 -	10,897,427 -	- (2,766,226)	- (324,225)	- 11,917	- (3,078,534)	- -	10,897,427 (3,078,534)	389,886 (64,073)	11,287,313 (3,142,607)
	-	-	-	-	10,897,427	10,897,427	(2,766,226)	(324,225)	11,917	(3,078,534)	-	7,818,893	325,813	8,144,706
	- - - - - - - - - - - - -	- - - 70,119 (24,908) 60,105 - 29,880 1,005 - - - -	602,575 - - - - - - - - - - - -	- 857,485 - - - - - - - - - - -	(602,575) (857,485) (4,571,781) - - - - - - - - - (308,290)	- - (4,571,781) - - - - - - - - - (308,290)	- - - - - 3,856 - - - - - - -	- - - - - (6,544) - - - - - - 308,290	- - - - - 2,760 - - - - - - -	- - - - - 72 - - - - - - 308,290	- - - - - - - - - - - - -	- - (4,571,781) 70,119 (24,908) 60,177 - 29,880 1,005 - - - -	- - - - (37,414) (60,177) 53,032 (29,880) 699 249,470 337,722 (141,671) -	- - (4,571,781) 70,119 (62,322) - 53,032 - 1,704 249,470 337,722 (141,671) -
	$ 30,478,538	27,514,269	1,456,427	4,833,750	10,596,212	16,886,389	(8,805,597)	746,183	(228,210)	(8,287,624)	(2,914,856)	63,676,716	2,346,227	66,022,943

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

2021 Cash flows from operating activities: Income before income tax $ 15,435,645 Adjustments for: Adjustments to reconcile profit or loss: Depreciation 1,022,560 Amortization 492,670 Net gain on financial assets measured at fair value through profit or loss (30,094) Interest expense 336,677 Net gain on disposal of investments accounted for using the equity method (47,815) Interest income (318,945) Dividend income (354,416) Share-based compensation cost 1,704 Share of profit of associates and joint ventures (68,427) Loss (gain) on disposal of equipment and intangible assets 8,252 Net gain on disposal of investment property (1,141) Property, plant and equipment reclassified to expenses 917 Intangible assets reclassified to expenses - Acquisition of financial asset by contribution of technical know-how - Gain on liquidation of subsidiaries and other investments (3,068) Total adjustments for profit or loss 1,038,874 Changes in operating assets and liabilities: Changes in operating assets: Derivative financial instruments measured at fair value through profit or loss (1,744,184) Contract assets 63,015 Notes and accounts receivable (8,283,499) Receivables from related parties 30,990 Inventories (15,317,842) Other receivables and other current assets 268,860 Other non-current assets (16,406) Changes in operating assets (24,999,066) Changes in operating liabilities: Contract liabilities 198,239 Notes and accounts payable 8,138,491 Other payables and other current liabilities 7,158,143 Provisions 622,044 Refund liabilities 1,052,018 Other non-current liabilities (11,505) Changes in operating liabilities 17,157,430 Cash provided by operations 8,632,883 Interest received 318,103 Income taxes paid (2,453,171) Net cash flows provided by operating activities 6,497,815

2020 8,905,103 1,078,156 573,592 (4,930) 155,301 - (315,460) (243,073) 181 (3,512) (2,713) - - 6,806 (17,421) (902) 1,226,025 960,364 (93,487) (5,716,202) 13,782 (1,968,800) 384,523 (5,429) (6,425,249) 602,249 14,181,820 5,252,540 995,189 2,633,421 155,044 23,820,263 27,526,142 319,923 (355,523) 27,490,542

(Continued)

See accompanying notes to consolidated financial statements.

8-1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Purchase of financial assets measured at fair value through other comprehensive income Proceeds from disposal of financial assets measured at fair value through other comprehensive income Proceeds from capital return and liquidation of financial assets measured at fair value through other comprehensive income Purchase of financial assets measured at fair value through profit or loss Proceeds from disposal of financial assets measured at fair value through profit or loss Proceeds from disposal of investments accounted for using equity method Additions to property, plant and equipment and investment property Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment property Additions to intangible assets Net cash flow from disposal of subsidiaries and other investments Net cash received from acquisition of subsidiaries Increase in assets recognized from costs to fulfill contracts with customers Decrease (increase) in other non-current financial assets Dividends received Net cash flows used in investing activities Cash flows from financing activities: Increase in short-term borrowings Decrease in short-term borrowings Proceeds from issuing bonds Increase in long-term debt Repayment of long-term debt Payment of lease liabilities Cash dividends Cash distributed from capital surplus Purchase of treasury stock Cash dividends paid to non-controlling interests by subsidiaries Issuance of common stock by subsidiaries not subscribed by the Group Acquisition of ownership to interests in subsidiaries Proceeds from disposal of interests in subsidiaries (without losing control) Interest paid Net cash flows provided by (used in) financing activities Effect of foreign exchange rate changes Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

See accompanying notes to consolidated financial statements.

9

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ACER INCORPORATED AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Per Share Information And Otherwise Specified)

1. Organization and business

Acer Incorporated (the “Company”) was incorporated on August 1, 1976, as a company limited by shares under the laws of the Republic of China (“ R.O.C.” ) and registered under the Ministry of Economic Affairs, R.O.C.

The Company and its subsidiaries (the “Group”) primarily engages in the marketing and sale of brandname IT products, as well as providing electronic information services to its clients. The Group aims at the integrated applications of Internet of Things (IoT) and service-oriented technology to provide more products and integrated applications combining software, hardware and service for consumer and commercial markets.

2. Authorization of the consolidated financial statements

These consolidated financial statements were authorized for issue by the Board of Directors on March 16, 2022.

3. Application of new and revised accounting standards and interpretations:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

• ●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”

• ●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”

• (b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statements:

• －

• ●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• －

• ●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”

• ●Annual Improvements to IFRS Standards 2018–2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

10

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Effective date per Interpretations Content of amendment IASB Amendments to IAS 1 The amendments aim to promote January 1, 2023 “Classification of Liabilities consistency in applying the requirements as Current or Non-current” by helping companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

• ●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(Continued)

11

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4. Summary of significant accounting policies

The significant accounting policies presented in the consolidated financial statements are summarized as follows and have been applied consistently to all periods presented in these financial statements.

(a) Statement of compliance

The Group’ s accompanying consolidated financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (the “ Regulations” ) and the IFRSs, IASs, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (collectively as “Taiwan-IFRSs”).

(b) Basis of preparation

• (i) Basis of measurement

The accompanying consolidated financial statements have been prepared on a historical cost basis except for the following items:

• 1) Financial instruments measured at fair value through profit or loss (including derivative financial instruments);

• 2) Financial assets measured at fair value through other comprehensive income; and

• 3) Net defined benefit liability measured at present value of defined benefit obligation less the fair value of plan assets.

• (ii) Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The Group’s consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional currency. Except when otherwise indicated, all financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(c) Basis of consolidation

• (i) Principles of preparation of the consolidated financial statements

The accompanying consolidated financial statements incorporate the financial statements of the Company and its controlled entities (the subsidiaries) in which the Company is exposed, or has right, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All intercompany transactions, balances and resulting unrealized income and loss are eliminated on consolidation. Total comprehensive income (loss) of a subsidiary is attributed to the shareholders of the Company and the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

When necessary, financial statements of subsidiaries are adjusted to align the accounting policies with those adopted by the Company.

(Continued)

12

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The difference between the adjustment of the noncontrolling interests and the fair value of the consideration paid or received is recognized directly in equity and attributed to the shareholders of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss, which is calculated as the difference between (1) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost, and (2) the previous carrying amount of the former subsidiary's assets (including goodwill), liabilities and non-controlling interest at the date when the Group loses control. All amounts recognized in other comprehensive income in relation to the subsidiary are accounted for on the same basis as would be required if the Group had directly disposed of the related assets and liabilities.

The fair value of any investment retained in a former subsidiary at the date when control is lost is regarded as the cost on initial recognition of a financial asset measured at fair value through other comprehensive income or an investment in an associate.

• (ii) List of subsidiaries included in the consolidated financial statements

Name of Investor Name of Investee Main Business and Products AHI Acer Market Services Limited (“AMS”, Hong Kong) Investment and holding activity AHI Acer Computer (Far East) Limited (“AFE”, Hong Kong) Sale of brand-name IT products AMS Acer Information (Zhong Shan) Co., Ltd. (“AIZS”, China) Sale of brand-name IT products AMS Acer Computer (Shanghai) Ltd. (“ACCN”, China) Sale of brand-name IT products AMS Acer (Chongqing) Ltd. (“ACCQ”, China) Sale of brand-name IT products The Company Acer European Holdings SA (“AEH”, Switzerland) Investment and holding activity AEH Acer Europe B.V. (“AHN”, the Netherlands) Investment and holding activity AEH Acer Computer (M.E.) Limited (“AME”, British Virgin Islands Sale of brand-name IT products AEH )Acer Africa (Proprietary) Limited (“AAF”, South Africa) Marketing, repair and maintenance of brand- name IT products AEH AGP Insurance (Guernsey) Limited (“AGU”, Guernsey) Insurance captive AEH Acer Sales International SA (“ASIN”, Switzerland) Sale of brand-name IT products AEH Acer Europe SA (“AEG”, Switzerland) Sale of brand-name IT products AEH Sertec 360 SA (“SER”, Switzerland) Repair and maintenance of IT products AHN Acer Computer France S.A.S.U. (“ACF”, France) Sale of brand-name IT products AHN Acer U.K. Limited (“AUK”, the United Kingdom) Sale of brand-name IT products AHN Acer Italy S.R.L. (“AIT”, Italy) Sale of brand-name IT products

Percentage of Ownership

December 31, 2021 December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 - % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

(Continued)

13

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor Name of Investee Main Business and Products AHN Acer Computer GmbH (“ACG”, Germany) Sale of brand-name IT products AHN Acer Austria GmbH (“ACV”, Austria) Marketing of brand- name IT products AHN Acer Czech Republic S.R.O. (“ACZ”, Czech Republic) Marketing, repair and maintenance of brand- name IT products AHN Acer Computer Iberica, S.A. (“AIB”, Spain) Sale of brand-name IT products AHN Acer Computer (Switzerland) AG (“ASZ”, Switzerland) Sale of brand-name IT products AHN Asplex Sp. z.o.o. (“APX”, Poland) Repair and maintenance of brand-name IT products AHN Acer Marketing Services LLC (“ARU”, Russia) Marketing of brand- name IT products AHN Acer Poland sp. z.o.o. (“APL”, Poland) Marketing of brand- name IT products AHN Acer Bilisim Teknolojileri Limited Sirketi (“ATR”, Turkey) Marketing of brand- name IT products AHN Acer Computer B.V. (“ACH”, the Netherlands) Sale of brand-name IT products AHN CPYou B.V. (“CPY”, the Netherlands) Sale of brand-name IT products AHN Enfinitec B.V. (“ENNL”, the Netherlands) Repair and management of IT products AHN Enfinitec Italy S.R.L (“ENIT”, Italy) Repair and management of IT products ACH Acer Computer Norway AS (“ACN”, Norway) Marketing, repair and maintenance of brand- name IT products ACH Acer Computer Finland Oy (“AFN”, Finland) Marketing, repair and maintenance of brand- name IT products ACH Acer Computer Sweden AB (“ACW”, Sweden) Marketing of brand- name IT products ACH Acer Denmark A/S (“ACD”, Denmark) Marketing of brand- name IT products The Company and AEH Boardwalk Capital Holdings Limited (“Boardwalk”, British Virgin Islands) Investment and holding activity Boardwalk Acer Computec Mexico, S.A. de C.V. (“AMEX”, Mexico) Sale of brand-name IT products Boardwalk Acer American Holdings Corp. (“AAH”, U.S.A.) Investment and holding activity Boardwalk AGP Tecnologia em Informatica do Brasil Ltda. (“ATB”, Brazil) Sale of brand-name IT products AMEX Aurion Tecnologia, S.A. de C.V. (“Aurion”, Mexico) Service company AAH Acer Cloud Technology Inc. (“ACTI”, U.S.A.) Investment and holding activity ACTI Acer Cloud Technology (US), Inc. (“ACTUS”, U.S.A.) Cloud technology service and research, development, and design of IoT platform AAH Gateway, Inc. (“GWI”, U.S.A.) Investment and holding activity

Percentage of Ownership

December 31, 2021 December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 - % 100.00 - % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 99.95 % 99.95 % 100.00 % 100.00 % 100.00 % 100.00 - % 99.95 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

(Continued)

14

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor Name of Investee Main Business and Products GWI Acer America Corporation (“AAC”, U.S.A.) Sale of brand-name IT products GWI Acer Service Corporation (“ASC”, U.S.A.) Repair and maintenance of brand-name IT products The Company Acer Holdings International, Incorporated (“AHI”, British Virgin Islands) Investment and holding activity AHI Acer Computer Co., Ltd. (“ATH”, Thailand) Sale of brand-name IT products AHI Acer Japan Corp. (“AJC”, Japan) Sale of brand-name IT products AHI Acer Computer Australia Pty. Limited (“ACA”, Australia) Sale of brand-name IT products AHI Acer Sales and Services SDN BHD (“ASSB”, Malaysia) Sale of brand-name IT products AHI Acer Asia Pacific Sdn Bhd (“AAPH”, Malaysia) Sale of brand-name IT products AHI Acer Computer (Singapore) Pte. Ltd. (“ACS”, Singapore) Sale of brand-name IT products AHI Acer Computer New Zealand Limited (“ACNZ”, New Zealand) Sale of brand-name IT products AHI PT. Acer Indonesia (“AIN”, Indonesia) Sale of brand-name IT products AIN PT. Acer Manufacturing Indonesia (“AMI”, Indonesia) Assembly of brand- name IT products AHI Acer India Private Limited (“AIL”, India) Sale of brand-name IT products AHI Acer Infotech Pvt Ltd. (“AIP”, India) Sale of brand-name IT products AHI Acer Vietnam Co., Ltd. (“AVN”, Vietnam) Sale of brand-name IT products AHI Acer Philippines, Inc. (“APHI”, Philippines) Sale of brand-name IT products ASSB Servex (Malaysia) Sdn Bhd (“SMA”, Malaysia) Sale of computers and communication products The Company Weblink International Inc. (“WLII”, Taiwan) Sale of computers and communication products WLII Wellife Inc. (“WELL”, Taiwan) Sales of 3C products and home appliances WLII Pecer Bio-medical Technology Incorporated (“PBT”, Taiwan) Sale of health supplements and biotech service WLII Protrade Global Limited (“PGL”, Cayman Islands) Investment and holding activity PGL Snoqualmie Company Ltd. (“SCL”, British Virgin Islands) Investment and holding activity PGL Protrade Asia Limited (“PAL”, British Virgin Islands) Trade and distribution of synthetic and natural rubber, plastic resins and related fillers PGL Dakota Co, Ltd. (“DCL”, Samoa) Investment and holding activity

Percentage of Ownership

December 31, 2021 December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 58.93 % 65.32 % 58.93 % 65.32 % 44.20 % 48.99 % 30.05 - % 30.05 - % 30.05 - % 30.05 -

(Continued)

15

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor Name of Investee Main Business and Products PGL Cascadia Resources Inc. (“CRI”, U.S.A.) Trade and distribution of synthetic and natural rubber, plastic resins and related fillers SCL Portrade Applied Materials Corp. (“PAM”, Taiwan) Trade and distribution of synthetic and natural rubber, plastic resins and related fillers DCL Protrade Shanghai Trading Co., Ltd. (“PST”, China) Trade and distribution of synthetic and natural rubber, plastic resins and related fillers PAM Protrade Resources Vietnam Company Limited (“PRV”, Vietnam) Trade and distribution of synthetic and natural rubber, plastic resins and related fillers The Company Acer Synergy Tech Corp. (“AST”, Taiwan) System integration service AST Shanghai AST Technology Service Ltd. (“ASTS”, China) System integration service AST ISU Service Corp. (“ISU”, Taiwan) Human resources and project service AST Acer Synergy Tech America Corporation (“ASTA”, U.S.A.) System integration service The Company Acer Digital Service Co. (“ADSC”, Taiwan) Investment and holding activity ADSC Acer Property Development Inc. (“APDI”, Taiwan) Solar optronics business ADSC Aspire Service & Development Inc. (“ASDI”, Taiwan) Hotel management service The Company and ADSC Acer Gaming Inc. (“AGM”, Taiwan) Agency of video game console and peripherals The Company Cross Century Investment Limited (“CCI”, Taiwan) Investment and holding activity The Company Acer SoftCapital Incorporated (“ASCBVI”, British Virgin Islands) Investment and holding activity ASCBVI DropZone Holding Limited (“DZH”, Cayman Islands) Investment and holding activity DZH DropZone (Hong Kong) Limited ("DZL", Hong Kong) Operation and maintenance of eSports platform The Company Acer Gadget Inc. (“AGT”, Taiwan)(Formerly E-ten Information System Co., Ltd. ) Research, design and sale of smart handheld products and peripheral 3C products The Company Acer BeingWare Holding Inc. (“ABH”, Taiwan) Investment and holding activity ABH Acer Cloud Technology (Taiwan) Inc. (“ACTTW”, Taiwan) Development of Internet of Beings and cloud technology, and integration of cloud technology, software and hardware

Percentage of Ownership

December 31, 2021 December 31, 2020 % 30.05 - % 30.05 - % 30.05 - % 30.05 - % 52.00 % 52.00 % 52.00 % 52.00 % 52.00 % 52.00 % 52.00 - % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

(Continued)

16

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor Name of Investee Main Business and Products ABH Altos Computing Inc. (“ALT”, Taiwan) High performance computing, cloud computing, software- defined storage, and IT solution ABH MPS Energy Inc. (“MPS”, Taiwan) Research, development, and sale of batteries ABH Acer e-Enabling Service Business Inc. (“AEB”, Taiwan) Providing solutions of cloud and digitalization ABH Acer ITS Inc. (“ITS”, Taiwan) Programs and services of intelligent transportation and electronic ticketing ABH Acer Medical Inc. (“AMED”, Taiwan) Intelligent medical examination and data interpretation analysis, medical big data, and health management and related information exchange ALT Beijing Altos Computing Ltd. (“BJAC”, China) High performance computing, cloud computing, software- defined storage, and IT solution ACTTW Acer Cloud Technology (Chongqing) Ltd. (“ACTCQ”, China) Design, development, sale, and advisory of computer software and hardware ACTTW and ABH Acer Being Communication Inc. (“ABC”, Taiwan) Software design service ACTTW Acer Being Signage Inc. (“ABST”, Taiwan) Technical service and research of aBeing cloud digital content management ABST Acer Being Signage GmbH (“ABSG”, Germany) Technical service and research of aBeing cloud digital content management ABH Xplova Inc. (“XPL”, Taiwan) Design, development and sale of smart bicycle speedometer ABH Acer AI Cloud Inc. (“AIC”, Taiwan) (Formerly Pawbo Inc.) Providing cloud technology and solutions XPL Xplova (Shanghai) Ltd. (“XPLSH”, China) Sale of smart bicycle speedometer and operating social platform for bicycle riding and sports The Company Acer Cyber Security Incorporated (“ACSI”, Taiwan) Cyber security service ACSI ACSI Cyber Security Academy Inc. (“ACAD”, Taiwan) Cyber security training The Company Acer China Venture Corp (“ACVC”, China) Fund company management

Percentage of Ownership

December 31, 2021 December 31, 2020 % 78.59 % 86.59 % 100.00 % 100.00 % 72.44 % 72.44 % 94.41 % 94.41 % 60.83 % 100.00 % 78.59 % 86.59 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 64.54 % 64.54 % 64.54 - % 100.00 % 100.00

(Continued)

17

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor Name of Investee Main Business and Products The Company and ACVC Acer China Venture Partnership (“ACVP”, China) Investment fund The Company Acer e-Enabling Data Center Incorporated (“EDC”, Taiwan) Data center and cloud services ABH and EDC Acer Third Wave Software (Beijing) Co. Ltd. (“TWPBJ”, China) Sale of commercial and cloud application software and technical service The Company Sertec (Beijing) Ltd. (“SEB”, China) Repair and maintenance of IT products The Company StarVR Corporation (“ASBZ”, Taiwan) Solutions provider of B2B virtual reality ASBZ StarVR Europe SA (“VRE”, Switzerland) Research of solutions to B2B virtual reality The Company AOPEN Inc. (“AOI”, Taiwan) Sale, manufacture, import and export of commercial computer products, software, components, peripheral equipment and apparatus; repair and maintenance service of computer products AOI AOPEN America Inc. (“AOA”, U.S.A.) Sale of computer, apparatus system, and peripheral equipment AOI AOPEN Computer B.V. (“AOE”, the Netherlands) Sale of computer, apparatus system, and peripheral equipment AOI AOPEN Technology Inc. (“AOTH”, British Virgin Islands) Sale of computer, apparatus system, and peripheral equipment AOI AOPEN Japan Inc. (“AOJ”, Japan) Sale of computer, apparatus system, and peripheral equipment AOI Aopen SmartVision Incorporated (“AOSV”, Taiwan) Sale of computer, apparatus system, and peripheral equipment AOI Heartware Alliance and Integration Limited (“HTW”, Hong Kong) Software development and agency AOI AOPEN Global Solutions Pty Ltd. (“AOGS”, Australia) Sale of computer, apparatus system, and peripheral equipment AOI AOPEN SmartView Incorporated (“AOSD”, Taiwan) Sale of display devices AOTH Great Connection LTD. (“GCL”, Hong Kong) Sale of computer, apparatus system, and peripheral equipment AOTH AOPEN International (ShangHai) Co., Ltd (“AOC”, China) Sale of computer, apparatus system, and peripheral equipment AOTH AOPEN Information Products (Zhongshan) Inc. (“AOZ”, China) Manufacture and sale of computer parts and components AOGS AOPEN Australia & New Zealand Pty Ltd (“AOAU”, Australia) Sale of computer, apparatus system, and peripheral equipment

Percentage of Ownership

December 31, 2021 December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 66.81 % 66.80 % 66.81 % 66.80 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 28.39 % 28.39 % 40.55 % 32.44 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 40.55 % 28.39 % 28.39

(Continued)

18

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor Name of Investee Main Business and Products The Company and AOI Bluechip Infotech Pty Ltd. (“Bluechip”, Australia) Sale of computer peripherals and software system Bluechip Bluechip Infotech Incorporated (“BLI”, Taiwan) Sale of computer peripherals and software system Bluechip Dingo Tech Pty Ltd. (“DTP”, Australia) Investment and holding activity DTP Digital Networks Australia Pty Ltd. (“DNA”, Australia) Sales of peripheral computer software DNA Ingeniq Pty Ltd. (“IGP”, Australia) Sales of peripheral computer software Bluechip Bluechip Infotech (NZ) Limited (“BLNZ”,New Zealand) Investment and holding activity BLNZ Soft Solutions Limited (“SSL”, New Zealand) Sales of peripheral computer software The Company GadgeTek Inc. (“GTI”, Taiwan) Sale of peripheral 3C products AGT and GTI GadgeTek (Shanghai) Limited (“GCN”, China) Sale of peripheral 3C products The Company Highpoint Service Network Corporation (“HSNC”, Taiwan) Repair and maintenance of IT products HSNC Highpoint Service Network (Thailand) Co., Ltd (“HSNT”, Thailand) Repair and maintenance of IT products HSNC Highpoint Service Network Vietnam Company Limited (“HSNV”, Vietnam) Repair and maintenance of IT products HSNC PT HSN Tech Indonesia (“HSNI”, Indonesia) Repair and maintenance of IT products HSNC HighPoint Service Network Sdn Bhd (“HSN”, Malaysia) Repair and maintenance of IT products HSNC Highpoint Services Network Philippines, Inc. (“HSNP”, Philippines) Repair and maintenance of IT products The Company AcerPure Inc. (“API”, Taiwan) Intelligent solutions of air quality The Company Acer Asset Management Incorporated (“AAM”, Taiwan) Property held and related management business

Percentage of Ownership

December 31, 2021 December 31, 2020 % 32.67 % 39.69 % 32.67 % 39.69 % 32.67 - % 32.67 - % 32.67 - % 100.00 - % 60.00 - - % 83.64 % 100.00 % 83.64 % 66.27 % 92.54 % 66.27 % 92.54 % 66.27 - % 66.27 % 92.54 % 66.27 % 92.54 % 66.27 % 92.54 % 100.00 % 100.00 % 100.00 -

ENNL, ENIT, ASTA, DTP, DNA, IGP, HSNV, BLNZ, SSL, AAM and ACAD were newly established subsidiaries or were acquired during 2021. AURION was merged into AMEX in the second quarter of 2021. GTI was merged into AGT in the second quarter of 2021. CPY, BLI, PBT and AGM were newly established subsidiaries during 2020.

(Continued)

19

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

WLII formerly owned 19% of ownership of PGL and its subsidiaries (PGL Group). On June 1, 2021, WLII acquired additional 32% of ownership of PGL Group and obtained control over PGL Group; therefore, the financial statements of PGL Group were included in the consolidated financial statements since then.

AME was liquidated in the third quarter of 2021 and was excluded from the accompanying consolidated financial statements since the date the control ceased.

Although the Group did not own more than half of the voting rights of Bluechip, the Group owns more than half of Bluechip's total number of directors; therefore, it is determined that the Group has control over Bluechip. Hence, the financial statements of Bluechip and its subsidiaries were included in the consolidated financial statements.

(iii) List of subsidiaries which are not included in the consolidated financial statements: None.

(d) Foreign currency

(i) Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. At the end of each reporting period (“ the reporting date” ), monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisition, are translated into the presentation currency of the Group’ s consolidated financial statements at the exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated into the presentation currency of the Group’s consolidated financial statements at the average exchange rates for the period. All resulting exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, joint control, or significant influence is lost, the accumulated exchange differences related to that foreign operation is reclassified to profit or loss. In the case of a partial disposal that does not result in the Group losing control over a subsidiary, the proportionate share of the accumulated exchange differences is reclassified to non-controlling interests. For a partial disposal of the Group’s ownership interest in an associate or joint venture, the proportionate share of the accumulated exchange differences in equity is reclassified to profit or loss.

(Continued)

20

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, the monetary item is, in substance, a part of net investment in that foreign operation, and the related foreign exchange gains and losses thereon are recognized as other comprehensive income.

• (e) Classification of current and non-current assets and liabilities

An asset is classified as current when one of the following criteria is met; all other assets are classified as non-current assets:

• (i) It is expected to be realized, or intended to be sold or consumed in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting period; or

• (iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current when one of the following criteria is met; all other liabilities are classified as non-current liabilities:

• (i) It is expected to be settled in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting period; or

• (iv) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(f) Cash and cash equivalents

Cash consists of cash on hand, checking deposits and demand deposits. Cash equivalents consist of short-term and highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits that meet the aforesaid criteria and are not held for investing purposes are also classified as cash equivalents.

(g) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issuance. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

21

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Financial assets

On initial recognition, a financial asset is classified as measured at: amortized cost, fair value through other comprehensive income (FVOCI), or fair value through profit or loss (FVTPL). All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, these assets are measured at amortized cost, using the effective interest method, less impairment loss. Interest income, foreign exchange gains and losses, and recognition (reversal) of impairment loss are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Financial assets measured at fair value through other comprehensive income

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment loss are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, other comprehensive income accumulated in equity are reclassified to profit or loss.

(Continued)

22

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income. On derecognition, other comprehensive income accumulated in equity is reclassified to retained earnings and is never reclassified to profit or loss.

Dividend income derived from equity investments is recognized on the date that the Group’s right to receive the dividends is established (usually the ex-dividend date).

• 3) Financial assets measured at fair value through profit or loss

All financial assets not classified as measured at amortized cost or at FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any dividend and interest income, are recognized in profit or loss.

• 4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (“ECL”) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables and other financial assets) and contract assets.

The Group measures loss allowances for accounts receivable, contract assets and other financial assets at an amount equal to lifetime ECL, except for the following financial assets which are measured using 12-month ECL:

• debt securities that are determined to have low credit risk at the reporting date; and

• bank balances for which credit risk (i.e., the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. The information includes both quantitative and qualitative information and analysis based on the Group’ s historical experience and credit assessment, as well as forward-looking information.

(Continued)

23

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

ECLs are probability-weighted estimate of credit losses over the expected life of financial assets. Credit losses are measured as the present value of all cash shortfalls (i.e., the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets; in these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual agreements and the definitions of a financial liability and an equity instrument.

2) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recognized at the amount of consideration received, less the direct issuing cost.

(Continued)

24

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Treasury stock

When shares recognized as equity are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury stock. When treasury stock is sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to cover the deficiency).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

• 5) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligation has been fulfilled or cancelled, or has expired. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of a financial liability derecognized and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

6) Offsetting of financial assets and liabilities

Financial assets and liabilities are presented on a net basis only when the Group has the legally enforceable right to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

• (iii) Derivative financial instruments and hedge accounting

The Group uses derivative financial instruments to hedge its foreign currency exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met. Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(Continued)

25

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group designates certain derivative instruments as either fair value hedges or cash flow hedges. At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows or fair value of the hedged item and hedging instrument are expected to offset each other.

• 1) Fair value hedge

Changes in the fair value of a hedging instrument that is qualified as a fair value hedge are recognized in profit or loss (or other comprehensive income, if the hedged item is an equity instrument measured at FVOCI).

• 2) Cash flow hedge

When a derivative is designated and qualified as a cash flow hedging instrument, the effective portion of changes in the fair value is recognized in other comprehensive income and accumulated in “other equity —gains (losses) on hedging instruments”, and is limited to the cumulative change in fair value of the hedged item from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the same periods when the hedged item is recognized in profit or loss, and are included in the same account in the statements of comprehensive income as the hedged item.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted-average method, and includes expenditure incurred in bringing them to their existing location and condition. Net realizable value represents the estimated selling price in the ordinary course of business, less all estimated costs of completion and necessary selling expenses.

• (i) Investments accounted for using the equity method

Investments accounted for using the equity method include investments in associates and interests in joint venture.

An associate is an entity in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

(Continued)

26

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The Group recognizes its share of the profit or loss and other comprehensive income of those associates from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in percentage of ownership.

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated investors’ interests in the associate.

Adjustments are made to associates’ financial statements to conform to the accounting polices applied by the Group.

When the Group’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group discontinues the use of the equity method and measures the retained interest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing of a part interest in the associate, and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Group accounts for all the amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss (or retained earnings) on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (or retained earnings) when the equity method is discontinued. If the Group’s ownership interest in an associate is reduced while it continues to apply the equity method, the Group reclassifies the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to the reduction in ownership interest to profit or loss (or retained earnings).

When the Group subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Group’s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus. If the adjustments are charged to capital surplus and the capital surplus resulting from investments accounted for using the equity method is not sufficient, the remaining difference is debited to retained earnings. If the Group’s ownership interest is reduced due to the additional subscription to the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(Continued)

27

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A joint venture is a joint arrangement whereby the Group has joint control of the arrangement (i.e. joint ventures) in which the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The Group recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless the Group qualifies for exemption from that Standard.

When assessing the classification of a joint arrangement, the Group considers the structure and legal form of the arrangement, the terms in the contractual arrangement, and other facts and circumstances. When the facts and circumstances change, the Group reevaluates whether the classification of the joint arrangement has changed.

(j) Property, plant and equipment

(i) Recognition and measurement

Property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the purpose of the property changes from owner-occupied to investment.

• (iii) Subsequent costs

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

(iv) Depreciation

Depreciation is calculated on the cost of assets less their residual values and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated. The estimated useful lives of property, plant and equipment are as － follows: buildings main structure - 30 to 50 years; air-conditioning system - 10 years; other equipment pertaining to buildings - 20 years; computer and communication equipment - 2 to 5 years; other equipment - 3 to 10 years.

Depreciation methods, useful lives, and residual values are reviewed at each financial yearend, with the effect of any changes in estimate accounted for on a prospective basis.

(Continued)

28

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. The methods for depreciating and determining the useful life and residual value of investment property are the same as those adopted for property, plant and equipment.

Rental income from investment property is recognized as other operating income and expenses on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

An investment property is reclassified to property, plant and equipment at its carrying amount when the purpose of the investment property has been changed from investment to owner-occupied.

(l) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• (i) As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically evaluated and reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• － fixed payments, including in-substance fixed payments;

• － variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• － amounts expected to be payable under a residual value guarantee; and

• － payments for purchase or termination options that are reasonably certain to be exercised.

(Continued)

29

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured when:

• － there is a change in future lease payments arising from the change in an index or rate; or

• － there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or

• － there is a change of the Group’ s assessment on whether it will exercise an option to purchase the underlying asset, or;

• － there is a change in the lease term resulting from a change of the Group’s assessment on whether it will exercise an extension or termination option; or

• －

• there is any lease modifications in lease subject, scope of the lease or other terms.

At inception or on reassessment of whether a contract contains a lease, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings, the Group has elected not to separate non-lease components and account for each lease component and any associated non-lease components as a single lease component.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize the difference in profit or loss for any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment properties, and lease liabilities as a separate line item respectively in the consolidated balance sheets.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(Continued)

30

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

For operating lease, the Group recognizes rental income on a straight-line basis over the lease term.

(m) Intangible assets

(i) Goodwill

Goodwill arising from acquisitions of subsidiaries is accounted for as intangible assets. Refer to note 4(v) for the description of the measurement of goodwill at initial recognition. Goodwill arising from acquisitions of investments accounted for using the equity method is included in the carrying amount of the investments. Goodwill is not amortized but is measured at cost less accumulated impairment losses.

(ii) Trademarks

Trademarks acquired in a business combination are measured at fair value at the acquisition date. Subsequent to the initial recognition, trademarks with definite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over the estimated useful lives of 7 years. Trademarks with indefinite useful lives are carried at cost less any accumulated impairment losses and are tested for impairment annually. The useful life of an intangible asset not subject to amortization is reviewed annually at each financial year-end to determine whether events and circumstances continue to support an indefinite useful life assessment for the asset. Any change in the useful life assessment from indefinite to definite is accounted for as a change in accounting estimate.

(iii) Other intangible assets

Other separately acquired intangible assets are carried at cost or fair value at the acquisition date, less accumulated amortization and accumulated impairment losses. Amortization is recognized in profit or loss on a straight-line basis over the following estimated useful lives: customer relationships - 7 to 10 years; developed technology - 10 years; channel resources - 8.8 years; developing technology - 15 years; patents - 4 to 15 years; acquired software - 1 to 3 years.

The residual value, amortization period, and amortization method are reviewed at least at each financial year-end, with the effect of any changes in estimate accounted for on a prospective basis.

(Continued)

31

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Impairment of non-financial assets

The Group assesses at the end of each reporting date whether there is any indication that the carrying amounts of non-financial assets (other than inventories, contract assets, and deferred tax assets) may be impaired. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually or when there are indications of impairment.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets. Goodwill arising from a business combination is allocated to cash-generating units (“CGUs”) or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an individual asset or CGU is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other non-financial assets, an impairment loss is reversed only to the extent that the asset’s carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the assets in prior years.

(o) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

(i) Warranties

A provision for warranties is recognized when the underlying products or services are sold. This provision reflects the historical warranty claim rate and the weighting of all possible outcomes against their associated probabilities.

(ii) Others

Provisions for litigation claims and environmental restoration are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

(Continued)

32

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Revenue recognition

• (i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1) Sale of goods

The Group recognizes revenue when control of the products has been transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The Group recognizes revenue based on the price specified in the contract, net of the estimated volume discounts and rebates. Accumulated experience is used to estimate the discounts and rebates using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A refund liability is recognized for expected sales discounts and rebate payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are made with a credit term ranged from 30 to 90 days, which is consistent with the market practice.

Some subsidiaries of the Group grant their customers the right to return the products within 90 days. Therefore, they reduce revenue by the amount of expected returns and recognize a refund liability and a right to the returned goods. Accumulated experience is used to estimate such returns at the time of sale. At each reporting date, the Group reassesses the estimated amount of expected returns.

The Group’s obligation to provide a refund for faulty goods under the standard warranty terms is recognized as a provision for warranty. Please refer to note 6(p) for more explanation.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

(Continued)

33

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Revenue from service rendered

The Group provides system implementation or integration services to enterprise customers. Revenue from providing services is recognized in the accounting periods in which the services are rendered. For performance obligations that are satisfied over time, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. The proportion of services provided is determined based on the portion of the work performed, the time passed by, or the milestone reached.

Estimates of revenues, costs, or extent of progress toward completion, are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by the management.

In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the accumulated revenue recognized by the Group exceeds the payments, a contract asset is recognized. If the payments exceed the accumulated revenue recognized, a contract liability is recognized.

3) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and the payment made by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(ii) Contract costs

1) Incremental costs of obtaining a contract

The Group recognizes the incremental costs of obtaining a contract with a customer as an asset if the Group expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred, regardless of whether the contract was obtained, shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Group applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Group otherwise would have recognized is one year or less.

(Continued)

34

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Assets recognized from costs to fulfill contracts with customers

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (e.g., IAS 2 Inventories , IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets ), the Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

• the costs relate directly to a contract or to an anticipated contract that the Group can specifically identify;

• the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

• the costs are expected to be recovered.

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Group cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations (or partially satisfied performance obligations) are recognized as expenses when incurred.

(q) Government grant

A government grant is recognized in profit or loss only when there is reasonable assurance that the Group will comply with the conditions associated with the grant and that the grant will be received.

A government grant is recognized in profit or loss in the period in which it becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group without future related costs.

Government grant is recorded in other operating income and expenses.

(r) Employee benefits

• (i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are expensed during the year in which employees render services.

(ii) Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The discount rate for calculating the present value of the defined benefit obligation refers to the interest rate of high-quality government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension obligation. The defined benefit obligation is calculated annually by qualified actuaries using the projected unit credit method.

(Continued)

35

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the benefits of a plan are improved, the expenses related to the increased obligations resulting from the services rendered by employees in the past years are recognized in profit or loss immediately.

The remeasurements of the net defined benefit liability (asset) comprise (i) actuarial gains and losses; (ii) return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (iii) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset). The remeasurements of the net defined benefit liability (asset) are recognized in other comprehensive income and reflected in other equity.

The Group recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of plan assets and any change in the present value of the defined benefit obligation.

(iii) Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed during the period in which employees render services. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to make such payments as a result of past service provided by the employees, and the obligation can be estimated reliably.

(s) Share-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, and the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the sharebased payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The grant date of options for employees to subscribe new shares for a cash injection is the date when the Board of Directors approves the exercise price and the shares to which employees can subscribe.

(t)

Income taxes

Income taxes comprise current taxes and deferred taxes. Current and deferred taxes are recognized in profit or loss unless they relate to business combinations or items recognized directly in equity or other comprehensive income.

(Continued)

36

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred income taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not recognized for:

• (i) Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• (ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for unused tax losses, tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

37

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Business combinations

The Group accounts for business combinations using the acquisition method. The goodwill arising from an acquisition is measured as the excess of the acquisition-date fair value of consideration transferred, including the amount of non-controlling interest in the acquiree, over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed (generally at fair value). If the amount calculated above is a deficit balance, the Group recognizes that amount as a gain on a bargain purchase in profit or loss immediately after reassessing whether it has correctly identified all of the assets acquired and all of the liabilities assumed. For each business combination, non-controlling interest in the acquiree is measured either at fair value or at the non-controlling interest’s proportionate share of the fair value of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred except for the costs related to issuance of debt or equity instruments.

For each business combination, the Group measures any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’ s proportionate share of the acquiree’ s identifiable net assets, if the non-controlling interests are present ownership interests and entitle their holders to a proportionate share of the acquiree’ s net assets in the event of liquidation. Other components of non-controlling interests are measured at their acquisition-date fair values, unless another measurement basis is required by the IFRSs endorsed by the FSC.

In a business combination achieved in stages, the Group shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss in profit or loss. The amount previously recognized in other comprehensive income in relation to the changes in the value of the Group’s equity interest should be reclassified to profit or loss on the same basis as would be required if the Group had disposed directly of the previously held equity interest.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, provisional amounts for the items for which the accounting is incomplete are reported in the financial statements. During the measurement period, the provisional amounts recognized at the acquisition date are retrospectively adjusted, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period shall not exceed one year from the acquisition date.

(v) Earnings per share (“EPS”)

The basic and diluted EPS attributable to stockholders of the Parent are disclosed in the consolidated financial statements. Basic EPS is calculated by dividing net income attributable to stockholders of the Parent by the weighted-average number of common shares outstanding during the year. In calculating diluted EPS, the net income attributable to stockholders of the Parent and weightedaverage number of common shares outstanding during the year are adjusted for the effects of dilutive potential common shares. The Group’s dilutive potential common shares include profit sharing for employees to be settled in the form of common stock.

(Continued)

38

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(w) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker, who decides on the allocation of resources to the segment and assesses its performance. Each operating segment consists of standalone financial information.

5. Critical accounting judgments and key sources of estimation and assumption uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and TaiwanIFRSs requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in the future periods affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is included as follows:

(a) Revenue recognition (accrual of sales return and allowance)

The Group records a refund liability for estimated future returns and other allowances in the same period the related revenue is recognized. Refund liability for estimated sales returns and other allowances is generally made and adjusted based on historical experience, channel inventory, market and economic conditions, and any other factors that would significantly affect the allowance. The adequacy of estimations is reviewed periodically. The fierce market competition and rapid evolution of technology could result in significant adjustments to the accruals made.

(b) Valuation of inventory

Inventories are measured at the lower of cost or net realizable value. The Group uses judgment and estimates to determine the net realizable value of inventory at each reporting date.

Since the Group is under the electronics industry that is rapidly innovative, the Group estimates the net realizable value of inventory, taking obsolescence and unmarketable items into account at the reporting date, and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions of future demand within a time horizon, which could result in significant adjustments. Refer to note 6(e) for further description of inventory write-downs.

(c) Impairment of goodwill

The assessment of impairment of goodwill requires the Group to make subjective judgments to identify cash-generating units, allocate the goodwill to relevant cash-generating units, and estimate the recoverable amount of relevant cash-generating units. Any changes in these estimates based on changed economic conditions or business strategies could result in significant adjustments in future years. Refer to note 6(k) for further description of the impairment of goodwill.

(Continued)

39

ACER INCORPORATED AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

6. Significant account disclosures

(a) Cash and cash equivalents

December 31, 2021 Cash on hand $ 4,205 Bank deposits 36,351,659 Time deposits 8,263,677 $ 44,619,541 Financial instruments measured at fair value through profit or loss December 31, 2021 Financial assets mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Foreign currency forward contracts $ 680,128 Non-derivative financial assets Stocks listed on foreign markets 1,754 Open-end funds 2,540,986 $ 3,222,868 Financial liabilities held for trading: Derivatives－Foreign currency forward contracts $ (259,225) Financial liabilities measured at fair value through profit or loss: Contingent consideration arising from business combinations (note 6(g)) (35,758) $ (294,983) Current $ (291,917) Non-current (3,066) $ (294,983)

December 31, 2020 4,151 27,397,795 11,779,077 39,181,023 December 31, 2020 203,213 2,160 5,635,730 5,841,103 (1,526,494) - (1,526,494) (1,526,494) - (1,526,494)

(b) Financial instruments measured at fair value through profit or loss

Please refer to note 6(aa) for the amounts recognized in profit or loss arising from remeasurement at fair value.

(Continued)

40

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group entered into derivative contracts to manage foreign currency exchange risk arising from operating activities. At each reporting date, the outstanding foreign currency forward contracts that did not conform to the criteria for hedge accounting consisted of the following (the contract amount was presented in USD):

• (i) Foreign currency forward contracts

December 31, 2021

Contract amount (in thousands) USD 119,159 USD 685 USD 28,051 USD 11,626 USD 18,185 USD 533,740 USD 1,279 USD 73,745 USD 110,801 USD 10,494 USD 58,479 USD 8,200 USD 60,000 USD 70,800 USD 229,969 USD 31,917 USD 16,700 USD 30,500 USD 584,224 USD 19,600 USD 105,197 USD 20,000 USD 98,000

Currency Maturity period AUD / USD 2022/01~2022/06 AUD / NTD 2022/02~2022/03 EUR / CHF 2022/01~2022/05 EUR / NOK 2022/01~2022/05 EUR / SEK 2022/01~2022/06 EUR / USD 2022/01~2022/05 EUR / NTD 2022/01~2022/03 EUR / PLN 2022/01~2022/06 GBP / USD 2022/01~2022/05 NZD / USD 2022/01~2022/05 USD / CAD 2022/01~2022/02 USD / CLP 2022/01 USD / CNY 2022/01~2022/04 USD / IDR 2022/01~2022/04 USD / INR 2022/01~2022/06 USD / JPY 2022/01~2022/08 USD / MXN 2022/01~2022/03 USD / MYR 2022/01~2022/03 USD / NTD 2022/01~2022/11 USD / PHP 2022/01~2022/03 USD / RUB 2022/01~2022/04 USD / SGD 2022/01~2022/05 USD / THB 2022/01~2022/03

(Continued)

41

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020

Contract amount (in thousands) USD 79,182 USD 295 USD 583 USD 10,951 USD 14,127 USD 362,602 USD 1,325 USD 48,129 USD 166,755 USD 12,570 USD 81,374 USD 54,200 USD 27,000 USD 19,500 USD 15,000 USD 129,105 USD 146,869 USD 32,800 USD 20,500 USD 591,550 USD 9,600 USD 72,577 USD 10,000 USD 42,000

Currency Maturity period AUD / USD 2021/01~2021/05 EUR / DKK 2021/01 EUR / CHF 2021/01~2021/05 EUR / NOK 2021/01~2021/07 EUR / SEK 2021/01~2021/06 EUR / USD 2021/01~2021/05 EUR / NTD 2021/01~2021/02 EUR / PLN 2021/01~2021/05 GBP / USD 2021/01~2021/09 NZD / USD 2021/01~2021/05 USD / CAD 2021/01~2021/04 USD / CLP 2021/03~2021/07 USD / CNY 2021/01~2021/02 USD / COP 2021/01~2021/03 USD / IDR 2021/01~2021/02 USD / INR 2021/01~2021/07 USD / JPY 2021/01~2021/07 USD / MXN 2021/01~2021/05 USD / MYR 2021/01~2021/02 USD / NTD 2021/01 USD / PHP 2021/01~2021/03 USD / RUB 2021/01~2021/05 USD / SGD 2021/01~2021/03 USD / THB 2021/01~2021/03

(Continued)

42

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Financial assets measured at fair value through other comprehensive income

Equity investments measured at fair value through other comprehensive income Domestic listed stock Unlisted stock Current Non-current	December 31, 2021 $ 7,064,857 741,845 $ 7,806,702 $ - 7,806,702 $ 7,806,702	December 31, 2020
		5,096,859 1,111,551
		6,208,410
		98,818 6,109,592
		6,208,410

The Group designated the investments shown above as financial assets measured at fair value through other comprehensive income (FVOCI) because these equity instruments are held for longterm strategic purposes and not for trading.

Certain financial assets measured at FVOCI were disposed of in 2021 and 2020. The realized loss accumulated in other comprehensive income of $308,290 and $3,527 have been reclassified from other equity to retained earnings.

(d) Notes and accounts receivable, net (measured at amortized cost)

Notes receivable Accounts receivable Less: loss allowance Accounts receivable from related parties (note 7(b))	December 31, 2021 $ 213,707 63,946,493 (120,763) 64,039,437 1,329 $ 64,040,766	December 31, 2020 262,143 55,099,972 (192,005) 55,170,110 27,419 55,197,529

(Continued)

43

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group applies the simplified approach to provide for its expected credit losses, i.e., the use of lifetime expected loss provision for all receivables. Forward looking information is taken into consideration as well. Analysis of expected credit losses on notes and accounts receivable was as follows:

Current Past due 1-30 days Past due 31-60 days Past due 61-90 days Past due 91-180 days Past due 181 days or over Current Past due 1-30 days Past due 31-60 days Past due 61-90 days Past due 91-180 days Past due 181 days or over	December 31, 2021	December 31, 2021	Loss allowance (56,097) (16,893) (7,155) (8,400) (7,025) (25,193) (120,763) Loss allowance (88,984) (16,861) (32,387) (7,662) (19,605) (26,506) (192,005)
	Gross carrying amount Weighted- average loss rate $ 59,972,724 0.09% 3,550,650 0.48% 441,709 1.62% 81,506 10.31% 63,545 11.06% 50,066 50.32% $ 64,160,200 December 31, 2020
		Weighted- average loss rate 0.17% 0.54% 9.59% 3.07% 18.83% 55.70%

As of December 31, 2021 and 2020, no expected credit losses was provided for accounts receivable from related parties after management’s assessment.

(Continued)

44

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Movements of the allowance for notes and accounts receivable were as follows:

Balance at January 1 Impairment losses recognized (reversal of impairment loss) Acquisition through business combination Write-off Effect of exchange rate changes Balance at December 31	2021 $ 192,005 (35,070) 6,911 (35,458) (7,625) $ 120,763	2020 136,322 67,865 - (11,511) (671) 192,005

The Group entered into factoring agreements with financial institutions to sell its accounts receivable. Under the agreements, the Group does not have the responsibility to assume the default risk of the transferred accounts receivable but is liable for the losses incurred on any business dispute. The Group derecognized the above accounts receivable as it has transferred substantially all of the risks and rewards of ownership of the accounts receivable, and it did not have any continuing involvement in them. The accounts receivable from the financial institutions were recognized as “other receivables” upon the derecognition of those accounts receivable. As of December 31, 2021 and 2020, the Group sold its accounts receivable without recourse as follows:

		December 31, 2021	December 31, 2021	December 31, 2021
Purchaser Amount Derecognized HSBC Bank $ 364,861		Amount Advanced Unpaid Amount Advanced Paid Amount Recognized in Other Receivables 19,007 345,854 19,007 December 31, 2020			Range of Interest Rate Significant Transferring Terms 5.25% None
Purchaser Amount Derecognized HSBC Bank $ 1,104,814		Amount Advanced Unpaid 69,293	Amount Advanced Paid 1,035,521	Amount Recognized in Other Receivables 69,293	Range of Interest Rate Significant Transferring Terms 5.25%~8.20% None

(e) Inventories

Raw materials Work in process Finished goods and merchandise Spare parts Inventories in transit	December 31, 2021 $ 15,676,331 18,380 22,188,155 1,073,057 19,747,904 $ 58,703,827	December 31, 2020
		13,279,411 6,265 13,798,158 842,860 15,056,738
		42,983,432

For the years ended December 31, 2021 and 2020, the amounts of inventories recognized as cost of revenue were $255,560,066 and $219,979,248, respectively, of which $1,943,032 and $21,879, respectively, was the write-down of inventories to net realizable value.

(Continued)

45

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (f) Investments accounted for using the equity method

A summary of the Group’s investments in associates and joint ventures at the reporting date is as follows:

Name of Associates and Joint Ventures Associates： GrandPad Inc. (“GrandPAD”) Apex Material Technology Corp. (“AMTC”) Antung Trading Corporation (“ANT”) Meldcx Pty Ltd. (“MPL”) Others Joint Ventures: Smart Frequency Technology Inc. (“SFT”, note(i))	December 31, 2021 Percentage of ownership Carrying amount 28.88 $ 169,885 7.01 317,106 11.79 275,656 - - - 102,881 55.00 71,601 $ 937,129	December 31, 2020	December 31, 2020
	Percentage of ownership 28.88 7.01 11.79 - - 55.00	Percentage of ownership 29.17 8.14 13.06 27.21 - 55.00	Carrying amount
			187,339 352,098 239,657 44,719 95,181 89,318
			1,008,312

Note (i): According to the joint venture agreement with a third party, the Group and the other party have joint control over SFT. Accordingly, this investment is accounted for using the equity method.

AOI donated partial of its ownership interest in MPL, formerly an investment accounted for using the equity method, to Acer Foundation on August 30, 2021. Consequently, AOI’s ownership interest in MPL decreased from 27.21% to 17.21% and lost significant influence over it. Therefore, AOI reclassified the investment to fair value through other comprehensive income (FVOCI) － noncurrent and recognized a gain on disposal of investment of $47,815, which was included in “other gains and losses” in the accompanying statements of comprehensive income.

Aggregated financial information on associates that were not individually material to the Group is summarized as follows.

Attributable to the Group: Net income Other comprehensive income (loss) Total comprehensive income	2021 $ 86,144 2,183 $ 88,327	2020 23,225 (3,229) 19,996

(Continued)

46

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial information on joint venture that was not individually material to the Group is summarized as follows.

Attributable to the Group: Net loss Other comprehensive income Total comprehensive loss	2021 $ (17,717) - $ (17,717)	2020 (19,713) - (19,713)

(g) Acquisition of subsidiary

Information of significant acquisition of subsidiary in 2021 was as follows:

On June 1, 2021, WLII acquired 32% of ownership interest in Protrade Global Ltd. After the acquisition, WLII's interest in Protrade Global Ltd. increased from 19% to 51%, and therefore obtained control over it since then.

Protrade Global Ltd. and its subsidiaries (the “Protrade”) are mainly engaged in the global trade and distribution of synthetic rubber, plastics and related chemical products and raw materials as well as the logistic business. Although Protrade engages in different industry with WLII, they both involve in channel resources and platform industry. While WLII is developing “partnership economic” and cross-industry platform, it is expected to be benefited from the synergies of including Protrade as one of the important partners of the cross-industry alliance.

The purchase consideration, assets acquired and liabilities assumed at the acquisition date and goodwill recognized were as follows:

(i) Fair value of consideration transferred the acquisition date.

Cash	$	184,923
Contingent consideration		35,758
	$	220,681

According to the contingent consideration arrangements, the contingent consideration is estimated based on Protrade’s consolidated net income in 2021 and 2022 and the maximum amount of the contingent consideration does not exceed US$1,672. The potential undiscounted contingent payments to be paid by the Group ranges from US$0 to US$1,672.

(Continued)

47

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Identifiable assets acquired and liabilities assumed

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date (June 1, 2021).

acquisition date (June 1, 2021).
Cash and cash equivalents	$	373,961
Financial assets measured at fair value
through profit or loss		46,504
Notes and accounts receivable, net		408,925
Other receivables		4,863
Inventories		404,619
Other current assets		380,392
Property, plant and equipment		134,224
Right-of-use assets		24,211
Intangible assets		183,663
Other non-current assets		7,909
Short-term borrowings		(827,234)
Contract liabilities		(162,464)
Notes and accounts payable		(175,947)
Other payables		(450,656)
Current income tax liabilities		(5,607)
Other current liabilities		(397)
Lease liabilities－non-current		(24,503)
Other non-current liabilities		(976)
Fair value of identifiable net assets	$	321,487

(iii) Goodwill

Goodwill arising from the acquisition has been recognized as follows.

Consideration transferred	$	220,681
Add: Non-controlling interest in the acquiree (proportionate
share of the fair value of the identifiable net assets)		157,528
Fair value of pre-existing interest in the acquiree		96,068
Less: Fair value of identifiable net assets		(321,487)
Goodwill (reported under intangible assets)	$	152,790

WLII remeasured the fair value of its pre-existing 19% ownership of Protrade at the acquisition date, resulting in a valuation loss of $56,915, which was accumulated in other equity. At the acquisition date, the related other comprehensive loss accumulated in other equity has been reclassified to retained earnings by WLII, and the Group reduced the retained earnings of $33,538 accordingly based on its ownership interest in WLII.

(Continued)

48

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Goodwill arising from the acquisition of Protrade is mainly due to value of workforce. It is expected to be benefited from the synergies of cross-industry alliance between Protrade and the Group. None of the goodwill recognized is expected to be deductible for tax purposes.

(iv) Pro forma information

From the acquisition date to December 31, 2021, Protrade contributed revenue of $3,279,739 and net income of $39,306 to the Group’s operating results. If the acquisition had occurred on January 1, 2021, the management estimates that consolidated revenue would have been $320,987,875, and consolidated net income would have been $11,372,141.

(h) Property, plant and equipment

Cost or deemed cost: Balance at January 1, 2021 Acquisition through business combination Additions Disposals Reclassification to investment property Other reclassification and effect of exchange rate changes Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Reclassification to investment property Other reclassification and effect of exchange rate changes Balance at December 31, 2020 Accumulated depreciation and impairment loss: Balance at January 1, 2021 Acquisition through business combination Depreciation Disposals Reclassification to investment property Other reclassification and effect of exchange rate changes Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposals Reclassification to investment property Other reclassification and effect of exchange rate changes Balance at December 31, 2020	Land $ 1,873,139 103,224 4,690 - (122,442) (16,904) $ 1,841,707 $ 1,488,736 12,975 (16,819) 441,384 (53,137) $ 1,873,139 $ 320,633 - - - (41,210) (546) $ 278,877 $ 141,231 - - 178,856 546 $ 320,633	Buildings 4,390,547 35,644 42,277 (2,237) (256,771) (43,009) 4,166,451 3,014,187 25,311 (4,746) 1,347,361 8,434 4,390,547 3,036,852 7,544 57,688 (2,237) (240,832) (34,985) 2,824,030 1,780,210 60,484 - 1,188,216 7,942 3,036,852	Computer and communication equipment 4,342,028 11,403 135,544 (2,891,334) - 176,534 1,774,175 4,311,454 121,820 (103,634) - 12,388 4,342,028 4,037,151 7,701 122,762 (2,888,047) - (32,076) 1,247,491 4,014,067 124,133 (94,311) - (6,738) 4,037,151	Other equipment 2,884,783 17,866 133,572 (287,864) - (178,665) 2,569,692 2,971,764 147,461 (262,678) - 28,236 2,884,783 2,236,256 9,643 139,538 (272,639) - (132,414) 1,980,384 2,304,923 143,258 (225,544) - 13,619 2,236,256	Construction in progress 6,304 - 236,410 - - (208,087) 34,627 15,934 5,903 - - (15,533) 6,304 - - - - - - - - - - - - -	Total 13,496,801 168,137 552,493 (3,181,435) (379,213) (270,131)
						10,386,652
						11,802,075 313,470 (387,877) 1,788,745 (19,612)
						13,496,801
						9,630,892 24,888 319,988 (3,162,923) (282,042) (200,021)
						6,330,782
						8,240,431 327,875 (319,855) 1,367,072 15,369
						9,630,892

(Continued)

49

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Carrying amounts: Balance at December 31, 2021 Balance at December 31, 2020	Land $ 1,562,830 $ 1,552,506	Buildings 1,342,421 1,353,695	Computer and communication equipment 526,684 304,877	Other equipment 589,308 648,527	Construction in progress 34,627 6,304	Total 4,055,870
						3,865,909

For certain land acquired, the ownership registration has not been transferred to the land acquirer, APDI, a subsidiary of the Company. To protect its interests, APDI has obtained signed deeds of assignment from the titleholders assigning all rights and obligations related to the land to APDI. Additionally, the land title certificates are held by APDI, and APDI has registered its liens thereon.

(i) Right-of-use assets

Cost: Balance at January 1, 2021 Acquisition through business combination Additions Disposals Effect of exchange rates changes Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Effect of exchange rates changes Balance at December 31, 2020 Accumulated depreciation: Balance at January 1, 2021 Acquisition through business combination Depreciation Disposals Effect of exchange rates changes Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposals Effect of exchange rates changes Balance at December 31, 2020 Carrying amount: Balance at December 31, 2021 Balance at December 31, 2020	Land $ 4,023 - 3,207 - (548) $ 6,682 $ 4,612 3,898 (4,610) 123 $ 4,023 $ 3,017 - 1,562 - (368) $ 4,211 $ 3,690 3,845 (4,610) 92 $ 3,017 $ 2,471 $ 1,006	Buildings 2,794,296 44,208 623,992 (449,297) (167,118) 2,846,081 2,456,713 609,300 (250,972) (20,745) 2,794,296 1,065,372 6,287 629,711 (433,365) (60,582) 1,207,423 615,604 666,786 (208,937) (8,081) 1,065,372 1,638,658 1,728,924	Other equipment 201,889 - 42,317 (36,876) (17,207) 190,123 157,328 96,808 (51,834) (413) 201,889 74,299 - 60,788 (33,015) (7,462) 94,610 51,016 64,744 (40,852) (609) 74,299 95,513 127,590	Total 3,000,208 44,208 669,516 (486,173) (184,873) 3,042,886 2,618,653 710,006 (307,416) (21,035) 3,000,208 1,142,688 6,287 692,061 (466,380) (68,412) 1,306,244 670,310 735,375 (254,399) (8,598) 1,142,688 1,736,642 1,857,520

(Continued)

50

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Investment property

Cost: Balance at January 1, 2021 Additions Disposals Reclassification from property, plant and equipment Balance at December 31, 2021 Balance at January 1, 2020 Additions Reclassification from property, plant and equipment Other reclassification Balance at December 31, 2020 Accumulated depreciation and impairment loss: Balance at January 1, 2021 Depreciation Disposals Reclassification from property, plant and equipment Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Reclassification from property, plant and equipment Other reclassification Balance at December 31, 2020 Carrying amounts: Balance at December 31, 2021 Balance at December 31, 2020 Fair value: Balance at December 31, 2021 Balance at December 31, 2020	Land $ 755,536 - (15,108) 122,442 $ 862,870 $ 1,154,429 - (441,384) 42,491 $ 755,536 $ 250,178 - - 41,210 $ 291,388 $ 429,034 - (178,856) - $ 250,178 $ 571,482 $ 505,358	Buildings Total 1,919,546 2,675,082 444 444 (5,524) (20,632) 256,771 379,213 2,171,237 3,034,107 3,252,324 4,406,753 14,415 14,415 (1,347,361) (1,788,745) 168 42,659 1,919,546 2,675,082 1,675,061 1,925,239 10,511 10,511 (3,276) (3,276) 240,832 282,042 1,923,128 2,214,516 2,848,369 3,277,403 14,906 14,906 (1,188,216) (1,367,072) 2 2 1,675,061 1,925,239 248,109 819,591 244,485 749,843 $ 1,250,794 $ 1,155,897

The fair value of the investment property is determined by referring to the market price of similar real estate transaction or the value in use of the investment property. The value in use is the present value of the future cash flows from continuous lease activities. On December 31, 2021 and 2020, the estimated discount rate used for calculating the present value of the future cash flows was 5.79% and 5.18%, respectively.

For certain land acquired, the ownership registration has not been transferred to the land acquirer, APDI, a subsidiary of the Company. To protect its interests, APDI has obtained signed deeds of assignment from the titleholders assigning all rights and obligations related to the land to APDI. Additionally, the land title certificates are held by APDI, and APDI has registered its liens thereon.

(Continued)

51

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Intangible assets

• (i) The movements of costs, and accumulated amortization and impairment loss of intangible assets were as follows:

Goodwill Net balance at January 1, 2021: Cost $ 23,893,960 Accumulated amortization and impairment loss (7,876,181) Net balance at January 1, 2021 16,017,779 Additions - Acquisition through business combination 233,816 Reclassification - Amortization - Effect of exchange rate changes (434,628) Net balance at December 31, 2021 $ 15,816,967 Net balance at December 31, 2021: Cost $ 23,466,809 Accumulated amortization and impairment loss (7,649,842) $ 15,816,967 Net balance at January 1, 2020: Cost $ 24,896,516 Accumulated amortization and impairment loss (8,299,165) Net balance at January 1, 2020 16,597,351 Additions - Disposals - Amortization - Effect of exchange rate changes (579,572) Net balance at December 31, $ 16,017,779 Net balance at December 31, : Cost $ 23,893,960 Accumulated amortization and impairment loss (7,876,181) $ 16,017,779	Trademarks and trade names 10,196,471 (10,196,053) 418 - 384 - (102) (29) 671 10,191,130 (10,190,459) 671 10,173,952 (10,173,475) 477 - - (59) - 418 10,196,471 (10,196,053) 418	Others 10,680,243 (10,405,711) 274,532 373,199 319,361 290 (252,093) (5,644) 709,645 10,855,175 (10,145,530) 709,645 10,764,512 (10,432,268) 332,244 217,927 (6,806) (269,442) 609 274,532 10,680,243 (10,405,711) 274,532	Total 44,770,674 (28,477,945) 16,292,729 373,199 553,561 290 (252,195) (440,301) 16,527,283 44,513,114 (27,985,831) 16,527,283 45,834,980 (28,904,908) 16,930,072 217,927 (6,806) (269,501) (578,963) 16,292,729 44,770,674 (28,477,945) 16,292,729

The amortization and impairment loss of intangible assets were included in the following line items of the statements of comprehensive income:

Cost of revenue Operating expenses	2021 $ 193,999 58,196 $ 252,195	2020
		203,412 66,089
		269,501

(Continued)

52

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (ii) Impairment test on goodwill and other intangible assets

The carrying amounts of goodwill arising from business combinations and the respective CGUs to which the goodwill was allocated for impairment test purpose were as follows:

Balance at January 1, 2021 Acquisition through business combination Effect of exchange rate changes Balance at December 31, 2021 Balance at January 1, 2020 Effect of exchange rate changes Balance at December 31, 2020	RO-EMEA $ 9,240,816 - (313,729) $ 8,927,087 $ 9,629,261 (388,445) $ 9,240,816	RO-PA 1,469,709 - (39,056) 1,430,653 1,546,007 (76,298) 1,469,709	RO-PAP 3,018,281 - (66,390) 2,951,891 3,147,343 (129,062) 3,018,281	RO-China 2,271,251 - (8,156) 2,263,095 2,257,018 14,233 2,271,251	Other CGUs without significant goodwill 17,722 233,816 (7,297) 244,241 17,722 - 17,722	Total 16,017,779 233,816 (434,628) 15,816,967 16,597,351 (579,572) 16,017,779

The recoverable amount of a CGU was determined based on the value in use, and the related key assumptions were as follows:

• 1) The cash flow projections were based on historical operating performance and future financial budgets, covering a period of 5 years, approved by management. Cash flows beyond that 5-year period have been extrapolated using zero growth rate.

• 2) Discount rates used to determine the value in use for each CGU were as follows:

December 31, 2021 December 31, 2020	RO-EMEA % 16.9 % 17.1	RO-PA % 13.5 % 9.6	RO-PAP RO-China % 19.2 % 20.3 % 18.5 % 21.4

The estimation of discount rate is based on the weighted-average cost of capital.

Based on the impairment assessments conducted in 2021 and 2020, no impairment losses were recognized as the recoverable amount of CGUs were higher than their carrying amounts.

(Continued)

53

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (l) Other current assets and other non-current assets

• (i) Other current assets

Overpaid VAT retained for offsetting against future tax payable Advance on procurement Other prepayments Right to goods to be returned Other financial assets Others	December 31, 2021 $ 1,861,817 264,014 494,004 332,990 80,000 31,675 $ 3,064,500	December 31, 2020 2,913,593 101,521 616,528 318,481 - 56,570 4,006,693

(ii) Other non-current assets

Overpaid VAT retained for offsetting against future tax payable Prepaid income tax Other prepayments Assets recognized from costs to fulfill contracts with customers Others	December 31, 2021 $ 1,141,805 1,524,891 37,862 168,997 69,511 $ 2,943,066	December 31, 2020 - 1,619,759 49,579 27,226 51,995 1,748,559

(m) Short-term borrowings

Short-term notes payable Unsecured bank loans Secured bank loans Unused credit facilities Interest rate	December 31, 2021 $ 99,994 1,127,830 25,766 $ 1,253,590 $ 32,391,741 0.70%~3.56%	December 31, 2020
		99,883 900,393 28,841
		1,029,117
		33,097,762
		0.89%~4.85%

Please refer to note 8 for a description of the Group’s assets pledged as collateral for bank loans.

(Continued)

54

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Long-term debt

term debt
Type of				December 31,		December 31,
Loan	Creditor	Credit Line	Term		2021	2020
Unsecured	Bank of Taiwan	The term tranche of	The interest is paid	$	-	3,300,000
loan		$4 billion may be	monthly starting
		withdrawn	September 2019. The
		separately.	principal will be repaid in
			lump sum amount when
			due in September 2022.
			Interest rate is adjusted
			quarterly. The principal
			was early repaid in May
			2021.
Unsecured					23,141	69,347
loan
Secured loan					96,785	43,868
					119,926	3,413,215
Less: current	portion of long-term debt				(20,106)	(18,113)
				$	99,820	3,395,102
Unused credit facilities				$	8,469,000	4,400,000
Interest rate					1.30%~3.36%	0.90%～3.43%

No financial covenants were required for the unsecured loan agreements with Bank of Taiwan. Please refer to note 6(aa) for related interest expense with respect to the abovementioned bank loans.

Please refer to note 8 for a description of the Group’s assets pledged as collateral for its bank loans.

(o) Bonds payable

Unsecured bonds payable	December 31, 2021 $ 10,000,000	December 31, 2020
		-

On April 27, 2021, the Company issued $5,000,000 of unsecured corprorate bonds at par value. The bonds have 5-year term and are repayable on maturity. The bonds bears annual coupon rate of 0.76% and interests are payable annually at coupon rate from the issuance date. On August 26, 2021, the Company issued $5,000,000 of unsecured corprorate bonds at par value. The bonds have 5-year term and are repayable in two equal installments on August 26, 2025 and on maturity. The bonds bears annual coupon rate of 0.62% and interests are payable annually at coupon rate from the issuance date.

(Continued)

55

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Lease liabilities

• (i) The carrying amount of lease liabilities were as follows:

The carrying amount of lease liabilities were as follows:
Current Non-current	December 31, 2021 $ 530,564 $ 1,320,713	December 31, 2020
		602,656
		1,353,697

Please refer to note 6(ac) for the maturity analysis of lease liabilities.

• (ii) The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Variable lease payments not included in the measurement of lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets	2021 $ 36,338 $ 56,516 $ 40,448 $ 3,492	2020
		44,364
		35,872
		21,815
		2,202

• (iii) The amounts recognized in the statement of cash flows for the Group were as follows:

Total cash outflow for leases	2021 $ 816,589	2020
		797,347

(iv) Major terms of leases

The Group leases land, buildings, vehicles, office equipment, and miscellaneous equipment with lease terms ranged from 1 to 30 years, some of which include options to extend the lease term after the end of the contract term. As certain leases of office and miscellaneous equipment meet the definition of short-term lease or lease of low-value assets, the Group elected to applied exemption and not to recognize right-of-use assets and lease liabilities.

(q) Provisions

Balance at January 1, 2021 Additions Amount utilized and reversed Effect of exchange rate changes Balance at December 31, 2021 Current Non-current	Warranties $ 5,492,122 4,639,198 (3,701,976) (348,754) $ 6,080,590 $ 5,893,893 186,697 $ 6,080,590	Litigation 254,386 42,679 (1,892) (12,480) 282,693 282,693 - 282,693	Restructuring 6,476 - (6,443) (33) - - - -	Environmental protection and others 228,281 146,486 (119,223) (15,518) 240,026 225,073 14,953 240,026	Total 5,981,265 4,828,363 (3,829,534) (376,785) 6,603,309 6,401,659 201,650 6,603,309

(Continued)

56

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance at January 1, 2020 Additions Amount utilized and reversed Effect of exchange rate changes Balance at December 31, 2020 Current Non-current	Warranties $ 4,520,180 5,029,285 (4,002,954) (54,389) $ 5,492,122 $ 5,492,122 - $ 5,492,122	Litigation 249,935 29,400 (14,524) (10,425) 254,386 253,039 1,347 254,386	Restructuring 33,255 - (26,622) (157) 6,476 6,476 - 6,476	Environmental protection and others 182,706 168,389 (124,788) 1,974 228,281 196,507 31,774 228,281	Total 4,986,076 5,227,074 (4,168,888) (62,997) 5,981,265 5,948,144 33,121 5,981,265

(i) Warranties

The provision for warranties is made based on the number of units sold currently under warranty, historical rates of warranty claim on those units, and cost per claim to satisfy the warranty obligation. The Group reviews the estimation basis on an ongoing basis and revises it when appropriate.

(ii) Litigation

Litigation provisions are recorded for pending litigation when it is determined that an unfavorable outcome is probable, and the amount of loss can be reasonably estimated.

(iii) Restructuring

One of subsidiaries underwent an operational optimization and organizational downsizing in response to the change of international trade environment and other factors and restructuring provision and cost was recognized accordingly. The provision was mainly for employee termination benefits and relocation costs of machinery equipment. The related expenses were reported in other expenses under operating expenses in the accompanying statements of comprehensive income.

(iv) Environmental protection and others

An environmental protection provision is made when products are sold and is estimated based on historical experience.

(r) Operating lease

The Group leases its investment and operating properties to others. The Group has classified these leases as operating leases as it does not transfer substantially all the risks and rewards incidental to ownership of the assets to lessees. Please refer to note 6(j) for the information of investment property.

(Continued)

57

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date, is as follows:

Less than 1 year 1 year to 2 years 2 years to 3 years 3 years to 4 years 4 years to 5 years Over 5 years Total undiscounted lease payments	December 31, 2021 $ 91,256 50,860 36,291 21,360 17,488 44,747 $ 262,002	December 31, 2020
		100,335 76,478 38,187 28,503 19,165 61,934
		324,602

In 2021 and 2020, the rental income from investment property amounting to $89,327 and $83,335, respectively, were recognized and included in other operating income and loss. Related repair and maintenance expenses recognized and included in operating expense were as follows:

Arising from investment property that generated rental income during the period Arising from investment property that did not generate rental income during the period	2021 $ 34,756 11,957 $ 46,713	2020
		40,879 25,798
		66,677

(s) Employee benefits

(i) Defined benefit plans

The reconciliation between the present value of defined benefit obligations and the net defined benefit liabilities (assets) for defined benefit plans was as follows:

Present value of benefit obligations Fair value of plan assets Net defined benefit liabilities (reported under other non- current liabilities) Present value of benefit obligations Fair value of plan assets Net defined benefit assets (reported under other non- current assets)	December 31, 2021 $ 2,980,785 (1,112,882) $ 1,867,903 December 31, 2021 $ 66,518 (115,826) $ (49,308)	December 31, 2020 3,111,815 (1,227,479) 1,884,336 December 31, 2020 100,571 (128,461) (27,890)

(Continued)

58

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Company and its domestic subsidiaries make defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pension benefits for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive a payment based on years of service and average salary for the six months prior to the employee’s retirement.

Foreign subsidiaries, including AJC, ATH, AIN, AMI, AIL, APHI, AEG, ASZ, AIT, ACF, ASIN, AEH, SER, AOJ, HSNI, HSNP and HSNT, also have defined benefit pension plans based on their respective local laws and regulations.

1) Composition of plan assets

The pension fund (the “Fund”) contributed by the Company and its domestic subsidiaries is managed and administered by the Bureau of Labor Funds of the Ministry of Labor (the Bureau of Labor Funds). According to the “ Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund”, with regard to the utilization of the Fund, minimum earnings shall be no less than the earnings attainable from twoyear time deposits with interest rates offered by local banks. The Company and its domestic subsidiaries also established pension funds in accordance with the “Regulations Governing the Management, Investment, and Distribution of the Employees’ Retirement Fund Established by a Profit-seeking Enterprise”, which are funded by time deposits and bank deposits deposited in the designated financial institutions. The administration of pension funds is separate from the Group, and the principal and interest from such funds shall not be used in any form except for the payment of pension and severance to employees.

Foreign subsidiaries with defined benefit pension plans make pension contributions to pension management institutions in accordance with their respective local regulations.

As of December 31, 2021 and 2020, the Group’ s fair value of plan assets, by major categories, was as follows:

Cash Equity instruments Instruments with fixed return Real estate	December 31, 2021 $ 466,440 444,883 85,958 231,427 $ 1,228,708	December 31, 2020
		580,991 430,772 105,047 239,130
		1,355,940

Cash includes the labor pension fund assets. For information on the domestic labor pension fund assets (including the asset portfolio and yield of the fund), please refer to the website of the Bureau of Labor Funds.

(Continued)

59

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Movements in present value of the defined benefit obligations

Defined benefit obligations at January 1 Current service costs Interest expense Remeasurement on the net defined benefit liabilities (assets): Actuarial loss (gain) arising from experience adjustments Actuarial loss (gain) arising from changes in demographic assumption Actuarial loss (gain) arising from changes in financial assumption Benefits paid by the Group and the plan Past service costs and settlement loss (gain) Settlement Contributions by plan participants Effect of exchange rate changes Defined benefit obligations at December 31 3) Movements in fair value of plan assets Fair value of plan assets at January 1 Interest income Remeasurement on the net defined benefit liabilities (assets): Return on plan assets (excluding amounts included in net interest expense) Benefits paid by the plan Contributions by plan participants Contributions by the employer Loss on curtailment Effect of exchange rate changes Fair value of plan assets at December 31	2021 $ 3,212,386 233,367 17,408 35,476 (58,786) 70,889 (189,572) (116,372) (54,505) 25,282 (128,270) $ 3,047,303 2021 $ 1,355,940 5,407 10,442 (174,285) 25,282 117,094 (64,367) (46,805) $ 1,228,708	2020 2,993,549 230,484 22,965 (15,264) (682) 13,143 (121,653) 4,067 - 5,093 80,684 3,212,386 2020 1,255,419 8,658 34,400 (105,028) 5,093 116,081 (8,089) 49,406 1,355,940

4) Changes in the effect of the asset ceiling

In 2021 and 2020, there was no effect of the asset ceiling.

(Continued)

60

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 5) Expenses recognized in profit or loss

Current service costs Net interest expense Past service costs and settlement loss (gain) Loss on curtailment Classified under cost of revenue Classified under operating expense	2021 $ 233,367 12,001 (116,372) 64,367 $ 193,363 $ 522 192,841 $ 193,363	2020
		230,484 14,307 4,067 8,089
		256,947
		530 256,417
		256,947

6) Actuarial assumptions

The principal assumptions of the actuarial valuation were as follows:

Discount rate Future salary increases rate	December 31, 2021 December 31, 2020 0.15%~6.94% 0.15%~7.00% 2.00%~6.00% 2.00%~6.00%

The weighted-average duration of the defined benefit plans ranges from 4 years to 26 years. The Group expects to make contribution of $107,573 to the defined benefit plans in the year following December 31, 2021.

7) Sensitivity analysis

When calculating the present value of the defined benefit obligations, the Group uses judgments and estimations to determine the actuarial assumptions for each measurement date, including discount rates and future salary changes. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligations.

The following table summarizes the impact of a change in the assumptions on the present value of the defined benefit obligation.

Discount rate Future salary change	December	31, 2021 0.25% Decrease 132,939 (50,329)	December 31, 2020	December 31, 2020
	0.25% Increase $ (118,564) $ 56,274		0.25% Increase (132,568) 63,285	0.25% Decrease 142,956
				(66,443)

The above sensitivity analysis considers the change in one assumption at a time, leaving the other assumptions unchanged. This approach shows the isolated effect of changing one individual assumption but does not take into account that some assumptions are interrelated. The method used to carry out the sensitivity analysis is consistent with the calculation of the net defined benefit liabilities recognized in the balance sheets. The method and assumptions used to carry out the sensitivity analysis is the same as in the prior year.

(Continued)

61

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Company and its domestic subsidiaries contribute monthly an amount equal to 6% of each employee’s monthly wages to the employee’s individual pension fund account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Group has no legal or constructive obligation to pay additional amounts after contributing a fixed amount to the Bureau of Labor Insurance. Foreign subsidiaries make contributions in compliance with their respective local regulations.

For the years ended December 31, 2021 and 2020, the Group recognized pension expenses of $378,604 and $321,798, respectively, in relation to the defined contribution plans.

(t)

Income taxes

• (i) Income tax returns of the Group are filed individually by each entity and not on a combined basis. The Company and its subsidiaries incorporated in the R.O.C. are subject to R.O.C. income tax at a rate of 20% for fiscal years 2021 and 2020. Foreign subsidiaries are subject to income tax in accordance with their respective local tax law and regulations. The components of income tax expense were as follows:

Current income tax expense Current period Adjustments for prior years Deferred tax expense Origination and reversal of temporary differences Change in unrecognized deductible temporary differences Income tax expense	2021 $ 3,709,640 538,476 4,248,116 (14,281) (85,503) (99,784) $ 4,148,332	2020 2,621,208 42,443 2,663,651 (592,711) 688,553 95,842 2,759,493

The components of income tax benefit (expense) recognized in other comprehensive income were as follows:

were as follows:
Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans	2021 $ 39,131	2020
		162

(Continued)

62

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Reconciliation between the expected income tax expense calculated based on the Company’s statutory tax rate and the actual income tax expense reported in the consolidated statements of comprehensive income was as follows:

Income before taxes Income tax using the Company’s statutory tax rate Effect of different tax rates in foreign jurisdictions Adjustments for prior-year income tax expense Change in unrecognized temporary differences and tax losses Others	2021 $ 15,435,645 $ 3,087,129 1,381,200 538,476 (85,503) (772,970) $ 4,148,332	2020
		8,905,103
		1,781,021 169,523 42,443 688,553 77,953
		2,759,493

• (ii) Deferred income tax assets and liabilities

• 1) Unrecognized deferred income tax assets

Tax losses Loss associated with investments in subsidiaries Deductible temporary differences	December 31, 2021 $ 3,635,014 2,337,741 3,774,575 $ 9,747,330	December 31, 2020
		4,439,009 2,591,465 3,287,129
		10,317,603

The above deferred income tax assets were not recognized as management believed that it is not probable that future taxable profits will be available against which the Group can utilize the benefits therefrom.

Each entity in the Group is entitled to use tax losses to offset future taxable income in accordance with the respective local tax regulations of each jurisdiction. As of December 31, 2021, the tax effects of unused tax losses and the respective expiry years were as follows:

Tax	effects of tax losses	Year of expiry
$	108,729	2022
	240,977	2023
	24,825	2024
	9,562	2025
	3,250,921	2026 and thereafter
$	3,635,014

(Continued)

63

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Unrecognized deferred income tax liabilities

December 31, 2021 Net profits associated with investments in subsidiaries$ 1,634,001	December 31, 2020
	2,118,771

The Group is able to control the timing of reversal of the temporary differences associated with investments in subsidiaries. As management believed that it is probable that the temporary differences will not reverse in the foreseeable future, such temporary differences were not recognized as deferred income tax liabilities.

• 3) Recognized deferred income tax assets and liabilities

Changes in the amount of deferred income tax assets and liabilities were as follows:

Deferred income tax assets:

Balance at January 1, 2021 Recognized in profit or loss Recognized in other comprehensive income Effect of exchange rate changes Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Effect of exchange rate changes Balance at December 31, 2020	Inventory $ 150,531 15,820 - - $ 166,351 $ 166,497 (15,966) - - $ 150,531	Accrued expenses and provisions 2,114,416 1,139,271 - - 3,253,687 1,156,264 958,152 - - 2,114,416	Unused tax loss carryforwards 38,640 2,434 - - 41,074 62,464 (23,824) - - 38,640	Others 177,189 30,976 39,131 (36,774) 210,522 166,570 14,956 162 (4,499) 177,189	Total 2,480,776 1,188,501 39,131 (36,774) 3,671,634 1,551,795 933,318 162 (4,499) 2,480,776

Deferred income tax liabilities:

Balance at January 1, 2021 Recognized in profit or loss Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020	Unremitted earnings from subsidiaries $ 2,927,543 905,285 $ 3,832,828 $ 2,104,835 822,708 $ 2,927,543	Unrealized foreign exchange gain on financial instruments 288,959 185,893 474,852 141,430 147,529 288,959	Intangible assets 300,750 (767) 299,983 244,406 56,344 300,750	Others 37,861 (1,694) 36,167 35,282 2,579 37,861	Total
					3,555,113 1,088,717
					4,643,830
					2,525,953 1,029,160
					3,555,113

(Continued)

64

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (iii) No income tax expense was recognized directly in equity in 2021 and 2020.

• (iv) The Company’s income tax returns for the years through 2019 were examined and approved by the R.O.C. income tax authorities.

• (u) Capital and other equity

• (i) Common stock

As of December 31, 2021 and 2020, the Company had issued 5,707 thousand units and 5,850 thousand units, respectively, of global depository receipts (GDRs). The GDRs were listed on the London Stock Exchange, and each GDR represents five common shares.

As of December 31, 2021 and 2020, the Company’ s authorized shares of common stock consisted of 4,000,000 thousand shares, of which 3,047,845 thousands shares were issued. The par value of the Company’s common stock is $10 per share. All issued shares were paid up upon issuance.

Certain shares of common stock were not outstanding as they were repurchased by the Company or held by the Company’s subsidiaries. The movements in outstanding shares of common stock were as follows (in thousands of shares):

common stock were as follows (in thousands of shares):
Balance at January 1 Repurchased and retirement of treasury stock Balance at December 31 (ii) Capital surplus Paid-in capital in excess of par value Surplus from mergers Surplus related to treasury stock transactions and cash dividend Difference between consideration and carrying amount of subsidiaries acquired or disposed Employee share options Surplus from equity-method investments		2021		2020 3,028,188 (27,080) 3,001,108 December 31, 2020 10,086,648 15,797,245 551,856 217,421 90,000 634,898 27,378,068
		3,001,108 -
		3,001,108
		December 31, 2021
	$ 10,086,648 15,797,245 621,975 247,301 90,000 671,100 $ 27,514,269

(Continued)

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ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Pursuant to the Company Act, any realized capital surplus is initially used to cover accumulated deficit, and the balance, if any, could be transferred to common stock as stock dividends or distributed by cash based on the original shareholding ratio. Realized capital surplus includes the premium derived from the issuance of shares of stock in excess of par value and donations received by the Company. In accordance with the “Regulations Governing the Offering and Issuance of Securities by Securities Issuers”, distribution of stock dividends from capital surplus in any one year shall not exceed 10% of paid-in capital.

(iii) Legal reserve, special reserve, and dividend policy

The Company’s Articles of Incorporation stipulate that at least 10% of annual net income, after deducting accumulated deficit, if any, must be retained as legal reserve until such retention equals the amount of paid-in capital. In addition, a special reserve shall be set aside in accordance with applicable laws and regulations. The remaining balance, together with the unappropriated earnings from the previous years, after retaining a certain portion of it for business considerations, can be distributed as dividends to stockholders. Except for the distribution of capital surplus and legal reserve in accordance with applicable laws and regulations, the Company cannot distribute any earnings when there are no retained earnings. The distributable dividends in whole or in part will be paid in cash by the Company after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

Since the Company operates in an industry experiencing rapid change and development, earnings are distributed in consideration of the current year’s earnings, the overall economic environment, related laws and decrees, and the Company’ s long-term development and stability in its financial position. The Company has adopted a stable dividend policy, in which a cash dividend comprises at least 10% of the total dividend distribution.

Additionally, pursuant to the Company Act, if the Company has no accumulated deficit, it may, pursuant to a resolution approved by the stockholders, distribute its legal reserve by issuing new shares or distributing cash for the portion of legal reserve which exceeds 25% of the paid-in capital.

In accordance with the rulings issued by the FSC, a special reserve shall be retained at an amount equal to the proportionate share of the carrying value of the treasury stock held by subsidiaries in excess of the market value at the reporting date. The special reserve may be reversed when the market value recovers in subsequent periods.

In accordance with the rulings issued by the FSC, a special reserve equal to the total amount of items that are accounted for as deductions from stockholders’ equity shall be set aside from current and prior-year earnings. This special reserve shall revert to retained earnings and be made available for distribution when the items that are accounted for as deductions from stockholders’ equity are reversed in subsequent periods.

(Continued)

66

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

On March 17, 2021, the Company’ s Board of Directors approved the distribution of cash dividends amounting to $4,571,781 ($1.5 per share), of which $70,119 was distributed to the subsidiaries holding the Company’ s common shares. Additionally, on July 9, 2021, the Company’ s shareholders approved an appropriation of legal reserve and special reserve of $602,575 and $857,485, respectively.

On March 18, 2020, the Company’s Board of Directors had approved the distribution of cash dividends amounting to $1,352,971 ($0.443909 per share), of which $20,809 was distributed to the subsidiaries holding the Company’s common shares. Additionally, on June 12, 2020, the Company’ s shareholders approved an appropriation of legal reserve and special reserve of $266,250 and $1,035,693, respectively, as well as the distribution of cash deriving from the capital surplus of $1,014,728 ($0.332932 per share), of which $15,607 was distributed to the subsidiaries holding the Company’s common shares.

On March 16, 2022, the Company’ s Board of Directors approved the distribution of cash dividends amounting to $6,949,107 ($2.28 per share), of which $106,582 was distributed to the subsidiaries holding the Company’s common shares.

Related information is available on the Market Observation Post System website of the Taiwan Stock Exchange.

(iv) Treasury stock

According to Article 28-2 of the Securities and Exchange Act, the Company purchased its own common shares of 27,080 thousand shares for an aggregate amount of $361,943 from March 13, 2020 to May 5, 2020 in order to maintain the Company’s credit and the shareholders’ eguity. All such treasury stock was retired on September 28, 2020 and related legal and registration procedures have been completed.

As of December 31, 2021 and 2020, details of the GDRs (for the implementation of an overseas employee stock option plan) held by subsidiary ASCBVI and the Company’ s common stock held by subsidiaries ASCBVI (to maintain the Company’ s shareholders’ equity), CCI (to maintain the Company’s shareholders’ equity), and ETEN (resulting from the acquisition of ETEN) were as follows (expressed in thousands of shares):

Common stock GDRs		December 31, 2021	December 31, 2021	December 31, 2021
		Number of shares	Carrying amount $ 945,239 1,969,617 $ 2,914,856	Market value
		21,809 24,937		664,084 704,324
		46,746		1,368,408

(Continued)

67

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Common stock GDRs		December 31, 2020	December 31, 2020	December 31, 2020
		Number of shares	Carrying amount $ 945,239 1,969,617 $ 2,914,856	Market value 515,783 639,821 1,155,604
		21,809 24,937
		46,746

According to the Securities and Exchange Act, treasury stock cannot be collateralized. In addition, treasury shares do not bear shareholder rights prior to being sold to third parties. Moreover, the number of treasury shares shall not exceed 10% of the number of common shares issued. The total amount of treasury stock shall not exceed the sum of retained earnings, paid-in capital in excess of par value, and other realized capital surplus.

• (v) Other equity items (net after tax)

• 1) Foreign currency translation differences:

Balance at January 1 Foreign exchange differences arising from translation of foreign operations Share of other comprehensive income (loss) of associates Changes in ownership interests in subsidiaries Balance at December 31	2021 $ (6,043,227) (2,767,945) 1,719 3,856 $ (8,805,597)	2020 (4,187,394) (1,854,068) (1,765) - (6,043,227)

• 2) Unrealized gain (loss) from financial assets measured at fair value through other comprehensive income:

Balance at January 1 Change in fair value of financial assets measured at fair value through other comprehensive income Net loss (gain) on disposal of financial assets measured at fair value through other comprehensive income Changes in ownership interests in subsidiaries Balance at December 31	2021 $ 768,662 (324,225) 308,290 (6,544) $ 746,183	2020
		133,070 632,065 3,527 -
		768,662

(Continued)

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ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Remeasurement of defined benefit plans:

Balance at January 1 Change in the period Share of other comprehensive income of associates Changes in ownership interests in subsidiaries Balance at December 31 (vi) Non-controlling interests (net after tax) Balance at January 1 Equity attributable to non-controlling interests: Net income for the year Changes in ownership interests in subsidiaries Acquisition and disposal of interests in subsidiaries Difference between consideration and carrying amount of subsidiaries acquired or disposed Stock option compensation cost of subsidairies Acquisition of subsidiaries Increase in non-controlling interests Reorganization under common control Cash dividends paid to non-controlling interests by subsidiaries Disposal of financial assets measured at fair value through other comprehensive income by subsidiaries Foreign currency translation differences Unrealized gain from financial assets measured at fair value through other comprehensive income Remeasurement of defined benefit plans Changes in equity of investments in associates Balance at December 31	2021 $ (242,887) 11,910 7 2,760 $ (228,210) 2021 $ 1,648,633 389,886 (60,177) 53,032 (29,880) 699 249,470 337,722 - (141,671) - (20,122) (34,492) (9,916) (36,957) $ 2,346,227	2020 (287,903) 44,999 17 - (242,887) 2020 1,353,766 116,323 (43,604) 301,669 (174,404) 71 - 135,581 12 (76,181) (5,357) 12,638 3,678 (7,634) 32,075 1,648,633

(Continued)

69

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Share-based payment

• (i) The Group’s additional share-based payment arrangements in 2021 and 2020 were as follows:

Type of arrangement WLII – Issuance of new shares reserved for employee subscription ALT –ESOPs AST – Issuance of new shares reserved for employee subscription	Grant Date 2021/3/17 2021/08/04 2020/11/19	Numbers of options granted (in thousands of shares) 1,174 882 265	Contract period Vesting period 2021/03/17~ 2021/03/19 2021/03/17~ 2021/03/19 2021/08/04~ 2021/11/30 2021/08/04~ 2021/11/15 2020/11/19~ 2020/12/15 2020/11/19~ 2020/12/15

The Group used the Black-Scholes Model in measuring the fair value of its employee stock options. The main inputs to the valuation model were as follows:

Fair value of options granted (NT$/ share) Fair value of stock at grant date (NT$/ share) Exercise price (NT$/ share) Expected volatility (%) Expected life (in years) Risk-free interest rate (%)	WLII – Issuance of new shares reserved for employee subscription	ALT– ESOPs AST – Issuance of new shares reserved for employee subscription 0.005013 0.68 7.41 56.38 10 60 25.05% 32.08% 0.2849 0.07 0.1092% 0.15%
	1.6 26.63 25 21.08% 0.0082 0.35%

Expected volatility was determined based on the vesting period and historical volatility of the comparable companies. The risk-free interest rate was determined based on government bonds.

• (ii) For the years ended December 31, 2021 and 2020, the compensation cost recognized for the abovemetioned share-based payment arrangements amounted to $1,704 and $181, respectively, which was reported in the operating expenses.

(Continued)

70

ACER INCORPORATED AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(w) Earnings per share (“EPS”)

(i) Basic earnings per share

The basic earnings per share were calculated as the earnings attributable to the shareholders of the Company divided by the weighted-average number of common shares outstanding as follows:

Net income attributable to the ordinary shareholders of the Parent Weighted-average number of ordinary shares outstanding (in thousands) Basic earnings per share (in New Taiwan dollars) (ii) Diluted earnings per share Net income attributable to the ordinary shareholders of the Parent Weighted-average number of ordinary shares outstanding (in thousands) Effect of dilutive potential common stock (in thousands): Effect of employee remuneration in stock Weighted-average shares of common stock outstanding (including effect of dilutive potential common stock)(in thousands) Diluted earnings per share (in New Taiwan dollars)	2021 $ 10,897,427 3,001,108 $ 3.63 2021 $ 10,897,427 3,001,108 27,180 3,028,288 $ 3.60	2020
		6,029,287
		3,006,934
		2.01
		2020
		6,029,287
		3,006,934 22,460
		3,029,394
		1.99

(x) Revenue from contracts with customers

(i) Disaggregation of revenue

Primary geographical markets: EMEA Pan America Asia Pacific		2021
	IT Hardware Products $ 106,690,873 84,105,680 90,843,802 $ 281,640,355	Others - - 37,365,101 37,365,101	Total
			106,690,873 84,105,680 128,208,903
			319,005,456

(Continued)

71

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Primary geographical markets: EMEA Pan America Asia Pacific (ii) Contract balances Notes and accounts receivable (including receivables from related parties) Less: loss allowance Contract assets－current Contract liabilities－current Contract liabilities－non-current	2020 IT Hardware Products Others $ 93,182,977 - 84,864,378 - 69,560,940 29,504,182 $ 247,608,295 29,504,182 December 31, 2021 December 31, 2020 $ 64,161,529 55,389,534 (120,763) (192,005) $ 64,040,766 55,197,529 $ 451,354 514,369 $ 2,455,504 2,269,409 $ 1,002,391 827,783		2020		Total 93,182,977 84,864,378 99,065,122 277,112,477 January 1, 2020 49,575,567 (136,322) 49,439,245 420,882 1,832,271 662,672

Please refer to note 6(d) for details on notes and accounts receivable and related loss allowance.

The major changes in the balance of contract assets and contract liabilities were due to the timing difference between the satisfaction of performance obligation and the receipt of customer’s payment.

The amount of revenue recognized in 2021 and 2020 that was included in the contract liability balance at January 1, 2021 and 2020, was $1,160,024 and $908,376, respectively.

(y) Remuneration to employees and directors

The Company’s Articles of Incorporation require that annual earning shall first be offset against any deficit, then, a minimum of 4% shall be allocated as employee remuneration and a maximum of 0.8% be allocated as directors’ remuneration. Employees who are entitled to receive the abovementioned employee remuneration, in share or cash, include the employees of subsidiaries of the Company who meet certain specific requirements.

(Continued)

72

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020, the Company accrued its remuneration to employees amounting to $720,000 and $480,000, respectively, and the remuneration for directors of $29,819 and $23,821, respectively. The said amounts, which were recognized as operating expenses, were calculated based on pre-tax net profit for each year before deducting the amount of the remuneration to employees and directors, multiplied by the proposed distribution ratio of remuneration to employees and directors.

Except that the remuneration to directors for 2021 resolved by the Company’s Board of Directors on March 16, 2022 was $12,000 and that for 2020 resolved by the Company's Board of Directors on March 17, 2021 was $10,013, the aforementioned accrued remunerations to employees were the same as the amounts resolved by the Board of Directors, which were all paid in cash. The difference between accrual and actual payment, amounting to $17,819 and $13,808 for 2021 and 2020, respectively, is treated as change in accounting estimate and recognized in profit or loss in the following year.

Related information is available on the Market Observation Post System website of Taiwan Stock Exchange.

• (z) Other operating income and expenses – net

Government grants Rental income	2021 $ 5,555 106,724 $ 112,279	2020
		133,403 95,370
		228,773

• (aa) Non-operating income and loss

Non-operating income and loss
(i) Interest income Interest income from bank deposits Other interest income (ii) Other income Dividend income	2021 298,794 20,151 $ 318,945 2021 $ 354,416	2020 315,460 - 315,460 2020 243,073
	$

(Continued)

73

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Other gains and losses Foreign currency exchange gain Gain (loss) on financial assets and liabilities measured at fair value through profit or loss Gain (loss) on disposal of equipment and intangible assets Gain on disposal of investment property Gain on disposal of investments accounted for using the equity method Gain on liquidation of subsidiaries and other investments Others (iv) Finance costs Interest expense from bank loans and corporate bonds Interest expense on lease liabilities Interest expense on cost of tax (ab) Financial instruments and fair value information (i) Categories of financial instruments 1) Financial assets Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets measured at amortized cost: Cash and cash equivalents Notes and accounts receivable and other receivables (including receivables from related parties) Other financial assets – current (included in other current assets) Other financial assets – non-current

2021 2020 $ 398,307 1,558,854 346,083 (2,132,504) (8,252) 2,713 1,141 - 47,815 - 3,068 902 79,511 132,556 $ 867,673 (437,479) 2021 2020 $ 93,167 110,937 36,338 44,364 207,172 - $ 336,677 155,301 December 31, 2021 December 31, 2020 $ 3,222,868 5,841,103 7,806,702 6,208,410 44,619,541 39,181,023 64,546,680 55,745,545 80,000 - 1,195,156 1,058,956 $ 121,470,947 108,035,037

(Continued)

74

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Financial liabilities

Financial liabilities measured at fair value through profit or loss Financial liabilities measured at amortized cost: Short-term borrowings Notes and accounts payable Other payables Lease liabilities (including current and non- current) Bonds payable Long-term debt (including current portion)	December 31, 2021 $ 294,983 1,253,590 57,897,697 37,249,145 1,851,277 10,000,000 119,926 $ 108,666,618	December 31, 2020
		1,526,494 1,029,117 49,405,634 29,810,924 1,956,353 - 3,413,215
		87,141,737

• (ii) Fair value information

• 1) Financial instruments not measured at fair value

The Group considers that the carrying amounts of financial assets and financial liabilities measured at amortized cost approximate their fair values.

• 2) Financial instruments measured at fair value

The following financial instruments are measured at fair value on a recurring basis.

The table below analyzes the financial instruments measured at fair value subsequent to initial recognition, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. The different levels have been defined as follows:

• a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• b) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

• c) Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

(Continued)

75

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets mandatorily measured at fair value through profit or loss: Foreign currency forward contracts Stocks listed on foreign markets Funds Financial assets measured at fair value through other comprehensive income: Domestic listed stock Unlisted stock Financial liabilities measured at fair value through profit or loss: Foreign currency forward contracts Contingent consideration arising from business combinations Financial assets mandatorily measured at fair value through profit or loss: Foreign currency forward contracts Stocks listed on foreign markets Funds Financial assets measured at fair value through other comprehensive income: Domestic listed stock Unlisted stock Financial liabilities measured at fair value through profit or loss: Foreign currency forward contracts			December 31, 2021	December 31, 2021	Total 680,128 1,754 2,540,986 3,222,868 7,064,857 741,845 7,806,702 (259,225) (35,758) (294,983) Total 203,213 2,160 5,635,730 5,841,103 5,096,859 1,111,551 6,208,410 (1,526,494) (1,526,494)
			Fair value
	Level 1 $ - 1,754 2,540,986 $ 2,542,740 $ 7,064,857 - $ 7,064,857 $ - - -		Level 2 680,128 - - 680,128 - - - (259,225) - (259,225) December	Level 3 - - - - - 741,845 741,845 - (35,758) (35,758) 31, 2020
			Fair value
			Level 2 203,213 - - 203,213 - - - (1,526,494) (1,526,494)	Level 3 - - - - - 1,111,551 1,111,551 - -

There were no transfers among fair value hierarchies for the years ended December 31, 2021 and 2020.

(Continued)

76

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 3) Movement in financial assets included in Level 3 fair value hierarchy

Balance at January 1 Total gains or losses: Recognized in other comprehensive income Additions Disposals Effect of exchange rate changes Balance at December 31	2021 Financial liabilities measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income $ - 1,111,551 - (295,230) (35,758) 42,305 - (99,122) - (17,659) $ (35,758) 741,845	2020 Financial assets measured at fair value through other comprehensive income 1,304,346 (158,042) 17,421 (11,966) (40,208) 1,111,551
	Financial liabilities measured at fair value through profit or loss $ - - (35,758) - - $ (35,758)

The abovementioned total gains or losses were included in “other gains and losses” and “ unrealized gain (loss) from financial assets measured at fair value through other comprehensive income” , respectively. The gains or losses attributable to the financial assets held on December 31, 2021 and 2020 were as follows:

2021 Total gains or losses: Recognized in other comprehensive income (included in “unrealized gain (loss) from financial assets measured at fair value through other comprehensive income”) $ (3,193)	2020 (158,042)

• 4) Valuation techniques and inputs used for financial instruments measured at fair value

• a) The fair values of financial assets with standard terms and conditions and traded on active markets are determined with reference to quoted market prices (e.g., listed stocks).

• b) The fair value of derivative financial instruments is determined using a valuation technique, with estimates and assumptions consistent with those used by market participants that are readily available to the Group. The fair value of foreign currency forward contracts and foreign currency option contracts is computed individually by each contract using the valuation technique.

• c) The fair value of unlisted stocks in Level 3 fair value hierarchy is estimated by using the market approach and is determined by reference to recent financing activities, valuations of similar companies, market conditions, and other economic indicators. The fair value of financial liabilities measured at fair value through profit or loss (contingent consideration arising from business combinations) is determined based on the discounted cash flow model.

(Continued)

77

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 5) Quantitative information of significant unobservable inputs

Valuation Significant unobservable Item technique inputs Financial assets Comparable Discount for lack of measured at fair value company marketability through other valuation (10%~30%) comprehensive income Financial liabilities Discounted cash Discount rate measured at fair value flow model (10.10% at December through profit or loss - 31, 2021) Contingent consideration arising from business combinations

Interrelationship between significant unobservable inputs and fair value measurement

The estimated fair value would decrease if the discount for lack of marketability was higher

The estimated fair value would increase if the discount rate was lower

• －

• 6) Fair value measurements in Level 3 sensitivity analysis of reasonably possible alternative assumptions

The Group’ s measurement on the fair value of financial instruments may change if different valuation models or inputs are used. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on other comprehensive income:

December 31, 2021 Financial assets measured at fair value through other comprehensive income Equity investments without an active market Financial liabilities measured at fair value through profit or loss: Contingent consideration arising from business combinations December 31, 2020 Financial assets measured at fair value through other comprehensive income Equity investments without an active market	Input Discount for lack of marketability Discount rate Discount for lack of marketability	Change in assumptions 1% 0.5% 1%	Net income or loss for current period	Net income or loss for current period	Other comprehensive income Favorable Unfavorable 4,316 (4,316) - - 9,584 (9,584)
			Favorable - 28 -	Unfavorable
				- 83 -

(Continued)

78

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The favorable and unfavorable effects represent the changes in fair value, which is based on a variety of unobservable inputs calculated using a valuation technique. If the fair value of a financial instrument is subject to more than one inputs, the analysis above reflects only the effects of changes in a single input and does not include the interrelationship with another inputs.

• (iii) Offsetting of financial assets and financial liabilities

The Group has financial instrument transactions which are set off in accordance with paragraph 42 of IAS 32; the related financial assets and liabilities are presented in the balance sheets on a net basis.

The table below summarizes the related information of offsetting of financial assets and liabilities:

			December 31, 2021	December 31, 2021
Financial assets		subject to offsetting, enforceable master netting			arrangements or similar agreements
			Gross amounts
		Gross	of recognized
		amounts of	financial	Net amount of
		recognized	liabilities offset	financial assets
		financial	in the balance	presented in the	Amounts not offset in the
		assets	sheet	balance sheet	balance sheet (d)		Net amount
					Financial	Cash collateral
		(a)	(b)	(c)=(a)-(b)	instruments	received	(e)=(c)-(d)
Notes and accounts
receivable, net	**$ **	108,372,011	44,332,574	64,039,437	-	-	64,039,437
			December 31, 2021
Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements
		Gross	Gross amounts	Net amount of
		amounts of	of recognized	financial
		recognized	financial assets	liabilities
		financial	offset in the	presented in the	Amounts not offset in the
		liabilities	balance sheet	balance sheet	balance sheet (d)		Net amount
					Financial	Cash collateral
		(a)	(b)	(c)=(a)-(b)	instruments	received	(e)=(c)-(d)
Notes and accounts
payable	**$ **	102,230,271	44,332,574	57,897,697	-	-	57,897,697
			December 31, 2020
Financial assets		subject to offsetting, enforceable master netting			arrangements or similar agreements
			Gross amounts
		Gross	of recognized
		amounts of	financial	Net amount of
		recognized	liabilities offset	financial assets
		financial	in the balance	presented in the	Amounts not offset in the
		assets	sheet	balance sheet	balance sheet (d)		Net amount
					Financial	Cash collateral
		(a)	(b)	(c)=(a)-(b)	instruments	received	(e)=(c)-(d)
Notes and accounts
receivable, net	$	95,427,457	40,257,347	55,170,110	-	-	55,170,110

(Continued)

79

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020 Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements Gross amounts of recognized financial liabilities Gross amounts of recognized financial assets offset in the balance sheet Net amount of financial liabilities presented in the balance sheet Amounts not offset in the balance sheet (d) Net amount (a) (b) (c)=(a)-(b) Financial instruments Cash collateral received (e)=(c)-(d) Notes and accounts payable $ 89,662,981 40,257,347 49,405,634 - - 49,405,634	December 31, 2020 Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements Gross amounts of recognized financial liabilities Gross amounts of recognized financial assets offset in the balance sheet Net amount of financial liabilities presented in the balance sheet Amounts not offset in the balance sheet (d) Net amount (a) (b) (c)=(a)-(b) Financial instruments Cash collateral received (e)=(c)-(d) Notes and accounts payable $ 89,662,981 40,257,347 49,405,634 - - 49,405,634	December 31, 2020 Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements Gross amounts of recognized financial liabilities Gross amounts of recognized financial assets offset in the balance sheet Net amount of financial liabilities presented in the balance sheet Amounts not offset in the balance sheet (d) Net amount (a) (b) (c)=(a)-(b) Financial instruments Cash collateral received (e)=(c)-(d) Notes and accounts payable $ 89,662,981 40,257,347 49,405,634 - - 49,405,634	December 31, 2020 Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements Gross amounts of recognized financial liabilities Gross amounts of recognized financial assets offset in the balance sheet Net amount of financial liabilities presented in the balance sheet Amounts not offset in the balance sheet (d) Net amount (a) (b) (c)=(a)-(b) Financial instruments Cash collateral received (e)=(c)-(d) Notes and accounts payable $ 89,662,981 40,257,347 49,405,634 - - 49,405,634	December 31, 2020 Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements Gross amounts of recognized financial liabilities Gross amounts of recognized financial assets offset in the balance sheet Net amount of financial liabilities presented in the balance sheet Amounts not offset in the balance sheet (d) Net amount (a) (b) (c)=(a)-(b) Financial instruments Cash collateral received (e)=(c)-(d) Notes and accounts payable $ 89,662,981 40,257,347 49,405,634 - - 49,405,634
Notes and accounts payable	Gross amounts of recognized financial liabilities (a) $ 89,662,981	Gross amounts of recognized financial assets offset in the balance sheet Net amount of financial liabilities presented in the balance sheet (b) (c)=(a)-(b) 40,257,347 49,405,634	Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
			Financial instruments -
				49,405,634

• (ac) Financial risk management

The Group is exposed to credit risk, liquidity risk, and market risk (including currency risk, interest rate risk, and other market price risk). The Group has disclosed the information on exposure to the aforementioned risks and the Group’s policies and procedures to measure and manage those risks as well as the quantitative information below.

The Board of Directors are responsible for developing and monitoring the Group’s risk management policies. The Group’ s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor adherence to the controls. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s operations.

The Group’ s management monitors and reviews the financial activities in accordance with procedures required by relevant regulations and internal controls. Internal auditors undertake reviews of risk management controls and procedures, and the results of which are reported to the Board of Directors on a regular basis.

(i) Credit risk

• 1) The maximum exposure to credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty of a financial instrument fails to meet its contractual obligations, and arises principally from the Group’ s cash and cash equivalents, derivative instruments, receivables from customers, other receivables and time deposit. The maximum exposure to credit risk is equal to the carrying amount of the Group’s financial assets.

• 2) Concentration of credit risk

The Group primarily sells and markets its multi-branded IT products through distributors in different geographic areas. The Group believes that there is no significant concentration of credit risk due to the Group’s large number of customers and their wide geographical spread.

(Continued)

80

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Credit risk from receivables

Please refer to note 6(d) for credit risk exposure of notes and accounts receivable. Other financial assets measured at amortized cost include other receivables and time deposits (classified as other financial assets). Abovementioned financial assets are considered low-credit-risk financial assets, and thus, the loss allowance is measured using 12-months ECL. Please refer to note 4(g) for descriptions about how the Group determines the credit risk. As of December 31, 2021 and 2020, except for other receivables amounting to $40,291 and $40,996, respectively, for which the loss allowance was fully provided, no loss allowance was provided for the remaining receivables after management’s assessment.

(ii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in settling its financial liabilities by delivering cash or another financial assets. The Group manages liquidity risk by monitoring regularly the current and mid- to long-term cash demand, maintaining adequate cash and banking facilities, and ensuring compliance with the terms of the loan agreements. As of December 31, 2021 and 2020, the Group had unused credit facilities of $40,860,741 and $37,497,762, respectively.

The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments, including principal and estimated interest.

December 31, 2021 Non-derivative financial liabilities: Short-term borrowings carrying floating interest rates Long-term debt carrying floating interest rates Bonds payable carrying fixed interest rates Notes and accounts payable Other payables Lease liability Derivative financial instruments: Foreign currency forward contracts－settled in gross: Outflow Inflow	Contractual cash flows $ 1,256,984 125,834 10,329,500 57,897,697 37,249,145 1,935,847 $ 108,795,007 $ 78,556,507 (78,866,935) $ (310,428)	Within 1 year 1,256,984 23,666 69,000 57,897,697 34,899,022 558,646 94,705,015 78,556,507 (78,866,935) (310,428)	1-2 years - 70,789 69,000 - 2,330,465 396,855 2,867,109 - - -	2-5 years - 31,379 10,191,500 - 19,658 667,616 10,910,153 - - -	Over 5 years - - - - - 312,730
					312,730
					- -
					-

(Continued)

81

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020 Non-derivative financial liabilities: Short-term borrowings carrying floating interest rates Long-term debt carrying floating interest rates Notes and accounts payable Other payables Lease liability Derivative financial instruments: Foreign currency forward contracts－settled in gross: Outflow Inflow	Contractual cash flows $ 1,029,985 3,469,242 49,405,634 29,810,924 2,056,634 $ 85,772,419 $ 80,301,700 (78,941,067) $ 1,360,633	Within 1 year 1,029,985 50,220 49,405,634 27,696,792 636,765 78,819,396 80,301,700 (78,941,067) 1,360,633	1-2 years - 3,341,025 - 2,094,176 400,249 5,835,450 - - -	2-5 years - 77,997 - 19,956 589,440 687,393 - - -	Over 5 years - - - - 430,180
					430,180
					- -
					-

The Group does not expect that the cash flows included in the maturity analysis would occur significantly earlier or at significantly different amounts.

(iii) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, and will affect the Group’ s income or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Group utilizes derivative financial instruments to manage market risk and the volatility of profit or loss. All such transactions are carried out within the guidelines set by the Board of Directors.

1) Foreign currency risk

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of the Group entities. The foreign currencies used in these transactions are mainly the Euro (EUR), US dollar (USD), Indian Rupee (INR), Polish Zloty (PLN), Japanese Yen (JPY), Australian dollar (AUD), Russian Ruble (RUB), Great British Pound (GBP), etc.

The Group utilizes foreign currency forward contracts to hedge its foreign currency exposure with respect to its forecast sales and purchases over the following 12 months.

(Continued)

82

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

a) Exposure to foreign currency risk and sensitivity analysis

The Group’ s exposure to foreign currency risk arises from cash and cash equivalents, notes and accounts receivable/payable (including related parties), and other receivables/payables (including related parties) that are denominated in foreign currencies. At the reporting date, the carrying amounts of the Group’ s significant monetary assets and liabilities denominated in a currency other than the respective functional currencies of the Group entities and their sensitivity analysis were as follows (including the monetary items that have been eliminated in the accompanying consolidated financial statements):

(in thousands)

Financial assets Monetary items EUR USD INR PLN AUD RUB GBP Financial liabilities Monetary items EUR PLN USD		December 31, 2021	December 31, 2021	December 31, 2021
	Foreign currency $ 224,369 1,998,391 13,403,716 558,313 115,401 6,058,373 64,040 34,702 272,598 2,926,973	Exchange rate 31.4835 27.6900 0.3725 6.8621 20.1112 0.3708 37.4701 31.4835 6.8621 27.6900	NTD 7,063,921 55,335,447 4,992,884 3,831,200 2,320,853 2,246,445 2,399,585 1,092,540 1,870,595 81,047,882	Change in magnitude Pre-tax effect on profit or loss % 1 70,639 % 1 553,354 % 1 49,929 % 1 38,312 % 1 23,209 % 1 22,464 % 1 23,996 % 1 10,925 % 1 18,706 % 1 810,479

(in thousands)

Financial assets Monetary items EUR USD INR JPY PLN GBP Financial liabilities Monetary items PLN USD		December 31, 2020	December 31, 2020	December 31, 2020
	Foreign currency $ 71,197 1,467,653 7,102,905 14,083,740 301,547 55,336 152,423 2,279,170	Exchange rate 34.8254 28.5080 0.3902 0.2761 7.6361 38.9704 7.6361 28.5080	NTD 2,479,464 41,839,852 2,771,554 3,888,521 2,302,643 2,156,466 1,163,917 64,974,578	Change in magnitude Pre-tax effect on profit or loss % 1 24,795 % 1 418,399 % 1 27,716 % 1 38,885 % 1 23,026 % 1 21,565 % 1 11,639 % 1 649,746

(Continued)

83

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

With varieties of functional currencies within the consolidated entities of the Group, the Group disclosed net realized and unrealized foreign exchange gain (loss) on monetary items in aggregate. Please refer to note 6(aa) for further information.

2) Interest rate risk

The Group’s short-term borrowings and long-term debt carry floating interest rates, and the Group has not entered into interest rate swap contracts to convert floating interest rates to fixed interest rates. To manage the interest rate risk, the Group periodically assesses the interest rates of bank loans and maintains good relationships with financial institutions to obtain lower financing costs. The Group also strengthens the management of working capital to reduce the dependence on bank loans as well as the risk arising from fluctuation of interest rates.

The following sensitivity analysis is based on the risk exposure to floating-interest-rate liabilities on the reporting date. The sensitivity analysis assumes the liabilities recorded at the reporting date had been outstanding for the entire period. The change in interest rate reported to the key management in the Group is based on 100 basis points (1%), which is consistent with the assessment made by the key management in respect of the possible change in interest rate.

If the interest rate had been 100 basis points (1%) higher/lower with all other variables held constant, pre-tax income for the years ended December 31, 2021 and 2020 would have been $13,735 and $44,423, respectively, lower/higher, which mainly resulted from the borrowings with floating interest rates.

3)

Other market price risk

The Group is exposed to the risk of price fluctuation in securities resulting from its investment in publicly traded stocks. The Group supervises the equity price risk actively and manages the risk based on fair value. The Group also has strategic investments in privately held stocks, in which the Group does not actively participate in their trading.

Assuming a hypothetical increase or decrease of 5% in equity prices of the equity investments at each reporting date, the other comprehensive income for the years ended December 31, 2021 and 2020, would have increased or decreased by $390,335 and $310,421, respectively.

(Continued)

84

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ad) Capital management

In consideration of the industry dynamics and future developments, as well as external environment factors, the Group maintains an optimal capital structure to enhance long-term shareholder value by managing its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, research and development activities, dividend payments, and other business requirements for continuing operations and to reward shareholders and take into consideration the interests of other stakeholders.

• (ae) Investing and financing activities not affecting cash flows

• (i) Please refer to note 6(i) for a description of acquisition of right-of-use assets through leases in 2021 and 2020.

• (ii) The reconciliation of liabilities arising from financing activities were as follows:

						Non-cash changes	Non-cash changes	Non-cash changes
								Fluctuation
								of foreign
	January 1,				Movement		Business	exchange	December 31,
		2021	Cash flows		of	leases	merger	rate	2021
Long-term debt	$	3,413,215	(3,284,980)			-	-	(8,309)	119,926
Short-term borrowings		1,029,117		(593,550)		-	827,287	(9,264)	1,253,590
Lease liabilities		1,956,353		(679,795)		649,723	38,331	(113,335)	1,851,277
Bonds payable		-	10,000,000			-	-	-	10,000,000
Total liabilities from
financing activities	**$ **	6,398,685		5,441,675		649,723	865,618	(130,908)	13,224,793
							Non-cash	changes
								Fluctuation of
		January 1,				Movement of		foreign	December 31,
		2020		Cash flows			leases	exchange rate	2020
Long-term debt	$	5,843,815		(2,435,290)			-	4,690	3,413,215
Short-term borrowings		1,505,587		(404,100)			-	(72,370)	1,029,117
Lease liabilities		2,008,007		(693,094)			659,557	(18,117)	1,956,353
Total liabilities from
financing activities	$	9,357,409		(3,532,484)			659,557	(85,797)	6,398,685

(Continued)

85

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

7. Related-party transactions

• (a) Related party name and categories

The followings are related parties that have had transactions with the Group during the reporting periods:

followings are related parties that have ds:	had transactions with the Group during the reportin
Name of related party	Relationship with the Group
Aegis Semiconductor Technology Inc.	Associates, liquidated on August 26th, 2021
GrandPad Inc.	Associates
Piovision International Inc.	Associates
ECOM Software Inc.	Associates
Kbest Technology Inc.	Associates
Meldcx Pty Ltd. (MPL)	Associates, before August 30th, 2021 (note)
Meldcx USA Inc.	Associates, before August 30th, 2021 (note)
Apex Material Technology Corp.	Associates
Antung Trading Corporation	Associates
Smart Frequency Technology Inc.	Joint venture
Other Related Parties:
Erics Co., LTD	The entity’s chairman is the first-degree relatives
	of one of the key management of the Group
Acer Foundation	Substantive related party
Taurus Insterstellar Inc.	The entity’s chairman is the Company's director
Mu-Jin Investment Co., Ltd	Same chairman with the Group

Note:AOI donated partial of its ownership interest in MPL, formerly an investment accounted for using the equity method, to Acer Foundation on August 30, 2021. Consequently, AOI’ s ownership interest in MPL decreased from 27.21% to 17.21% and lost significant influence over it. Therefore, AOI reclassified its investment to fair value through other comprehensive － income (FVOCI) non-current since then.

(Continued)

86

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Significant related-party transactions

(i) Revenue

The amounts of significant sales to related parties were as follows:

Associates Joint venture Other related parties	2021 $ 137,848 96 229 $ 138,173	2020
		244,408 896 6,041 251,345

The sales prices with related parties are not comparable to those with third-party customers due to different product specifications. The credit terms ranged from 30 to 120 days, which were not significantly different from those with third-party customers. Receivables from related parties were uncollateralized.

(ii) Purchases

The amounts of significant purchases from related parties were as follows:

Associates	2021 $ 2,693	2020
		2,324

The purchase price with related parties are not comparable to the purchase price with thirdparty vendors as the specifications of products are different.

(iii) Operating expenses

The operating expenses related to the system maintenance service provided by related parties and the donation to related parties were as follows:

Account Related-party categories 2021 Operating expense Associates $ 1,745 Operating expense Other related parties - Other gians and losses Other related parties 11,911 $ 13,656	2020
	6,225 12,500 -
	18,725

(Continued)

87

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Lease

The Group leased its investment property and offices to related parties. The related rental － income was included in “other operating income and expenses net” and was summarized as follows:

follows:
Associates Joint venture Other related parties	2021 $ 2,623 2,584 83 $ 5,290	2020
		2,491 1,668 78
		4,237

(v) Service income

The service income related to the management consulting service provided to related parties was included in “other gains and losses” and was summarized as follows:

Associates Joint venture Other related parties	2021 $ 48 3,223 165 $ 3,436	2020
		48 3,223 19
		3,290

(vi) Receivables from related parties

The receivables from related parties were as follows:

Account Accounts receivable Accounts receivable Accounts receivable Other receivables Other receivables Other receivables	Related-party categories December 31, 2021 Associates $ 1,221 Joint venture 92 Other related parties 16 Associates 10 Joint venture 294 Other related parties 173 $ 1,806	December 31, 2020
		27,316 103 - 4,678 297 20
		32,414

(Continued)

88

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vii) Payables to related parties

The payables to related parties were as follows:

Account Accounts payable Other payables Other payables	Related party categories Associates Associates Other related parties	December 31, 2021 $ 89 - 12,500 $ 12,589	December 31, 2020
			144 936 25,000
			26,080

(c) Compensation for key management personnel

Short-term employee benefits Post-employment benefits	2021 $ 540,826 7,905 $ 548,731	2020
		426,431 24,440
		450,871

8. Pledged assets

The carrying values of pledged assets were as follows:

Assets	Pledged to secure Contract bidding, security for letters of credit, project fulfillment, import tariffs, lease guarantee, etc. Short-term and long-term loans	December 31, 2021 $ 1,126,674 824,536 $ 1,951,210	December 31, 2020
Cash in bank, time deposits and refundable deposits (reported under other financial assets－ non-current) Bluechip’s assets			1,009,030 788,964
			1,797,994

(Continued)

89

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

9. Significant commitments and contingencies

• (a) The Company has entered into software and royalty license agreements with Microsoft, IBM, and other companies. The Company has fulfilled its obligations according to the contracts.

• (b) An American company has filed a lawsuit against Acer for violating confidential agreement and trade secret. The Group had appointed outside counsel to handle the case. The lawsuit is still in progress. However, the Group has recognized the litigation provisions based on the development of the aforesaid lawsuit. The management foresees no immediate material adverse effect on the Group’ s business operations and finance.

• (c) In the ordinary course of its business from time to time, the Group received notices from third parties asserting that Acer has infringed certain patents and demanded that Acer should obtain certain patent licenses. Although the Group does not expect that the outcome of any of these legal proceedings (individually or collectively) will have a material adverse effect on the Group’s business operations and finance, the litigation is inherently unpredictable. Therefore, the Group could incur judgments or enter into settlements of claims that could adversely affect its operating results or cash flows in a particular period.

• (d) The Group faces various taxation challenges around the world due to rapid changes in international tax environment. The Group held different position with various local tax authorities for certain tax audits and has provided the accruals for the cases (including but not limited to income taxes, withholding taxes and business taxes) that met the criteria for recognizing a provision. Nevertheless, the tax disputes are inherently complicated and may take years to be approved by the tax authorities. The ultimate result is unpredictable and could adversely affect the Group’s operating results or cash flows in a particular period.

• (e) As of December 31, 2021 and 2020, the Company had outstanding stand-by letters of credit provided by the banks totaling $6,720 and $14,227, respectively, for purposes of bids and contracts.

• (f) As of December 31, 2021 and 2020, the Group had issued promissory notes amounting to $40,314,183 and $39,557,254, respectively, as collateral for obtaining credit facilities from financial institutions.

10. Significant loss from disaster: None

11. Significant subsequent events:

The Group was exposed to the risk of recoverability of accounts receivables from customers in Russia and Ukraine due to the conflict between Russia and Ukraine occurred in the end of February 2022. As of March 16, 2022, the exposure of accounts receivable arising from revenue recognized in 2021 amounted to $1,032,000 approximately. The Group initially assessed that some of such accounts receivable might be impaired as they might not be recovered. The Group has proactively managed to ensure the abovementioned accounts receivable will be collected, and evaluated any ways to reduce the potential impairment loss such as insurance claim and other safeguard actions. The impairment loss of accounts receivable could not be estimated certainly at this stage as the conflict situation is still evolving. The impairment loss of accounts receivable in respect of the above-mentioned conflict, if any, will be recognized in 2022.

(Continued)

90

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

12. Others

• (a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
		2021		2020
	Cost of revenue	Operating expenses	Total	Cost of revenue	Operating expenses	Total
Employee benefits: Salaries Insurance Pension Others Depreciation Amortization	1,276,896 188,775 34,213 109,360 188,272 428,323	10,911,880 1,042,580 537,754 799,820 834,288 64,347	12,188,776 1,231,355 571,967 909,180 1,022,560 492,670	1,123,968 163,768 33,894 74,762 173,810 503,095	9,421,925 987,142 544,851 761,920 904,346 70,497	10,545,893 1,150,910 578,745 836,682 1,078,156 573,592

13. Additional disclosures

• (a) Information on significant transactions:

• (i) Financing provided to other parties: See Table 1 attached;

• (ii) Guarantees and endorsements provided to other parties: See Table 2 attached;

• (iii) Marketable securities held at reporting date (excluding investments in subsidiaries, associates, and jointly controlled entities): See Table 3 attached;

• (iv) Marketable securities for which the accumulated purchase or sale amounts for the period exceed $300 million or 20% of the paid-in capital: See Table 4 attached;

• (v) Acquisition of real estate at costs which exceeds $300 million or 20% of the paid-in capital: None;

• (vi) Disposal of real estate at prices which exceeds $300 million or 20% of the paid-in capital: None;

• (vii) Total purchases from and sales to related parties which exceed $100 million or 20% of the paid-in capital: See Table 5 attached;

• (viii) Receivables from related parties which exceed $100 million or 20% of the paid-in capital: See Table 6 attached;

• (ix) Information about derivative instruments transactions: See notes 6(b);

• (x) Business relationships and significant intercompany transactions: See Table 7 attached;

• (b) Information on investees: See Table 8 attached;

(Continued)

91

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (c) Information on investment in Mainland China:

• (i) The names of investees in Mainland China, the main businesses and products, paid-in capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investees, share of profits (losses) of investees, ending balance, amount received as earnings distributions from the investment, and limitation on investment: See Table 9 attached;

• (ii) Significant direct or indirect transactions with investee companies, the prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in Mainland China on financial reports: For the Group’s significant direct or indirect transactions (eliminated when compiling the consolidated financial statements) with investee companies in Mainland China for the year ended December 31, 2021, please refer to “Information on significant transactions” and “Business relationships and significant intercompany transactions” above.

(d) Major shareholders:

According to the information provided by Taiwan Depository & Clearing Corporation, none of the shareholders hold over 5% of the Company’s stocks.

14. Segment information

• (a) General information

The Group’s reportable segments comprise the device business group (“IT Hardware Products”) and other business groups. The IT Hardware Products engages mainly in the research, design, and marketing of personal computers, IT products, and tablet products. Other business groups, which do not meet the quantitative reporting threshold, mainly engage in the activities of e-commerce, cloud services, sales and distribution of smart devices, distributors and agency, new energy devices, and handheld devices, as well as real estate services.

Strategic investment expenditures (such as global branding expenditures, depreciation of the capital expenditures for the strengthening of the global information structure, and non-routine long-term strategic expenditures) are not allocated to reportable segments. Operating profit is used as the measurement for segment profit and the basis for performance evaluation. The reporting amount is consistent with the report used by the chief operating decision maker. There was no material inconsistency between the accounting policies adopted for the operating segments and the significant accounting policies of the Group.

(Continued)

92

ACER INCORPORATED AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s operating segment information and reconciliation was as follows:

Revenues from external customers Intra-group revenue Total revenues Segment profit (loss)			2021	2021
	IT Hardware Products $ 281,640,355 1,676,566 $ 283,316,921 $ 15,845,251		Others 37,365,101 2,524,042 39,889,143 1,024,627	Adjustments and eliminations - (4,200,608) (4,200,608) (2,707,017)	Total
					319,005,456 -
					319,005,456
					14,162,861

Revenues from external customers Intra-group revenue Total revenues Segment profit (loss)			2020	2020
	IT Hardware Products $ 247,608,295 1,964,841 $ 249,573,136 $ 10,241,102		Others 29,504,182 1,928,939 31,433,121 429,884	Adjustments and eliminations - (3,893,780) (3,893,780) (1,735,148)	Total
					277,112,477 -
					277,112,477
					8,935,838

(b) Product and service information

Revenues from external customers are detailed below:

Products and services Personal computers Peripherals and others	2021 $ 237,437,820 81,567,636 $ 319,005,456	2020
		206,616,248 70,496,229
		277,112,477

(c) Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers, and segment assets are based on the geographical location of the assets.

Revenues from external customers are detailed below:

Region U.S.A. Mainland China Taiwan Others	2021 $ 72,123,742 17,067,580 50,521,591 179,292,543 $ 319,005,456	2020
		75,134,328 12,034,262 37,364,653 152,579,234
		277,112,477

(Continued)

93

ACER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Non-current assets:

Region U.S.A. Taiwan Mainland China Others	December 31, 2021 $ 10,520,400 5,296,052 2,197,269 5,182,892 $ 23,196,613	December 31, 2020
		10,797,633 4,552,911 2,105,099 5,384,042
		22,839,685

Non-current assets include property, plant and equipment, right-of-use assets, investment property and intangible assets, and do not include financial instruments, prepaid income taxes, deferred tax assets, and pension fund assets.

• (d) Major customers’ information

The Group doesn’t have a single customer representing at least 10% of revenue in the consolidated statements of comprehensive income.

Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021

Table 1

Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021	Table 1 Acer Incorporated and Subsidiaries Financing provided to other parties For the year ended December 31, 2021
(Amounts in Thousands of New Taiwan Dollars)
No.	Financing Company	Counterparty	Financial Statement Account (Note 3)	Related Party	Maximum Balance for the Period	Ending Balance	Actually drawndown Amounts	Interest Rate	Nature of Financing (Note 1)	Transaction Amounts	Reasons for Short-term Financing	Loss Allowance	Collateral		Financing Limit for Each Borrowing Company (Note 2)	Financing Company's Total Financing Amount Limits (Note 2)
													Item	Value
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 2 2 2	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company APDI ABH ABH ABH ABH	APDI ABH CCI ADSC ASDI AGT API MPS MPS AMED EDC GTI ALT ALT AGM AGM AGM AFE The Company The Company ACTTW ABST ABST	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	40,000 15,000 4,000 25,000 38,000 100,000 25,000 35,000 65,000 15,000 400,000 50,000 100,000 105,000 300,000 295,000 300,000 332,833 40,000 150,000 30,000 40,000 38,000	30,000 - 4,000 15,000 35,000 100,000 25,000 35,000 65,000 - 400,000 - - 105,000 - 295,000 300,000 330,294 30,000 - - - 38,000	- - - - - - - 35,000 21,000 - - - - 78,000 - - 110,000 330,294 - - - - 37,800	0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4%	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - - - - - - - - - - - - -	Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements	- - - - - - - - - - - - - - - - - - - - - - -	None None None None None None None None None None None None None None None None None None None None None None None	- - - - - - - - - - - - - - - - - - - - - - -	6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 6,148,393 43,005 611,622 152,905 152,905 152,905	30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 30,741,967 43,005 611,622 611,622 611,622 611,622

～ 94 ～

No.	Financing Company	Counterparty	Financial Statement Account (Note 3)	Related Party	Maximum Balance for the Period	Ending Balance	Actually drawndown Amounts	Interest Rate	Nature of Financing (Note 1)	Transaction Amounts	Reasons for Short-term Financing	Loss Allowance	Collateral	Collateral	Financing Limit for Each Borrowing Company (Note 2)	Financing Company's Total Financing Amount Limits (Note 2)
													Item	Value
2 2 2 2 2 2 2 2 3 4 4 4 4 5 6 6 6 7 8 9 9 9 10 10 11 11	ABH ABH ABH ABH ABH ABH ABH ABH CCI ADSC ADSC ADSC ADSC ACTTW ASDI ASDI ASDI AGT API AIZS AIZS AIZS GWI GWI AAH AAH	ABSG ABSG ABC ABC ABC ABST ABST AIC The Company The Company Bluechip Bluechip ABST ABSG The Company APDI APDI The Company The Company ACCQ ACCQ ACCQ AAC AAC AAC AAC	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	77,486 69,711 10,000 12,000 12,000 68,000 70,000 30,000 100,000 100,000 28,514 25,098 70,000 17,413 38,000 40,000 38,000 100,000 25,000 207,460 212,122 211,288 397,768 407,993 4,290,212 4,336,712	- 66,115 - 12,000 12,000 - 70,000 30,000 100,000 100,000 - 24,133 - - 35,000 - 38,000 100,000 25,000 - 209,109 211,288 - 395,967 - 4,208,880	- 65,328 - 12,000 - - 68,000 - 100,000 100,000 - 24,133 - - 20,000 - 14,000 70,000 25,000 - 209,109 - - 395,967 - 4,208,880	0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4%	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - - - - - - - - - - - - - - - -	Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements	- - - - - - - - - - - - - - - - - - - - - - - - - -	None None None None None None None None None None None None None None None None None None None None None None None None None None	- - - - - - - - - - - - - - - - - - - - - - - - - -	152,905 152,905 152,905 152,905 152,905 152,905 152,905 152,905 151,975 498,611 124,653 124,653 124,653 - 85,951 85,951 85,951 141,378 33,667 253,844 253,844 253,844 25,818,317 25,818,317 32,213,321 32,213,321	611,622 611,622 611,622 611,622 611,622 611,622 611,622 611,622 151,975 498,611 498,611 498,611 498,611 - 85,951 85,951 85,951 141,378 33,667 253,844 253,844 253,844 25,818,317 25,818,317 32,213,321 32,213,321

～ 95 ～

No.	Financing Company	Counterparty	Financial Statement Account (Note 3)	Related Party	Maximum Balance for the Period	Ending Balance	Actually drawndown Amounts	Interest Rate	Nature of Financing (Note 1)	Transaction Amounts	Reasons for Short-term Financing	Loss Allowance	Collateral	Collateral	Financing Limit for Each Borrowing Company (Note 2)	Financing Company's Total Financing Amount Limits (Note 2)
													Item	Value
12 13 14 15 15 15 16 16 16 17 17 18 18 18 18	MPS AMED EDC Bluechip Bluechip Bluechip WLII WLII WLII PGL PGL PAL PAL PAL PAL	The Company The Company The Company BLI BLI DNA PGL PAM CRI CRI PAM CRI PAM PGL PST	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	1,000 1,000 400,000 1,141 5,593 33,559 83,598 69,665 139,330 14,846 14,846 9,360 9,360 9,360 9,360	1,000 - 50,000 - 5,538 33,229 83,598 69,665 139,330 14,782 14,782 9,320 9,320 9,320 9,320	- - - - 3,600 - 83,070 69,225 138,450 - - - - - -	0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 0%~4% 1%~1.12% 1%~1.12% 1%~1.12% 1.2%~1.5% 1.2%~1.5% 1.2%~1.5% 1.2%~1.5% 1.2%~1.5% 1.2%~1.5%	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - - - - -	Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements Operating requirements	- - - - - - - - - - - - - - -	None None None None None None None None None None None None None None None	- - - - - - - - - - - - - - -	18,632 48,623 185,004 60,613 60,613 60,613 186,749 186,749 186,749 18,686 18,686 10,323 10,323 10,323 10,323	18,632 48,623 185,004 60,613 60,613 60,613 746,996 746,996 746,996 74,743 74,743 41,292 41,292 41,292 41,292

～ 96 ～

Note 1: Nature of Financing:

Type 2: Short-term financing purpose

• Note 2: 1. The aggregate financing amount shall not exceed 50% of net worth of the Company, within which the short-term financing amount shall not exceed 20% of net worth of the Company.

• 1-1. For an entity which the Company owns less than 50% of its outstanding common shares, the individual financing amounts shall not exceed lower of 5% of net worth of the Company and 40% of net worth of the entity.

• 1-2. For an entity which the Company owns more than 50% of its outstanding common shares, the individual financing amounts shall not exceed 10% of net worth of the Company.

• 1-3. When a subsidiary who provides financing to other parties is directly or indirectly wholly owned by the Company, the aforementioned limit of aggregate amount and individual financing amount is applied.

• For AIZS, the aggregate financing amount shall not exceed 120% of net worth of AIZS.

• The financing limits of GWI and AAH were as follows:

• 3-1. The individual financing amounts shall not exceed higher of 20% of net worth of the entity or 50% of net worth of the ultimate parent company.

• 3-2. For an entity which the ultimate parent company wholly owns directly or indirectly, the individual financing amounts shall not exceed 120% of net worth of the entity.

• The financing limits of APDI, ABH, CCI, ADSC, ACTTW, AGT, API, MPS, AMED and EDC were as follows:

• 4-1. The aggregate financing amount shall not exceed 40% of net worth of the entities listed above.

• 4-2. The individual financing amounts to the ultimate parent company shall not exceed 40% of net worth of the entities listed above.

• For an entity which the financing company owns more than 50% of its outstanding common shares or is fellow subsidiary of the same group, the individual financing amounts of ABH, ADSC and ACTTW shall not exceed 10% of net worth of ABH, ADSC and ACTTW.

• The financing limit of ASDI is as follows:

• 6-1. The aggregate financing amount shall not exceed 40% of net worth of ASDI.

• 6-2. The individual financing amounts to the ultimate parent company and its related parties shall not exceed 40% of net worth of ASDI.

• Both of the aggregate financing amount and the individual financing amounts of Bluechip shall not exceed 20% of net worth of Bluechip.

• The financing limits of WLII, PGL and PAL were as follows:

• 8-1. The aggregate financing amount shall not exceed 40% of net worth of the entities listed above.

• 8-2. The individual financing amounts shall not exceed 10% of net worth of the entities listed above.

Note 3: Net worth of the Company and subsidiaries listed above are the most recent audited or reviewed.

Note 4: The above transactions are eliminated when preparing the consolidated financial statements.

～ 97 ～

Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021

Table 2

Table 2	Table 2	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021	Acer Incorporated and Subsidiaries Guarantees and endorsements provided to other parties For the year ended December 31, 2021
		(Amounts in Thousands of New Taiwan Dollars)
No.	Endorsement/ Guarantee Provider	Guaranteed Party		Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Note 2 to Note 6)	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable (Note 2 to Note 6)	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship (Note 1)
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 2 3 4 4 4 5 5 5 6 6 6 7	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company AAC AOI AOI AOZ AST AST AST WLII WLII WLII PGL PGL PGL PAM	AJC ATH Acer Asia Pacific subsidiaries AEG Acer EMEA subsidiaries ACN/ACD/ACW/AFN ATB Acer Pan America subsidiaries AMEX Acer Greater China subsidiaries AEB SMA ACA AIL ACCN/ACCQ/BJAC ABSG ITS ALT GTI HSNC HSNP HSNT HSNC/HSNI/HSNP/HSNT MPS EDC AAC AGM HSNI API AGT HSNV ASC AOSD AOC AOC ASTA ASTS ISU CRI PAM PST CRI PAL PAM PAL	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 4 2 2 4 2 2 2 2 2 2 2 2 2 4	12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 12,296,787 2,260,071 197,093 197,093 49,833 73,233 73,233 73,233 373,498 373,498 373,498 37,372 37,372 37,372 6,415	828,320 151,214 1,997,170 275,058 998,585 13,860 855,930 4,850,270 256,779 1,569,205 850,000 106,365 285,310 3,080,352 883,842 142,655 400,000 400,000 360,000 222,810 57,062 72,869 114,124 48,503 2,567,790 975,310 400,000 114,124 150,000 83,070 27,810 17,119 2,769 152,295 28,531 55,620 17,677 30,000 137,957 174,188 142,137 9,788 318,812 318,812 223,728	721,846 146,756 1,938,300 262,420 969,150 12,233 830,700 4,707,300 249,210 1,522,950 - 99,700 152,295 3,019,977 871,289 138,450 400,000 400,000 - 222,690 55,380 72,690 110,760 47,073 2,492,100 969,150 400,000 110,760 150,000 83,070 27,690 16,614 2,769 152,295 - 55,380 17,295 30,000 137,957 174,188 142,137 8,307 - - -	- 18,580 159,624 262,420 144,992 12,233 1,761 26,633 - 51,468 - 1,705 152,295 925,865 - - 104,195 - - - - 6,182 21,014 47,073 1,177,632 689,120 400,000 - - 83,070 - 16,614 - - - - - - 6,071 9,599 27,080 - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	1.17% 0.24% 3.15% 0.43% 1.58% 0.02% 1.35% 7.66% 0.41% 2.48% - 0.16% 0.25% 4.91% 1.42% 0.23% 0.65% 0.65% - 0.36% 0.09% 0.12% 0.18% 0.08% 4.05% 1.58% 0.65% 0.18% 0.24% 0.14% 0.05% 0.15% 0.43% 24.01% - 15.12% 4.76% 8.19% 7.00% 9.00% 8.00% 4.00% - - -	61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 61,483,935 2,260,071 642,038 642,038 124,582 183,083 183,083 183,083 933,745 933,745 933,745 93,429 93,429 93,429 16,038	Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y		Y Y Y Y Y Y

～ 98 ～

No.	Endorsement/ Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Note 2 to Note 6)	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable (Note 2 to Note 6)	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship (Note 1)
8 8 9	PAL PAL DCL	PAM PST PST	4 4 2	20,646 20,646 26,405	223,728 176,186 29,364	- - -	- - -	- - -	- - -	51,615 51,615 66,012			Y Y

• Note 1: Relationships between the endorsement/guarantee provider and the guaranteed party: Type 2: an entity directly or indirectly owned by the Company over 50%

• Type 4: between entities directly or indirectly owned by the Company over 90%

• Note 2: The aggregate endorsement/guarantee amount provided shall not exceed the most recent audited or reviewed net worth of the Company. The endorsement/guarantee provided to individual guarantee party shall not exceed 20% of the most recent audited or reviewed net worth of the Company.

• Note 3: The aggregate endorsement/guarantee amount provided shall not exceed the most recent audited or reviewed net worth of AOI.

• The endorsement/guarantee provided to individual guarantee party shall not exceed 30% of the most recent audited or reviewed net worth of AOI.

• Note 4: The aggregate endorsement/guarantee amount provided shall not exceed 20% of the most recent audited net worth of AAC.

• The endorsement/guarantee provided to individual guarantee party shall not exceed 20% of the most recent audited net worth of AAC.

• Note 5: The aggregate endorsement/guarantee amount provided shall not exceed 50% of the most recent audited or reviewed net worth of AOZ.

• The endorsement/guarantee provided to individual guarantee party shall not exceed 20% of the most recent audited or reviewed net worth of AOZ.

• Note 6: The aggregate endorsement/guarantee amount provided shall not exceed 50% of the most recent audited or reviewed net worth of AST.

• The endorsement/guarantee provided to individual guarantee party shall not exceed 20% of the most recent audited or reviewed net worth of AST.

• Note 7: The aggregate endorsement/guarantee amount provided limits of WLII and its subsidiaries were as follows: The aggregate endorsement/guarantee amount provided shall not exceed 50% of the most recent audited or reviewed net worth of the entities listed above.

• The endorsement/guarantee provided to individual guarantee party shall not exceed 20% of the most recent audited or reviewed net worth of the entities listed above.

• The aggregate endorsement/guarantee amount provided by WLII and its subsidiaries shall not exceed 50% of the most recent audited or reviewed net worth of WLII.

• The endorsement/guarantee provided to individual guarantee party by WLII and its subsidiaries shall not exceed 20% of the most recent audited or reviewed net worth of WLII.

～ 99 ～

Acer Incorporated and Subsidiaries

Marketable securities held at reporting date

(Excluding investments in subsidiaries, associates, and joint controlled entities) December 31, 2021

Table 3

Table 3 December 31,	Table 3 December 31,	Table 3 December 31,	Table 3 December 31,	2021	2021	2021	2021	2021	2021	2021
				(Amounts in Thousands of New Taiwan Dollars / Shares)
Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account	Ending Balance				Maximum ownership during 2021		Note
				Shares/ Units (in thousands)	Carrying Value	Percentage of Ownership	Fair Value	Shares/ Units (in thousands)	Percentage of Ownership
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company ADSC ADSC ADSC ASCBVI ASCBVI ASCBVI	Stock: Starbreeze Stock: Qisda Stock: WPG Holdings Stock: Wistron Preferred Stock B: SKFHC Stock: FocalTech Preferred stock B: CTBC Preferred stock B: CTFH Preferred stock A: CTFH Preferred stock B: FBFH Preferred stock A: FBFH Preferred stock A: UBOT Preferred stock C: FBFH Preferred stock E:TSFH Stock: Pell Bio-med Technology Co., Ltd. Stock: CellMax Life Inc. Stock: CT Ambi Investment and Consulting Inc. Stock: Wistron Stock: Pi Mobile Technology Inc. Stock: Benepet Biomedical Co., Ltd. ID5 Fund L.P. Stock: Trutag Stock: Gorilla	- - - - - - - - - - - - - - - - - - - - - - -	Financial assets measured at fair value through profit or loss — current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income—non-current	572 81,713 4,012 54,816 6,830 7,538 830 1,177 260 951 254 30 7,000 150 2,400 600 2,000 13,046 1,604 322 3,800 1,346 244	1,754 2,488,151 211,008 1,597,886 292,666 1,292,713 53,286 74,741 16,354 60,008 16,053 1,590 420,700 7,965 120,000 17,421 20,000 380,296 126,000 12,108 145,120 5,981 55,380	0.10% 4.15% 0.24% 1.89% 3.08% 3.48% 0.25% 0.17% 0.03% 0.14% 0.04% 0.02% 2.10% 0.02% 7.19% 1.02% 14.39% 0.45% 3.76% 18.92% 19.39% 0.33% 1.90%	1,754 2,488,151 211,008 1,597,886 292,666 1,292,713 53,286 74,741 16,354 60,008 16,053 1,590 420,700 7,965 120,000 17,421 20,000 380,296 126,000 12,108 145,120 5,981 55,380	572 81,713 4,012 54,816 6,830 7,538 830 1,177 260 951 254 30 7,000 150 1,200 600 2,000 13,046 1,604 322 3,800 1,346 244	0.21% 4.15% 0.24% 1.93% 3.08% 3.49% 0.25% 0.17% 0.03% 0.14% 0.04% 0.02% 2.10% 0.02% 7.24% 1.02% 14.39% 0.46% 3.77% 18.92% 19.39% 1.00% 1.91%	Note 1 Note 1 Note 1 Note 2 Note 1 Note 2 Note 2 Note 3 Note 4

～ 100 ～

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account	Ending Balance	Ending Balance	Ending Balance	Ending Balance	Maximum ownership during 2021	Maximum ownership during 2021	Note
				Shares/ Units (in thousands)	Carrying Value	Percentage of Ownership	Fair Value	Shares/ Units (in thousands)	Percentage of Ownership
ASCBVI ASCBVI AGT ABST ACTCQ ACTCQ AHN AHI AEB AEB ACSI AOI AOI AST AST	Stock: Locix Stock: BoniO Stock: RoyalTek Stock: PilotTV Holdings Equity of Thinputer Technology Corporation Equity of Shenmou Technology (Shenzhen) EUR Term Liquidity Fund USD Term Liquidity Fund Preferred Stock B: SKFHC Stock: Ambi Arts Preferred Stock B: SKFHC Stock: MPL Preferred stock C: FBFH Preferred stock C: FBFH Stock: Simple Mart Retail	- - - - - - - - - - - - - - -	Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through profit or loss—current Financial assets measured at fair value through profit or loss—current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income — non-current Financial assets measured at fair value through other comprehensive income—non-current	1,000 463 1,015 2,676 - - - - 666 180 666 25 200 400 300	41,535 110,760 37,064 57,462 8,384 411 736,433 1,804,553 28,538 778 28,538 20,505 12,020 24,040 21,240	4.05% 12.20% 2.01% 19.18% 13.79% 19.99% - - 0.30% 18.00% 0.30% 15.06% 0.06% 0.12% 0.44%	41,535 110,760 37,064 57,462 8,384 411 736,433 1,804,553 28,538 778 28,538 20,505 12,020 24,040 21,240	1,000 463 1,015 2,676 - 960 - - 666 180 666 25 200 400 300	4.58% 14.07% 2.01% 19.18% 13.79% 19.99% - - 0.30% 18.00% 0.30% 15.06% 0.06% 0.12% 0.44%	Note 1 Note 1 Note 3 Note 3

Note 1: The stocks of SKFHC、CTBC、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.、CTBC、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.CTBC、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B. Note 2: The stocks of CTFH、FBFH、UBOT are prefered stock A. The percentage of ownership listed above is the percentage of ownership of preferred stock A. Note 3: The stocks of FBFH are prefered stock C. The percentage of ownership listed above is the percentage of ownership of preferred stock C. Note 4:

The stocks of SKFHC、CTBC、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.、CTBC、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.CTBC、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.、CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.CTFH、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.、FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.FBFH are prefered stock B. The percentage of ownership listed above is the percentage of ownership of preferred stock B.

The stocks of TSFH are prefered stock E. The percentage of ownership listed above is the percentage of ownership of preferred stock E.

～ 101 ～

Acer Incorporated and Subsidiaries

Marketable securities for which the accumulated purchase or sale amounts for the period exceed NT$300 million or 20% of the paid-in capital For the year ended December 31, 2021

Table 4

Table 4	Table 4	Table 4	Table 4	Table 4
					(Amounts in Thousands of New Taiwan Dollars / Shares)
Company Name	Marketable Securities Type and Name	Financial Statement Account	Counterparty	Nature of Relationship	Beginning Balance		Acquisitions		Disposal				Ending Balance
					Shares/ Units (in thousands)	Amount	Shares/ Units (in thousands)	Amount	Shares/ Units (in thousands)	Amount	Carrying Value	Gain (Loss) on Disposal	Shares/ Units (in thousands)	Amount
ACCN ACCQ The Company The Company	Fubon Bank (China) CNY SDRMBC 16030000 Fubon Bank (China) CNY SDRMBC 16030000 Common Stock of FocalTech Preferred stock C of FBFH	Financial assets measured at fair value through profit or loss— current Financial assets measured at fair value through profit or loss— current Financial assets measured at fair value through other comprehensive income－non- current Financial assets measured at fair value through other comprehensive income－non- current	Fubon Bank (China) Co., Ltd. Fubon Bank (China) Co., Ltd. Centralized Securities Exchange Market Centralized Securities Exchange Market	None None None None	- - - -	- - - -	827,000 4,432,000 7,538 7,000	3,587,303 19,229,403 1,500,487 420,700	827,000 4,432,000 - -	3,609,549 19,317,616 - -	3,587,303 19,229,403 - -	22,246 88,213 - -	- - 7,538 7,000	- - 1,292,713 420,700

～ 102 ～

Acer Incorporated and Subsidiaries Total purchases from and sales to related parties which exceed NT$100 million or 20% of the paid-in capital For the year ended December 31, 2021

Table 5

Table 5	Table 5	Table 5	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021
			(Amounts in Thousands of New Taiwan Dollars)
Company Name	Related Party	Nature of Relationship	Transaction Details				Transactions with Terms Different from Others (Note 1)		Notes/Accounts Receivable or (Payable)		Note
			Purchases/ (Sales)	Amount	% of Total Purchases/(Sales)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company WELL ALT	AAC ACA ACCQ ACNZ ACS AEG AFE AIL AIN AIN AJC AMI APHI APHI APX ASC ASSB ATH AVN AVN GrandPAD ALT AEB AOI AGT WLII AOSD GTI WLII The Company	Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Associate Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary	(Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) Purchases (Sales) (Sales) (Sales) Purchases (Sales) (Sales) (Sales) (Sales) (Sales) Purchases (Sales) Purchases Purchases Purchases Purchases (Sales) Purchases Purchases Purchases (Sales)	(73,481,903) (6,199,228) (11,420,047) (878,109) (2,965,691) (93,323,424) (574,495) (9,717,757) (7,765,861) 719,887 (1,580,432) (987,777) (1,989,819) 198,222 (144,075) (160,162) (4,444,131) (7,508,925) (246,007) 118,143 (128,715) 134,306 179,874 313,375 404,098 (1,667,404) 1,117,417 309,033 354,960 (134,306)	(29.77)% (2.51)% (4.63)% (0.36)% (1.20)% (37.81)% (0.23)% (3.94)% (3.15)% 0.31% (0.64)% (0.40)% (0.81)% 0.08% (0.06)% (0.06)% (1.80)% (3.04)% (0.10)% 0.05% (0.05)% 0.06% 0.08% 0.13% 0.17% (0.68)% 0.48% 0.13% 94.36% (30.91)%	OA90 OA60 OA60 OA60 OA60 OA60 OA60 OA150 OA90 OA60 OA60 OA90 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 EM120 OA60 EM30 EM60 OA60/EM60 EM45 OA60 OA60 EM45 OA60	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	15,257,348 2,246,002 808,111 229,474 690,477 6,603,418 117,976 5,039,862 2,614,602 (37,111) 720,672 180,379 605,612 (69,439) 24,763 13,235 559,237 1,499,048 34,721 (8,606) - (51,885) (31,766) (307,088) (130,458) 144,320 - - (100,886) 51,885	34.79% 5.12% 1.84% 0.52% 1.57% 15.06% 0.27% 11.49% 5.96% (0.08)% 1.64% 0.41% 1.38% (0.14)% 0.06% 0.03% 1.28% 3.42% 0.08% (0.02)% - (0.11)% (0.07)% (0.63)% (0.27)% 0.33% - - (97.85)% 42.74%

～ 103 ～

Company Name	Related Party	Nature of Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Transactions with Terms Different from Others (Note 1)	Transactions with Terms Different from Others (Note 1)	Notes/Accounts Receivable or (Payable)	Notes/Accounts Receivable or (Payable)	Note
			Purchases/ (Sales)	Amount	% of Total Purchases/(Sales)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
AEB AEB AOI AOI AOI AGT WLII WLII WLII AOSD PAM GTI AAC AAC AAC AAC ACA ACA ACA ACCN ACCQ ACCQ ACCQ ACF ACF ACF ACG ACG ACG ACH ACH ACH ACNZ ACNZ ACS ACZ	The Company WLII AOA AOE The Company The Company The Company WELL AEB The Company CRI The Company AMEX ASC ATB The Company ACNZ Bluechip The Company ACCQ ACCN AOC The Company AEG AEG APX AEG AEG APX AEG AEG APX ACA The Company The Company AEG	Parent/Subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary	(Sales) Purchases (Sales) (Sales) (Sales) (Sales) Purchases (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) Purchases (Sales) (Sales) Purchases (Sales) Purchases Purchases Purchases (Sales) Purchases Purchases (Sales) Purchases Purchases (Sales) Purchases Purchases Purchases Purchases Purchases (Sales)	(179,874) 276,499 (162,293) (359,355) (313,375) (404,098) 1,667,404 (354,960) (276,499) (1,117,417) (220,569) (309,033) (1,861,265) (646,615) (461,158) 73,481,903 (103,193) (165,789) 6,199,228 (273,941) 273,941 188,166 11,420,047 (354,977) 11,738,713 159,511 (613,935) 27,230,308 249,848 (102,053) 6,256,704 115,006 103,193 878,109 2,965,691 (112,569)	(2.90)% 5.47% (16.90)% (37.43)% (32.64)% (52.17)% 9.87% (1.97)% (1.54)% (100.00)% (23.66)% (83.48)% (2.61)% (0.91)% (0.65)% 100.00% (1.43)% (2.30)% 93.20% (67.89)% 1.76% 1.21% 73.48% (2.74)% 93.86% 1.28% (2.08)% 95.24% 0.87% (1.50)% 95.10% 1.75% 10.23% 87.04% 86.63% (16.86)%	EM30 EM60 OA90 OA60 EM60 OA60/EM60 EM45 EM45 EM60 OA60 TT60 OA60 OA60 OA60 OA60 OA90 OA60 EM30 OA60 OA60 OA60 EM60 OA60 OA60 OA60 OA60 OA60 OA60 OA45 OA60 OA60 OA60 OA60 OA60 OA60 OA60	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	31,766 (77,555) 187,371 119,025 307,088 130,458 (144,320) 100,886 77,555 - 123,406 - 246,628 69,240 87,068 (15,257,348) 407 30,254 (2,246,002) 83,394 (83,394) (72,841) (808,111) 1,172,814 (1,910,308) (13,030) 2,346,828 (6,705,578) (40,822) 439,617 (930,024) (18,307) (407) (229,474) (690,477) 13,765	1.73% (7.88)% 27.73% 17.61% 45.44% 47.58% (6.89)% 4.16% 3.20% - 42.91% - 2.48% 0.70% 0.88% (96.17)% 0.02% 1.83% (98.22)% 87.97% (5.05)% (4.41)% (48.94)% 23.44% (97.64)% (0.67)% 20.09% (99.01)% (0.60)% 22.13% (97.57)% (1.92)% (0.18)% (99.11)% (97.98)% 12.15%

～ 104 ～

Company Name	Related Party	Nature of Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Transactions with Terms Different from Others (Note 1)	Transactions with Terms Different from Others (Note 1)	Notes/Accounts Receivable or (Payable)	Notes/Accounts Receivable or (Payable)	Note
			Purchases/ (Sales)	Amount	% of Total Purchases/(Sales)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
ACZ ACZ ACZ AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AEH AFE AIB AIB AIB AIL AIN AIN AIN AIN AIT	APX APX ASIN ACF ACF ACG ACG ACH ACH ACZ AEH AIB AIB AIT AIT APX APX ASIN ASZ ASZ AUK CPY ENNL SER The Company AEG The Company AEG AEG APX The Company AMI AMI The Company The Company AEG	Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary	(Sales) Purchases (Sales) (Sales) Purchases (Sales) Purchases (Sales) Purchases Purchases Purchases (Sales) Purchases (Sales) Purchases (Sales) Purchases (Sales) (Sales) Purchases (Sales) (Sales) Purchases (Sales) Purchases (Sales) Purchases (Sales) Purchases Purchases Purchases (Sales) Purchases (Sales) Purchases (Sales)	(101,091) 236,158 (255,450) (11,738,713) 354,977 (27,230,308) 613,935 (6,256,704) 102,053 112,569 186,652 (5,833,518) 339,693 (5,843,573) 268,015 (1,138,756) 1,659,237 (28,132,758) (2,329,461) 104,885 (9,446,695) (1,428,061) 119,695 (1,619,494) 93,323,424 (186,652) 574,495 (339,693) 5,833,518 140,758 9,717,757 (189,477) 1,055,874 (719,887) 7,765,861 (268,015)	(15.14)% 38.33% (38.25)% (11.64)% 0.36% (27.00)% 0.63% (6.20)% 0.10% 0.12% 0.19% (5.78)% 0.35% (5.79)% 0.27% (1.13)% 1.70% (27.89)% (2.31)% 0.11% (9.37)% (1.42)% 0.12% (1.61)% 95.56% (70.17)% 89.37% (5.24)% 92.44% 2.23% 68.09% (2.30)% 13.16% (8.74)% 86.84% (4.17)%	OA60 OA90 OA30 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA30 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA150 OA60 OA90 OA60 OA90 OA60	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	27,877 (40,823) 21,615 1,910,308 (1,172,814) 6,705,578 (2,346,828) 930,024 (439,617) (13,765) (15,720) 796,243 (630,307) 669,913 (892,698) - (59,609) 6,054,479 349,445 (278,167) 2,209,507 368,248 (26,013) 348,429 (6,603,418) 15,720 (117,976) 630,307 (796,243) (23,452) (5,039,862) 24,192 - 37,111 (2,614,602) 892,698	24.60% (76.49)% 19.07% 9.30% (8.25)% 32.64% (16.50)% 4.53% (3.09)% (0.10)% (0.11)% 3.88% (4.43)% 3.26% (6.28)% - (0.42)% 29.47% 1.70% (1.96)% 10.76% 1.79% (0.18)% 1.70% (46.43)% 56.42% (93.11)% 28.32% (97.52)% (2.87)% (91.60)% 2.68% - 4.11% (99.59)% 34.32%

～ 105 ～

Company Name	Related Party	Nature of Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Transactions with Terms Different from Others (Note 1)	Transactions with Terms Different from Others (Note 1)	Notes/Accounts Receivable or (Payable)	Notes/Accounts Receivable or (Payable)	Note
			Purchases/ (Sales)	Amount	% of Total Purchases/(Sales)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
AIT AJC AMEX AMI AMI AMI AOA AOC AOE APHI APHI APX APX APX APX APX APX APX APX APX ARU ASC ASC ASIN ASIN ASIN ASSB ASSB ASSB ASZ ASZ ATB ATH AUK AVN AVN	AEG The Company AAC AIN AIN The Company AOI ACCQ AOI The Company The Company ACF ACG ACH ACZ ACZ AEG AEG AIB The Company ASIN AAC The Company ACZ AEG ARU HSN SMA The Company AEG AEG AAC The Company AEG The Company The Company	Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary	Purchases Purchases Purchases (Sales) Purchases Purchases Purchases (Sales) Purchases (Sales) Purchases (Sales) (Sales) (Sales) (Sales) Purchases (Sales) Purchases (Sales) Purchases (Sales) Purchases Purchases Purchases Purchases Purchases (Sales) (Sales) Purchases (Sales) Purchases Purchases Purchases Purchases (Sales) Purchases	5,843,573 1,580,432 1,861,265 (1,055,874) 189,477 987,777 162,293 (188,166) 359,355 (198,222) 1,989,819 (159,511) (249,848) (115,006) (236,158) 101,091 (1,659,237) 1,138,756 (140,758) 144,075 (132,317) 646,615 160,162 255,450 28,132,758 132,317 (122,135) (643,486) 4,444,131 (104,885) 2,329,461 461,158 7,508,925 9,446,695 (118,143) 246,007	94.03% 62.85% 94.11% (99.84)% 15.38% 80.16% 98.47% (84.91)% 99.33% (8.34)% 86.57% (4.67)% (7.32)% (3.37)% (6.92)% 3.38% (48.58)% 38.10% (4.12)% 4.82% (100.00)% 80.14% 19.85% 0.89% 98.48% 0.46% (2.36)% (12.43)% 95.42% (3.90)% 91.80% 4.68% 94.55% 93.73% (32.06)% 89.11%	OA60 OA60 OA60 OA90 OA60 OA90 OA90 EM60 OA60 OA60 OA60 OA60 OA45 OA60 OA90 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA30 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	(669,913) (720,672) (246,628) - (24,192) (180,379) (187,371) 72,841 (119,025) 69,439 (605,612) 13,030 40,822 18,307 40,823 (27,877) 59,609 - 23,452 (24,763) 9,718 (69,240) (13,235) (21,615) (6,054,479) (9,718) 28,762 - (559,237) 278,167 (349,445) (87,068) (1,499,048) (2,209,507) 8,606 (34,721)	(96.16)% (99.98)% (97.23)% - (11.44)% (85.28)% (98.27)% 91.98% (100.00)% 33.61% (95.60)% 5.71% 17.90% 8.03% 17.90% (16.46)% 26.14% - 10.28% (14.62)% 100.00% (53.48)% (10.22)% (0.35)% (99.34)% (0.16)% 11.81% - (98.42)% 29.33% (96.85)% (3.35)% (93.35)% (99.90)% 17.77% (80.61)%

～ 106 ～

Company Name	Related Party	Nature of Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Transactions with Terms Different from Others (Note 1)	Transactions with Terms Different from Others (Note 1)	Notes/Accounts Receivable or (Payable)	Notes/Accounts Receivable or (Payable)	Note
			Purchases/ (Sales)	Amount	% of Total Purchases/(Sales)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Bluechip CPY CRI ENNL GrandPAD HSN SER SMA	ACA AEG PAM AEG The Company ASSB AEG ASSB	Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Associate Fellow subsidiary Fellow subsidiary Parent/Subsidiary	Purchases Purchases Purchases (Sales) Purchases Purchases Purchases Purchases	165,789 1,428,061 220,569 (119,695) 128,715 122,135 1,619,494 643,486	6.62% 100.00% 26.44% (100.00)% 47.38% 38.85% 100.00% 18.08%	EM30 OA60 TT60 OA30 EM120 OA60 OA60 OA60	- - - - - - - -	- - - - - - - -	(30,254) (368,248) (123,406) 26,013 - (28,762) (348,429) -	(16.42)% (97.35)% (68.88)% 98.80% - (9.15)% (98.41)% -

Note 1: The trade terms and price of sales with related parties are not comparable to those with third-party customers as they are determined by the

economic environment and market competition of specific locations. The purchase price with related parties are not comparable to the purchase price with third-party vendors as the specifications of products are different. Note 2: The above transactions between parent and subsidiary are eliminated when preparing the consolidated financial statements.

～ 107 ～

Acer Incorporated and Subsidiaries Receivables from related parties which exceed NT$100 million or 20% of the paid-in capital December 31, 2021

Table 6

Table 6	Table 6	Table 6	Table 6	Table 6
					(Amounts in Thousands of New Taiwan Dollars)
Company Name	Related Party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue		Amount Received in Subsequent Period	Loss Allowance	Note
					Amount	Action Taken
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company ABH AOI AOI AOI AGT WLII WLII PAM ADSC ADSC CCI	AAC ACA ACCQ ACNZ ACS AEG AFE AIL AIN AJC AMI APHI ASSB ATH ITS WLII ABST AOA AOE The Company The Company CRI WELL CRI ASDI The Company The Company	Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary	15,257,348 2,246,606 808,111 229,474 697,621 6,603,418 448,270 5,039,862 2,614,602 722,364 180,379 605,612 560,163 1,499,048 111,490 144,811 105,988 187,371 119,025 307,088 201,387 138,801 100,886 123,406 169,060 100,314 100,314	5.66 3.25 17.88 4.87 5.07 21.98 1.87 2.48 5.11 0.69 10.33 4.48 8.18 7.33 2.92 10.36 - 0.78 3.02 4.02 6.20 - 4.59 6.13 - - -	- 813,274 - 151,625 280,528 - 8,029 - - 431,182 - 9,113 - 346,831 459 - - 148,733 62,404 2,025 23,417 - - - - - -	Under collection Under collection Under collection Under collection Under collection Under collection Under collection Under collection Under collection Under collection Under collection Under collection	8,662,642 1,477,610 898,553 218,534 329,171 7,485,642 92,656 1,008,839 1,822,071 120,538 57,462 521,626 437,352 1,280,001 1,135 144,811 - 11,586 40,120 307,088 23,417 - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - -	Note 2

～ 108 ～

Company Name	Related Party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period	Loss Allowance	Note
					Amount	Action Taken
AAC AAC AAH ACCQ ACF ACG ACH AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG AIB AIT AIZS ASC ASIN ASZ AUK GWI	AMEX ASC AAC The Company AEG AEG AEG ACF ACG ACH AIB AIT ASIN ASZ AUK CPY SER AEG AEG ACCQ AAC AEG AEG AEG AAC	Fellow subsidiary Fellow subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent/Subsidiary	246,628 411,324 4,213,197 139,088 1,172,814 2,346,828 439,617 1,910,308 6,705,578 930,024 796,243 669,913 6,054,479 349,445 2,209,507 368,248 348,429 631,314 892,698 212,068 153,973 402,953 278,439 846,791 395,967	3.94 8.78 - - 0.32 0.25 0.22 7.81 4.74 7.92 7.08 6.48 5.71 8.52 4.37 7.76 5.50 0.56 0.33 - 88.36 0.01 0.36 0.11 -	- - - - 30,634 47,014 - - 1,071,963 - - - - - 657,169 21,444 - - - - - - - - -	Under collection Under collection Under collection Under collection Under collection	- - - - 30,634 47,014 - - 958,073 - - - - - 668,472 21,444 - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - -

Note 1: The above transactions between parent and subsidiary are eliminated when preparing the consolidated financial statements. Note 2: Receivables are financing and interest receivables, not applicable.

～ 109 ～

Acer Incorporated and Subsidiaries Business relationships and significant intercompany transactions December 31, 2021

Table 7

(Amounts in Thousands of New Taiwan Dollars)

Intercompany relationships and significant intercompany transactions for the year ended December 31, 2021 were as follows:

Number	Company Name	Counterparty	Nature of Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Percentage of Consolidated Net Revenue or Total Assets
				Account	Amount	Transaction Terms
0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 3	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company AEG AEG AEG AEG AEG AEG AEG AEG AEG AEG ACG AAH	ACA ATH ASSB ACCQ AAC AIN AIL AEG ACA AAC AIN AIL AEG ASIN ACG AUK ACF ACH AIT AIB ASIN ACG AUK AEG AAC	1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 1	Sales Sales Sales Sales Sales Sales Sales Sales Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Sales Sales Sales Sales Sales Sales Sales Accounts receivable Accounts receivable Accounts receivable Accounts receivable Other receivable	6,199,228 7,508,925 4,444,131 11,420,047 73,481,903 7,765,861 9,717,757 93,323,424 2,246,002 15,257,348 2,614,602 5,039,862 6,603,418 28,132,758 27,230,308 9,446,695 11,738,713 6,256,704 5,843,573 5,833,518 6,054,479 6,705,578 2,209,507 2,346,828 4,213,197	OA60 OA60 OA60 OA60 OA90 OA90 OA150 OA60 OA60 OA90 OA90 OA150 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 OA60 -	1.94% 2.35% 1.39% 3.58% 23.03% 2.43% 3.05% 29.25% 1.05% 7.10% 1.22% 2.35% 3.07% 8.82% 8.54% 2.96% 3.68% 1.96% 1.83% 1.83% 2.82% 3.12% 1.03% 1.09% 1.96%

Note 1: Parties to the intercompany transactions are identified and numbered as follows:

1. "0" represents the Company.

2. Subsidiaries are numbered from "1".

3. Note 2: The relationships with counter party are as follows:

4. No. 1 represents the transactions from parent company to subsidiary.

5. No. 2 represents the transactions from subsidiary to parent company.

6. No. 3 represents the transactions from subsidiary to subsidiary.

7. Note 3: Intercompany relationships and significant intercompany transactions are disclosed only for the amounts that exceed 1% of consolidated net revenue or total assets. The corresponding purchases and accounts payables are not disclosed.

～ 110 ～

Acer Incorporated and Subsidiaries

Names, Locations, and Related Information of Investees over which The Company Exercises Significant Influence December 31, 2021

Table 8

Table 8	Table 8	Table 8	Table 8	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021
				(Amounts in Thousands of New Taiwan Dollars/Shares)
Investor	Investee	Location	Main Businesses and Products	Original Investment Amount		Balances as of December 31, 2021			Maximum ownership during 2021		Net Income (Loss) of the Investee	Share of profits/ losses of investee	Note
				December 31, 2021	December 31, 2020	Shares (in thousands)	Percentage of Ownership	Carrying Value	Shares (in thousands)	Percentage of Ownership
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company ASBZ HSNC HSNC HSNC HSNC HSNC AST AST ADSC ADSC ADSC ADSC ADSC	ADSC Boardwalk AEH AHI Bluechip ASCBVI CCI ACSI WLII ATI AGT ABH ASBZ EDC AOI GTI HSNC SFT AST API AGM AAM VRE HSNT HSNI HSN HSNP HSNV ISU ASTA ECS APDI ASDI AGM Kbest	Taiwan British Virgin Islands Switzerland British Virgin Islands Australia British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Switzerland Thailand Indonesia Malaysia Philippines Vietnam Taiwan U.S.A. Taiwan Taiwan Taiwan Taiwan Taiwan	Investment and holding activity Investment and holding activity Investment and holding activity Investment and holding activity Sale of computer peripherals and software system Investment and holding activity Investment and holding activity Cyber security service Sale of computers and communication products Integrated circuit test service Research, design and sale of smart handheld products and peripheral 3C products Investment and holding activity Solutions provider of B2B virtual reality Data center and cloud services Sale, manufacture, import and export of commercial computer products, software, components, peripheral equipment and apparatus; repair and maintenance service of computer products Sale of peripheral 3C products Repair and maintenance of IT products Research, manufacturing and sale of radio- detection and civilian technology application products related to distance System integration service Intelligent solutions of air quality Agency of video game console and peripherals Property held and related management business Research of solutions to B2B virtual reality Repair and maintenance of IT products Repair and maintenance of IT products Repair and maintenance of IT products Repair and maintenance of IT products Repair and maintenance of IT products Human resources and project service System integration service Business integration system Solar optronics business Hotel management service Agency of video game console and peripherals Development and manufacturing of radio and microwave equipment	1,143,730 41,496,383 2,464,262 6,230,208 43,407 5,658,111 1,299,817 1,139,390 728,694 - 6,826,148 2,128,004 395,981 518,167 333,155 - 107,429 132,000 82,577 93,365 107,851 1,077,189 38,979 2,345 30,501 85,419 6,741 4,192 20,000 14,000 40,851 29,577 500,000 - 129,293	1,143,730 41,496,383 2,464,262 6,230,208 32,988 5,658,111 1,299,817 1,139,390 730,210 815,583 6,800,751 2,128,004 395,981 1,595,356 333,155 45,000 150,000 132,000 82,577 93,365 - - 38,979 1,763 30,501 85,419 6,741 - 20,000 - 40,851 29,577 500,000 10,000 129,293	66,215 1,263,432 147 191,155 1,421 158,475 - 10,971 48,073 - 12,540 130,308 441 44,462 28,970 - 10,743 13,200 6,775 8,222 10,000 107,719 100 74 99 500 106 - 2,000 1 1,244 2,958 5,000 - 4,713	100.00 92.02 100.00 100.00 28.10 100.00 100.00 64.54 58.93 - 100.00 100.00 66.81 100.00 40.55 - 66.27 55.00 52.00 100.00 100.00 100.00 100.00 100.00 99.00 100.00 0.00 100.00 100.00 100.00 24.88 100.00 100.00 - 29.84	1,291,834 25,487,197 17,738,760 15,443,940 82,086 683,136 600,892 415,709 1,118,169 - 1,983,403 1,607,555 7,092 468,820 271,241 - 111,599 71,601 190,403 84,778 133,637 1,077,692 (144) 1,733 37,275 92,840 19,957 2,783 38,576 11,657 27,195 38,156 58,571 - 32,937	128,282 1,263,432 147 191,155 1,225 158,475 - 10,971 49,674 1,203 16,000 149,779 441 162,956 28,970 4,500 15,000 13,200 6,775 8,222 10,000 107,719 100 74 99 500 106 - 2,000 1 1,244 2,958 22,593 1,000 4,713	100.00 92.02 100.00 100.00 33.39 100.00 100.00 64.54 67.36 19.39 100.00 100.00 66.81 100.00 40.55 83.64 92.54 55.00 60.88 100.00 100.00 100.00 100.00 100.00 99.00 100.00 100.00 100.00 100.00 100.00 24.88 100.00 100.00 100.00 29.84	64,348 1,846,032 2,098,315 594,893 28,407 (24,306) 2,769 86,853 340,919 - 8,082 125,439 (475) 30,747 136,351 10,921 12,158 (32,213) 20,697 1,046 32,391 503 (229) (3,850) 5,022 9,178 25,145 (1,419) 17,409 (2,199) 32,327 1,184 10,932 32,391 26,851	64,348 1,698,627 2,098,315 594,893 7,665 (24,306) 2,769 56,052 204,569 - (3,922) 125,439 (317) 30,747 53,664 8,346 10,630 (17,717) 16,544 1,046 25,807 503 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Associate Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Joint Venture Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Associate Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Associate

～ 111 ～

Investor	Investee	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balances as of December 31, 2021	Balances as of December 31, 2021	Balances as of December 31, 2021	Maximum ownership during 2021	Maximum ownership during 2021	Net Income (Loss) of the Investee	Share of profits/ losses of investee	Note
				December 31, 2021	December 31, 2020	Shares (in thousands)	Percentage of Ownership	Carrying Value	Shares (in thousands)	Percentage of Ownership
ASDI CCI WLII WLII WLII WLII WLII AEH ACTI Bluechip Bluechip Bluechip ABH ABH ABH ABH ABH ABH ABH ABH ABH ACTTW ACTTW ABST ACSI AOI AOI AOI AOI AOI AOI AOI AOI AOI	Kbest ECS HPT WELL ANT PBT PGL Boardwalk GrandPAD BLI DingoTech BLNZ AEB ACTTW MPS ALT ITS AMED ABC XPL AIC ABC ABST ABSG ACAD Bluechip AOA AOE AOTH AOJ AOSV AOGS HTW AOSD	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands British Virgin Islands U.S.A. Taiwan Australia New Zealand Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Germany Taiwan Australia U.S.A. the Netherlands British Virgin Islands Japan Taiwan Australia Hong Kong Taiwan	Development and manufacturing of radio and microwave equipment Business integration system Retail service of software Sales of 3C products and home appliances OEM sales agent of mechanical components, automobiles and locomotives Sale of health supplements and biotech service Investment and holding activity Investment and holding activity Development of user-friendly IoT device Sale of computer peripherals and software system Investment and holding activity Investment and holding activity Providing solutions of cloud and digitalization Development of Internet of Beings and cloud technology, and integration of cloud technology, software and hardware Research, development, and sale of batteries High performance computing, cloud computing, software-defined storage, and IT solution Programs and services of intelligent transportation and electronic ticketing Intelligent medical examination and data interpretation analysis, medical big data, and health management and related information exchange Software design service Design, development and sale of smart bicycle Providing cloud technology and solutions Software design service Technical service and research of aBeing cloud digital content management Technical service and research of aBeing cloud digital content management Cyber security training Sale of computer peripherals and software system Sale of computer, apparatus system, and peripheral equipment Sale of computer, apparatus system, and peripheral equipment Sale of computer, apparatus system, and peripheral equipment Sale of computer, apparatus system, and peripheral equipment Sale of computer, apparatus system, and peripheral equipment Sale of computer, apparatus system, and peripheral equipment Software development and agency Sale of displaydevice	3,997 - 26,820 10,000 203,052 750 337,906 3,333,032 350,477 1,000 110,110 69,343 275,612 955,056 141,711 78,613 394,772 83,490 18,500 38,173 50,676 76,371 300,000 325,630 10,000 36,915 295,771 214,094 1,623 2,899 60,000 2,956 405 0	3,997 - 26,820 10,000 203,052 750 152,983 3,333,032 350,477 1,000 - - 275,612 955,056 141,711 78,613 394,772 50,000 18,500 38,173 50,676 76,371 300,000 291,910 - 36,915 295,771 214,094 1,623 2,899 60,000 2,956 405 20,000	0 452 882 1,000 6,000 75 2,550 109,639 436 100 1 3,600 26,404 2,900 7,249 6,581 34,308 7,299 1,225 2,310 2,947 1,275 2,500 6,029 1,000 0 15,000 1 50 1 4,000 105 100 0	0.00 9.05 30.22 100.00 20.00 75.00 51.00 7.98 28.88 100.00 100.00 100.00 72.44 100.00 100.00 78.59 94.41 60.83 49.00 100.00 100.00 51.00 100.00 100.00 100.00 11.27 100.00 100.00 100.00 100.00 100.00 70.00 100.00 -	0 9,885 16,568 16,576 275,656 730 335,224 2,257,417 169,885 (1,613) 109,985 112,634 639,809 (32,918) 61,003 63,156 105,848 69,820 (6,157) 12,417 1,855 (6,409) (62,026) (21,806) 7,640 22,733 (154,426) (21,607) 267,627 27,769 38,554 11,907 701 -	286 452 882 1,000 6,000 75 2,550 109,639 436 100 1 3,600 32,000 42,694 7,249 6,581 34,308 5,000 1,989 2,310 2,947 2,071 30,000 6,029 1,000 570 15,000 1 50 1 4,000 105 100 2,500	1.81 9.05 30.22 100.00 20.00 75.00 51.00 7.98 32.01 100.00 100.00 100.00 87.79 100.00 100.00 86.59 94.41 100.00 49.00 100.00 100.00 51.00 100.00 100.00 100.00 15.54 100.00 100.00 100.00 100.00 100.00 70.00 100.00 100.00	26,851 32,327 9,019 9,841 320,613 58 143,530 1,846,032 (24,570) (1,620) 8,864 340 337,191 (23,969) 4,428 (11,515) (48,685) (33,482) (12,508) 194 (3,228) (12,508) (14,807) (16,637) (2,360) 28,407 10,317 6,576 20,153 1,663 (2,478) (4,230) 2 38,132	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Associate Associate Associate Parent/Subsidiary Associate Parent/Subsidiary Parent/Subsidiary Fellow subsidiaries Associate Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Fellow subsidiaries Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary Parent/Subsidiary

～ 112 ～

Investor	Investee	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balances as of December 31, 2021	Balances as of December 31, 2021	Balances as of December 31, 2021	Maximum ownership during 2021	Maximum ownership during 2021	Net Income (Loss) of the Investee	Share of profits/ losses of investee	Note
				December 31, 2021	December 31, 2020	Shares (in thousands)	Percentage of Ownership	Carrying Value	Shares (in thousands)	Percentage of Ownership
AOI AOI AOTH AOGS	MPL AMTC GCL AOAU	Australia Taiwan Hong Kong Australia	Sale of computer, apparatus system, and peripheral equipment Manufacturing and sale of touch display, touch controller and its driver Sale of computer, apparatus system, and peripheral equipment Sale of computer, apparatus system, and peripheral equipment	- 376,238 2,675 3	22,887 376,238 2,675 3	- 6,664 300 1	- 17.28 100.00 100.00	- 317,106 3,511 16,446	39 6,664 300 1	27.21 20.07 100.00 100.00	(57,752) 204,514 1 (2,718)	Note 1 Note 1 Note 1 Note 1	Associate Associate Parent/Subsidiary Parent/Subsidiary

Note 1: The share of profits or losses of the investee company is not disclosed herein as such amount is already included in the share of profits or losses of the investor company.

～ 113 ～

Acer Incorporated and Subsidiaries Information on Investments in Mainland China For the year ended December 31, 2021

Table 9

Table 9	Table 9	Table 9	Table 9	Table 9
										(Amounts in Thousands of New Taiwan Dollars)
Investee Company Name	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows		Accumulated Outflow of Investment from Taiwan as of December 31, 2021	Net Income (Losses) of Investee	% of Ownership of Direct or Indirect Investment	Maximum ownership during 2021		Share of profits/ losses of investee	Carrying Value as of December 31, 2021	Accumulated Inward Remittance of Earnings as of December 31, 2021
					Outflow	Inflow				Shares	Percentage of Ownership
Acer Third Wave Software (Beijing) Co. Ltd. Acer Information (Zhong Shan) Co., Ltd. Acer Computer (Shanghai) Ltd. Acer (Chongqing) Ltd. Acer Cloud Technology (Chongqing) Ltd. Innovation and Commercialization Accelerator Inc. Xplova (Shanghai) Ltd. Consumer Insights Research (Chongqing) Inc. Acer China Venture Corp Acer China Venture Partnership (Limited Partnership) Sertec (Beijing) Ltd. Beijing Altos Computing Ltd. Shanghai AST Technology Service Ltd. GadgeTek (Shanghai) Limited AOPEN International (ShangHai) Co., Ltd AOPEN Information Products (Zhongshan) Inc. Protrade Shanghai Trading Co., Ltd.	Sale of commercial and cloud application software and technical service Sale of brand-name IT products Sale of brand-name IT products Sale of brand-name IT products Design, development, sale, and advisory of computer software and hardware Development, design, manufacturing, sale, and maintenance of intelligent terminal devices Sale of smart bicycle speedometer and operating social platform for bicycle riding and sports Collection, analysis and research of data information Fund company management Investment fund Repair and maintenance of IT products High performance computing, cloud computing, software-defined storage, and IT solution System integration service Sale of peripheral 3C products Sale of computer, apparatus system, and peripheral equipment Manufacture and sale of computer parts and components Trade and distribution of synthetic and natural rubber, plastic resins and related fillers	83,070 41,535 55,380 4,153,500 138,450 26,139 8,324 13,069 21,782 65,347 4,356 19,168 19,973 13,845 161,322 450,261 17,999	1 2 2 2 1 1 1 1 1 1 1 1 1 1 2 2 2	83,070 - 55,380 4,264,260 (Note 2) 138,450 (Note 3) 8,324 (Note 3) 21,782 60,990 (Note 4) 4,356 19,168 19,973 13,845 161,322 450,261 -	- - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -	83,070 - 55,380 4,264,260 138,450 - 8,324 - 21,782 60,990 4,356 19,168 19,973 13,845 161,322 450,261 -	3,283 2,819 15,766 112,908 (2,887) (10,084) (378) 5,616 (1,681) (18) 5 10,148 3,711 13,644 (172) 13,245 36,288	100.00 100.00 100.00 100.00 100.00 30.00 100.00 30.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	- - - - - - - - - - - - - - - - -	100.00 100.00 100.00 100.00 100.00 30.00 100.00 30.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	3,283 2,819 15,766 112,908 (2,887) (3,025) (378) 1,685 (1,681) (18) 5 10,148 3,711 13,644 (172) 13,245 12,868	(866) 213,726 1,210,825 4,446,417 30,927 7,357 5,324 8,496 2,593 9,270 8,901 93,292 25,708 34,569 15,333 249,166 128,892	- - - - - - - - - - - - - - - - -

Note 1: Method of Investment:

Type 1: Direct investment in Mainland China.

Type 2: Indirect investment in Mainland China through a holding company established in other countries.

Note 2: Acer Intellectual (Chongqing) Limited had merged with Acer (Chongqing) Ltd. in 2014, and Acer (Chongqing) Ltd. was the surviving entity from the merger. This amount included the original investment in Acer Intellectual (Chongqing) Limited of $110,760 (US$ 4,000 thousand).

Note 3: Innovation and Commercialization Accelerator Inc. and Consumer Insights Research (Chongqing) Inc. were reinvested by Acer Cloud Technology(Chongqing) Ltd.

Note 4: Acer China Venture Partnership was invested by the Company and Acer China Venture Corp of $60,533 and $4,324, respectively.

～ 114 ～

Investor Company Name	Accumulated Investment in Mainland China as of December 31, 2021 (Note 5)(Note 6)	Investment Amounts Authorized by Investment Commission, MOEA (Note 5)(Note 6)	Upper Limit on Investment Authorized by Investment
The Company and Subsidiaries	$5,242,655 (US$189,333,880)	$6,694,580 (US$241,768,884.5)	(Note)

Note 5: In September, 2008, AOI had disposed all shares of JNS Technology Co., Ltd., and the proceeds from the disposal of US$ 730,000 had been remitted to AOI in March 2010. AOI has not yet to report to MOEA, therefore, the amout of US$ 1,645,200 was still included the original investment in JNS Technology Co., Ltd.

Note 6: T-Conn Precision(Zhongshan) Co., Ltd., indirectly invested by AOI, had been dissolved and the related liquidation process has been completed. The liquidation proceeds of US$ 31,549.06 (according to ownership percentage of 19%) has been remitted to Super Elite Ltd., a holding company established in other countries. On March 12, 2010, AOI has obtained MOEA's approval to withdraw its investment. However, the amount of accumulated investment in Mainland China still included the amount of US$ 57,000 due to the liquidation of capital which has yet to be remitted to Taiwan.

The above amounts were translated into New Taiwan dollars at the exchange rate of US$1=NT$27.69 as of December 31, 2021.

Note: Since the Company has obtained the Certificate of Headquarter Operation, there is no upper limitation on investment in Mainland China.

～ 115 ～